5 Tactics for Saving Money on Car Insurance

Buying a car is one of the most meaningful expenditures we can make. Customers often get swept along in all the excitement that comes with this, and forget about the additional expenses that come along with it. Getting worthwhile insurance on your car is a ticket to a more enjoyable experience with your ride, here are some pointers on how you can save money on it.

Know What You Are Looking For!

Before looking for tactics to save on car or bike insurance, you should first know what you are actually buying. Car insurance is an umbrella term that includes many different types of insurance products that customers can choose from. Knowing which product suits you in particular is essential to sealing the deal on cost-effective insurance. Here are some of the big ones.

• Liability coverage: Most places have a set minimum for liability coverage. This insurance helps pay for charges in the event of an accident where it is determined that the fault is yours. Liability coverage has two components, property damage, and medical costs. Property damage will go towards any buildings or other objects damaged in the accident while medical coverage pays for any injuries sustained.
• Comprehensive coverage: Comprehensive coverage goes far beyond potential accidents and includes incidentals such as weather damage and theft. Since it covers many more scenarios, comprehensive coverage is more expensive than most other car insurance products and may not always be necessary.
  It is up to you to gauge whether or not you will benefit or need this in the long run. Generally, people driving older, expendable cars tend to forego comprehensive coverage as the premiums might not be worth the value of the car.
• Collision coverage: This coverage insures your vehicle in the event of a collision with another car, no matter who the fault lies with. This insurance helps pay for the repairs or even the value of the car if it is completely destroyed. People living in zones where rash driving is common or owners of high-value cars should opt for collision coverage.

Additionally, coverage for a third party as a result of a road accident is also available. Third parties include road users, passengers, and pedestrians. Compulsory third party or CTP insurance can protect a driver from the financial impact associated with the injury or death of a victim due to a vehicle accident. Check out CTP Green Slip for more information.

#1: Reading Up

Car insurance is a widely sold product, and being well informed about the options available to you in your area is the first step to saving money. Premiums, perks, and financing options all vary across insurance companies, and some even specialize in certain niches. Buying insurance is more than picking the cheapest option, and many times the cheapest option might not be the right choice.

There’s a few ways to go about researching insurance.

• Direct contact: Striking up conversation with insurance agents from different companies is the traditional way of getting to know a company and their quality of service. Sometimes, directly contacting agents can help you save a little extra depending on how eager they are to onboard you. That said, this isn’t exactly a consistent result that you can count on, and it tends to be more effective in highly competitive areas.
• Diversify your options: Strategically picking from different types of insurance providers can be a faster way of discovering the range of options open to you. For example, you might consider getting a quote from a traditional agency that employs agents, and another from a new-age company that handles customers directly through an app or website.
• Buy smart: A free way to save money on car insurance is to know your own needs and buy insurance that suits you. A good example of this is mileage-based insurance. These programs work on the idea that risk is proportional to the time spent driving. Students and other people who only need to drive once in a while can save big by opting for mileage-based insurance.

Naturally, it goes without saying that you’ll want to be well-read on the basics of car insurance policies before you contact any agents or companies for inquiries. Less reputable companies tend to negotiate aggressively, and staying informed is the only way to avoid overpaying on car insurance.

#2: Raising Your Deductibles

Deductibles are a staple in any insurance contract. They determine the amount you’ll be liable to pay in the event that your insurance does happen to pay off. If you and your car end up running into trouble, this is the amount that you’ll be contributing to the insurance company. Let’s say you’re insured for $20,000 and you’ve agreed to a $5,000 deductible in your policy. If your car ends up getting damaged, you would receive a final payment of $15,000.

For home loans, deductibles are usually a percentage, while relatively less expensive products like car insurance can be a flat fee. This might vary according to your particular provider, so make sure you check with them first.

The bottom line is that deductibles help you save money by lowering the premium you pay for insurance. This amount varies and you should only spring for higher deductibles if you know you will have that amount of money ready at any given moment if the worst happens.

#3: Safety

The amount you pay for car insurance is directly related to how seriously you take safety. One of the things insurers look for when pricing premiums is how safe your vehicle is. This value is determined by ratings awarded through a professional review process. A prudent practice is to look at insurance prices for different types of cars before you’ve even bought one. If insurance costs are a concern, it’s a good idea to compare ratings.

Your driving record is looked at extensively at the time of determining your premium. Being a conscientious driver both before and after getting car insurance pays off in the form of much smaller payments. Generally, insurance companies will examine around three years of your past driving record. If you’ve had any past driving infractions, it might end up coming back to cost you.

Contextual information also affects your premium. This can refer to:

• Your location: The area you live in can be an indication of how vulnerable your car might be to theft or accidents. If you’re planning on shifting to a new city with lower theft and accident rates in the near future for work, it could be a good idea to hold off on buying that car until after the move.
• Mileage: Your yearly mileage can guage how prone you are to accidents by looking at how often you are on the road.
• Marital Status and Gender: These may also influence your insurance rates, as certain individuals are associated with a demographic involved in less accidents.
• Credit Score: Not many people realize that credit score can be relevant in many other circles than just banking. Insurance companies can use your credit score as a barometer for how safe of an investment you might be. Keeping healthy financial habits early on is a great way to reap the benefits in the form of lower premiums down the line.It should, however, be pointed out that credit scores are not a universal sign of trustworthiness. Certain governments have outlawed their use by insurance companies to gauge premiums.

This advice applies after you’ve gotten insurance as well. Getting into accidents where you end up being determined as being the one at fault can lead to hikes in your rates. Certain companies will, however, reward customers by offering accident forgiveness and foregoing rate hikes in certain scenarios. This can also be a factor worth looking into if you haven’t decided on an insurer yet. Driving safely benefits your bottom line with a No Claims Bonus at the time of policy renewal, lowering your premiums.

#4: Be Proactive

Just keeping an eye out for new offers and carefully reading what your insurance provider has to offer can be a surprisingly effective way to save money on insurance.

• Discounts: As a way of rewarding customer loyalty and building a long-term relationship, car insurance companies can offer personal milestone-based discounts. A popular example of this is the age-based discount. Customers who turn 25 are offered discounts as an incentive to extend their stay with the company.Similarly, discounts are also offered for married couples and even for people who complete certain educational milestones. This can scale from bachelors all the way up to a doctorate.The global size of the insurance market in 2020 was 8tr USD. More and more people are realizing the value of insurance and some end up getting it from different places in a hurry, losing money in the long term. If you’re looking to get auto insurance on more than just your car, you could save more by getting all or most of your insurance from the same provider. Certain insurers will provide successive discounts for people who insure multiple products.
• Optional Insurance: Car insurance isn’t one homogeneous product, but rather comprises many smaller offerings, some of which are optional. One aspect of this is emergency assistance, or roadside insurance coverage. While this is certainly good to have when stuck in a tight spot, some people are already insured through other companies. If you’re already insured, or just don’t think you’ll be needing this one, you can save on insurance by foregoing it.

Another example is auto rental insurance. This is a comprehensive package that insures you in the event that you travel elsewhere and rent a car. If you’re looking to save, you can opt to not get rental insurance and just rely on public transport for a few days. This does of course depend on where exactly you’ll be traveling to and the transport network there.

Additionally, if you’ve got an older car that is already insured and are looking to insure a newer car, you could save money indirectly. As cars get older, their value depreciates, and in certain cases where the car is too old, the premium you pay might not even be worth the payout. It’s always a good idea to keep track of old insurance policies and look for possible optimizations.

#5: Vehicle Modifications

Making changes to your car can affect your insurance premiums both negatively and positively. In certain areas, installing vehicle mods to boost your car’s speed and aesthetics can make the insurance more expensive.

This is primarily for two reasons. The first is that the overall value of your car increases if you decide to modify it, which naturally means you’ll have to pay more for insurance. The second reason is that the perceived risk profile of your car increases if you’re altering it in order to make it faster. Installing add-ons on your bike or car makes it more likely to enter into accidents on the go and can even double what you pay in premiums. This risk profile also includes an extra likelihood of theft, as your vehicle will be a more attractive target for thieves.

The other side of this coin is the installation of security products. Adding anti-theft protection devices to your car can be a great way to lower premiums and is generally a great idea for long-term protection. The reason for this is that anti-theft products assure insurance companies that they are making a safe investment. You should also make sure you are ticking all the usual safety boxes as well, including essential protections such as air-bags.

Maintain a Clean Driving Record:

With how risky driving can be in some parts, car insurance is always worth it if you have the capital. It can be surprising how significantly higher the savings can be if you are well-informed about the insurance market and your own needs. Maintaining a great financial track record and a clean driving history are the keys to a long, healthy, and insured life.

Follow traffic laws diligently by adhering to speed limits, traffic signals, and road signs, while avoiding aggressive driving behaviors like tailgating and road rage. Stay focused by avoiding texting or adjusting devices while driving, ensuring all passengers and pets are properly secured. Obey parking regulations, park only in designated areas, and use seatbelts consistently.

Keep your vehicle well-maintained with regular checks on brakes, tires, lights, and other essential systems, addressing any mechanical issues promptly. Never drive when you have taken alcohol, drugs, or impairing substances. Consider attending defensive driving courses to enhance skills and potentially qualify for insurance discounts. Adjust driving behavior based on weather conditions, increasing caution during adverse weather.

Know and comply with any license restrictions and promptly address traffic tickets by paying fines or attending required courses. Periodically check your driving record for accuracy and drive defensively by anticipating others’ actions, maintaining a safe following distance, and staying aware of your surroundings.