Other then your rent or mortgage one of the highest costs of your monthly bills is your car insurance. Unfortunately there is no way around having car insurance and it is to your benefit to have it. Any time that you are in an accident no matter how small you risk potential lawsuits. Most of the time your insurance will cover all of the costs but if you are one of those people that drop your insurance between inspections and hopes nothing will happen you may find yourself with huge debts.
Even if you are lucky enough to not get in an accident you may find your car gets confiscated for a simple traffic stop or maybe even a parking violation. The cost to get it back along with any fines will most likely be higher then 6 months of payments and not having a car means you can’t get to work.
So, what are some of the things that you can do to save money on your car insurance?
1) One of the most important things is to have a good driving record. There are even incentives by some companies to reduce your premium if you are a good driver.
2) Combine Multiple policies with the same company will also reduce your costs. If your car insurance company offers home owners or even renters insurance then move them all to the same company and you are likely to save quite a bit.
3) If one spouse has a better driving record then make them the primary on your main vehicle and then add drivers as secondaries. This may save you some money. Also the vehicle with the highest value should be in the name of the family member with the best driving record.
4) Keep your kids off your policies.. this is also good for any other family member. Younger drivers will always have a higher premium and some parents believe that placing them on their policy to save a few dollars is a way to save but if they happen to get into an accident then you put the car that gets mom or dad to work at risk. I was never on my parents policy and it paid off because eventually my premiums dropped and actually ended up less then what my parents paid.
5) Park or sell any secondary vehicles that you keep around. If you collect classic vehicles or have a second car that you only use for vacations or off road or other special reasons then park it on your property so it won’t get ticketed and drop the coverage. Some companies may offer suspension of a policy or just cancel it outright. If there is damage to the car while it is on your property then your home owners coverage should cover any problem. If you have a motorcycle that you only use in the summer then drop the coverage for 6 months and work with your agent to get part year coverage.
6) Take a class in driving safety. Most high schools offer these classes but you can attend one for free at most senior centers or local community centers. Make sure they are certified and you will get a reduction in your premiums.
7) Sell your high dollar car that you haven’t paid off. If you are paying off a car but can sell it and get a reasonable replacement you will save your car payment and you will most likely reduce your premium. Lower value but safe vehicles always have a lower insurance premium. You might want to talk with your agent about any vehicles they can suggest but often they won’t reveal which cars have lower premiums. What you want to look for is passive safety belts and air bags .. or any other item that your agent can list as a deduction.. ask them what items can be used to deduct premium costs.
8) Pay your premium long term instead of monthly. Yes this is difficult for the first few payments but if you are good at saving money for future costs you will save maybe $100 just by switching to 6 month payments instead of monthly payments.
9) Pay for your premium with your cash back credit card.. this is like getting an instant 5% back for doing nothing and you have the benefit that if your card is registered with your agent you will never miss a payment.