The cost of auto insurance has increased so dramatically over the past 10 years that it’s become one of most families’ biggest expenditures. I’ve tried mightily and have been able to get the cost of insuring our two cars down to about $200 a month but that’s still a lot of money.
How did I do it?
First, the cost of auto insurance begins with the car you buy. If you buy one that has a very good safety rating, you will pay less for your insurance right from the get-go. This is because insurance companies are no fools. They know that the safer the car, the less they will probably have to pay if you’re involved in a collision.
Increase your deductibles?
Second, check to see if you could increase your deductibles. For example, if your collision deductible is $500, think about increasing it to $1,000. I know that’s something of a gamble because if you were to get in an accident where there was more than $1,000 damage to your car, it could be difficult to come up with that $1,000. However, if you can drive accident free for several years, you should save enough to pay that $1,000 deductible.
Do you also have homeowners insurance? If so, be sure to buy your auto insurance from the same company as almost all insurance companies offer a discount for this. And, of course, if you have several cars, you should insure all of them with the same company–for the same reason.
How insurance companies rate you
Did you know that when auto insurance companies “rate” you or decide how good a risk you are, they will check your credit record and credit score. They’ve found out from experience that the higher the credit score you have, the better a risk you are. Don’t ask me why this is true because I don’t know. It just is.
If you have an old car, you might consider not buying any collision insurance at all. Let’s say you have a car that’s worth only $2000. How much should you spend to have collision insurance with a $1,000 deductible when you could replace the entire car for $2,000?
Get all the discounts you can
Be sure to ask your insurance agent about all of the discounts the company offers. You might be able to get a low mileage discount if you drive, say, less than 10,000 miles a year. You could also get a discount if you don’t drive to work or if you carpool.
Does your company offer some kind of group auto insurance plan? That could save you big dollars. Be sure to ask your employer if there is such a plan available. If you belong to a professional trade organization, be sure to check with the national offices to see if it does offer a group auto insurance plan.
Finally, make sure you’re not paying for duplicate health insurance. In some states, if you have regular health insurance, you can eliminate the medical insurance portion of your auto insurance and lower your PIP (personal injury protection) by as much as 40 percent.