In these tough economic times, it may be tempting to cancel your auto insurance policy and hope that you can maintain an accident free existence, or are only involved in accidents where the other driver is both at-fault and has a significant amount of uninsured motorist coverage. Unless you plan to trade your car keys for a bus pass, however, driving without insurance is both illegal and unwise. Instead, try these easy ways to reduce what you spend on auto insurance.
- Bundle your coverage: If you own a home or condo, or even live in an apartment, you can save money on your auto insurance by purchasing it from the same company that handles your homeowners or renters coverage. Usually, you’ll get a minor discount on both policies, but sometimes it will only be on one. If you also purchase life insurance from the same company, that discount will increase. Most of the mainstream insurers offer all three products, though some don’t, so be sure to check with your agent.
- Buy only what you need: If your vehicle is leased or new enough that you haven’t paid off the loan, your finance company probably requires that you keep it fully insured with both comprehensive and collision coverage as well as whatever liability and un/underinsured motorist coverage is required by your state, but if you’re driving an older car, you can probably cancel the comprehensive coverage without much risk. Doing so means that keeping your car locked in the garage at night becomes a bit more important, but it will save you a significant amount of money.
- Ask about discounts: Most people know about discounts for low mileage or having a clean driving record, but there are a number of other discounts available. Are you over 65 years old? Ask about a “mature driver” price break. Have you been with the same company for several years? Ask about a loyalty discount. Are you a member of an automobile club for aficionados of your make or model, or a member of a trade union? There are often discounts available for both of these things.
- Pick the right car. If you haven’t actually purchased a car yet, or are about to replace one, avoid the cute ragtop sports car and go for the sensible sedan instead. Not only will you get far better gas mileage, but you’ll also save money on your auto insurance, because when it comes to the cost of coverage, the color of your car doesn’t matter, but then engine size does. You may be able to maximize your savings by picking a hybrid or electric car, but don’t count on this because even though there are some amazing “green car” incentives, the repair bill on such vehicles is significantly higher than on standard gas-only or diesel-powered cars and trucks.
- Go digital: One more easy way to save money on your auto insurance is to go digital. Most insurance companies give you a small discount for accepting statements via email, instead of via the post office, and they’ll usually increase that discount if you agree to pay your premiums electronically, as well. EFT (electronic funds transfer) helps you, because you’ll never make a late insurance premium, and helps them, because they don’t have to pay someone to open your mailed statement, and manually process your payment.
The five methods of cutting your car insurance bill listed above are just a few of the easy things you can do to save money on auto insurance. The most important thing to remember is that it never costs anything to call your existing insurance company at renewal time and ask, “What else can I do to save money?”