Lowering Your Car Insurance Rates: Part II
6. Be responsible in two ways
Two big things the insurance companies want to see are good credit and an unbroken record of coverage over the last few years. If you fell behind on payments and had your insurance cancelled for a month, that may disqualify you from a number of better priced plans. The same goes for your credit rating. When Insurance companies set your rates, they’re trying to figure out how responsible you are. Being responsible in other areas of your life translates to being responsible behind the wheel, and that can mean hundreds of dollars a year in savings.
7. Pay Up Front, Not Monthly
When you pay monthly, the insurance companies tack a little service fee to each payment. That may only add up to $40 or $50 a year, but wouldn’t you rather have that money in your pocket? Also, if you pay each 6-month bill as it comes in, there’s less chance for you to forget or get distracted and miss a payment. Remember that missing a payment and getting cancelled, even if it’s for a short time, can result in your rates shooting up.
8. Insure more than one thing with the same company
Some insurers will give you a discount if you insure more than one car with them or if you buy more than one type of insurance from them. Buying both your car insurance and homeowner’s insurance or renter’s insurance from the same company can save you money on the “multi-line” policy.
9. Shop your ticket or accident around
If you get a a ticket or get in an accident and your insurer jacks up your rates, don’t just sit there and take it… go shopping. Not every insurer treats tickets and accidents the same. You may find that you can cut that increase down by a big amount if you’re willing to do some shopping. And make sure to shop around every 6 months to 1 year after that. The farther the ticket or accident is in your past, the less it influences your rates, and the more likely you are to find some deals.
10. Be a car salesman when you get your quote
Many insurers offer discounts for features that make your car safer, like anti-lock brakes, traction control, stability control, side-curtain airbags, etc. So when you’re getting that quote, act like a car salesman and be sure to rattle off every impressive safety feature on the car. You never know if one of them might get a few bucks taken off.
11. Deduct more, pay less
If you lower the amount the insurance company will have to pay if you get in an accident, they’ll lower the amount you have to pay for insurance. On the other hand, if you get into an accident, you’re going to have a bigger bill to pay. Basically, if you raise your deductible to save money, you should put at least half of the savings in a rainy day fund, in case you do get into an accident.
A number of “lower your bills” articles bring this up without ever discussing the hidden gotcha… if you don’t own your car free and clear, you may be required to have minimum deductibles under the terms of your lease or car loan. That means if you raise your deductibles, you may get a nasty note from Guido’s Dependable Finance and Acupuncture, telling you to lower those deductibles back to where they were or they’ll consider you in default.