Finding affordable car insurance is part of the car buying process, but are you sure you’re taking advantage of all the discounts you qualify for? Here are a few methods to lower your cost of insurance and get the most bang for your buck.
Bundle your insurance policies.
Combining multiple auto insurance policies, or purchasing home and auto insurance from the same insurer, could save you 5-25% on each policy and simplify payment each month. You may also be able to bundle other forms of insurance for steeper discounts. Be sure to stay vigilant though—some insurance companies may raise your rates over time knowing that because you’ve bundled your policies, it’s less likely you’ll leave to find a new insurer.
When was the last time you checked to make sure you’re receiving the lowest possible rate on your auto insurance? There are several insurance comparison sites that make comparison shopping easy for you to find a policy that saves money. Or you can do the leg-work yourself and request free quotes from insurers that you’re interested in. (Generations Insurance Services is a good place to start!)
Maintain good credit.
An unexpected risk factor many insurers take into consideration is your credit score, which studies have shown have a correlation with how much a consumer may cost an insurance company. Different insurers give different weight to the credit score, but an overall good score will help keep your rate low.If you would like professional guidance to learn about your credit report and score, our non-profit partners at GreenPath can help at no charge. Some tips for building a good score include:
- keeping credit utilization to less than 30% of your credit limit
- Paying all accounts on time
- Limiting the number of new accounts you open
- Maintaining an overall low debt-to-income ratio.
Lower coverage on older vehicles.
Vehicles depreciate in value quickly. If your vehicle has been on the road for years, chances are its value has gone down significantly. This may mean you’re paying more for insurance than your vehicle is worth. By dropping Collision or Comprehensive Insurance on older vehicles, you could save money to the tune of hundreds, or possibly thousands, of dollars.
Ask for higher deductibles.
Deductibles are typically associated with Collision Coverage and Comprehensive Coverage. They represent the amount of money you would need to pay out-of-pocket before insurance covers expenses on a claim. Your monthly payment may come down if you request a higher deductible from your insurer. However, take caution! Should you file a claim after raising your deductible, you will be on the hook to pay more out-of-pocket before insurance kicks in.
For students, maintain good grades.
Young drivers often have the highest auto insurance rates due to their extra risk factors. But having good grades can help counter this. Insurers often provide discounts to students who can provide proof of a 3.0 grade point average (letter grade B) or higher, or to those who make the honor roll or dean’s list. Asking your insurer for this type of discount could save money by cutting your monthly payments significantly.
Ask for other discounts your insurer offers.
You don’t know what you’re missing out on until you ask. Some insurers will offer discounts for low mileage on your vehicle, taking a defensive driving course, remaining accident-free for a number of years, installing anti-theft devices in your vehicle, and more. It never hurts to ask, and a 10-minute call to your auto insurer could save you money.
Finding affordable car insurance doesn’t have to be difficult. You can start your search by getting a free quote from the Generations Insurance Services. And if you’re hunting for a good rate on your next vehicle, why not get pre-approved for a competitive auto rate while you’re at it? Happy driving!
Samantha Salazar is a University of Texas at Austin alum who has worked in the finance and marketing industry since 2011. She has a background as a CUNA Certified Credit Union Financial Counselor and is a Class II graduate of the Latina Leadership Institute (LLI). True to her millennial nature, Samantha loves coffee, covers her home in hanging plants, lives a frugal lifestyle, and works hard so that her dog, Olive, can have the backyard she deserves.