We have read it all so you don’t have to, going through hundreds of tips to pick the 10 which we think make the most sense. Yes, you should be driving safely, but is that really a money-saving tip for car insurance? We don’t think so either.
Anyway, here’s what we’ve got. And if you think something else should be on the list, make sure to mention that in the comments section below the article. Let’s roll…
10 Tips to Save Money on Car Insurance
1. Avoid letting your insurance coverage lapse
Most insurance companies will provide you with a discount even after being insured for just one year. And the rate keeps falling down for every consecutive year, though it tops at one point. This discount is also affected by the amount of liability coverage on your policy — the higher your limit of liability, the better your prior insurance discount will be.
2. Go paperless
Some providers could offer you a small discount for agreeing to “go paperless.” This means signing your policy documents electronically with no papers to deal with. We are taking this option even when there are no other benefits included.
3. Provide VIN to win!
VIN stands for Vehicle Identification Number and by giving it to an insurance company, you could qualify for a discount. VIN is used to identify cars, making it harder to resell them if they got stolen.
4. Pay upfront…
If you can, pay your insurance policy in full rather than through an installment plan. On average, this could save you $62 per year. In other words, you are better off saving money for car insurance and when the time comes — paying it in full.
5. Or make it automatic
If you can’t pay it all upfront, sign up for auto pay or electronic funds transfer (EFT) instead of receiving a bill. Many providers will offer you a discount for doing this. If they don’t offer you — ask for it. And if that doesn’t work, perhaps it’s time to switch boats.
6. Consider insurance bundles
A single insurance company could sell you insurance for both your car and home. On average, homeowners who buy car insurance save $110 per year, while renters doing the same thing could expect savings of about $72 per year.
7. Shop when you move
This is where a little research comes in handy. If you move to another state, you may want to shop for a new policy as insurance costs differ from one state to the other. For instance, car insurance in Michigan is three times more expensive than in Ohio. See if this leaves room for savings — perhaps you should get a new policy once you move. Or perhaps you should buy insurance before moving (if that’s an option).
8. Boost your credit
If you can increase your credit score, you can save on car insurance. It is estimated that drivers who increase their credit score by one tier save an average of 17% off their annual premium. (Related: Save Money on Interest Payments by Raising Your Credit Score: 7 Things to Know)
9. Older cars cost less
It is only obvious that car insurance is less expensive for older cars. For instance, a 5-year-old version of a certain model is nearly 13% less expensive to insure than its current model year version. While we advise you to buy used cars, we don’t say you should do it only for the sake of saving on insurance.
10. Consider usage-based insurance
This is a good option for those living close to work or work from their homes, and generally don’t drive that often. In order to take advantage of a usage-based insurance, you may have to add a telematics device in your vehicle and share your driving behavior with an insurance company. Yes, it is kinda freaky, but it could save you up to 30 percent. So it’s worth the effort.
Final word
Now that you know a few tricks, you may wonder where to start? There are many companies offering car insurance, and from all of them we go for Allstate. Having been in the business since 1931, they are not only reliable, but they also offer a somewhat unique deal — they will actually pay you $100 to drive safely.
That’s right — when you sign-up with Allstate, they will send you two $50 checks for every year you’re accident free (for a total of $100 per year). Furthermore, drivers will also be rewarded with a reduced deductible: $100 off the day they sign up with Allstate, and then an additional $100 off each year they continue driving safely — up to $500!
Plus, your rates won’t go up just because of an accident, and you’re protected even if you were at fault! Some limits do apply, but this is still much better than the insurance I currently have (and which I plan to change). So what are you waiting for?