Low Cost Auto Premiums: 5 Tips to Maintain Low Auto Insurance Premiums

low-cost automobile premiums There is nothing cheap about owning an automobile, yet just about everyone needs a car to go about their daily routine. Typical expenses associated with owning a car include the monthly payment, auto insurance, repairs, maintenance and registration. And if you manage your family’s finances, you may look for ways to lower your transportation costs. Fortunately, there are practical and simple ways to find affordable car insurance. Lowering your auto insurance premium can free up cash, allowing you to save each month.

Here are five tips to help you find low-cost auto insurance.

1. Be loyal

Loyalty goes a long way when shopping for auto insurance. Do you have another type of insurance policy? Perhaps health insurance, homeowners insurance for renters insurance. Contact your existing insurance provider to see if they offer auto insurance. If you apply for a policy with the company, the company may reward your loyalty with a discount on your auto insurance – as much as 15%.

2. Shop around before your policy expires

Do not simply renew your auto insurance policy. Comparison shopping can save as much as 15% on auto insurance. Insurance rates are not the same across the board, and some insurance companies offer exclusive discounts. For example, an insurance provider may discount your policy if you are a college student with a 3.0 or better grade point average. Additionally, there are discounts for low mileage drivers. If you’re a stay-at-home parent, work from home or use public transportation, your insurance provider may reduce your premium.

3. Skip the new car

Most people prefer a newer model automobile, however, purchasing a new vehicle will require liability and comprehensive auto insurance. Liability insurance offers protection if you damage another person’s automobile or personal property. Comprehensive insurance protects you from damages not caused by a collision. If your vehicle is older and valued under $3,000 or $4,000, you can remove comprehensive coverage from your auto insurance policy and only maintain liability insurance. This can lower your annual auto insurance premium by 35%.

4. Avoid tickets and DUIs

Speeding tickets remain on your driving record for two to three years. It only takes a couple of speeding tickets to increase your insurance premium. And if you’re caught driving under the influence, your insurance premium can double. Be smart, obey the rules of the road and always have a designated driver if you plan on drinking alcohol.

5. Maintain a good credit score

A good credit score not only helps when applying for a mortgage loan or an auto loan. Many insurance companies have started checking credit scores, and they reward good credit applicants with a lower insurance premium. People with good credit typically pay their bills on time.

There are several ways to avoid higher insurance premiums. If you’re living paycheck to paycheck, lowering your auto insurance can remove a burden from your shoulders. This frees up cash for other bills, and if you’re looking for ways to reduce your expenses and increase your personal savings, a lower premium can help you reach your goals.

Photo by: camerasutra

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Comments

  1. Great read. The best points are about avoiding a new car and maintaining a respectable credit score.

  2. Good list. I’m actually coming up for a renewal and forgot to shop around. Thanks for the reminder.

  3. Thanks for the list, you cover quite a bit that I hadn’t thought of. I didn’t know you could remove the comprehensive coverage if you had an old enough car. That can save so much money in the long run. Also, like Kevin, I always forget to look around before my policy is up. Keep up the good work!

  4. I’ve noticed the credit score factor is largely unknown among consumers. Most have no idea that insurance companies can and do use your credit score to help determine your premiums. It’s just another way in which less-than-perfect credit costs you.

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