There’s a lot of wiggle room in between having enough coverage in case of an accident and not paying extra for coverage you may not need. These tips will help you save money on auto insurance, whether you are buying or leasing, new or used.
Here are 10 ways to save on auto insurance:
Drive safe. Choose a vehicle with as many high-tech safety features as you can afford. Systems such as rearview camera and lane departure warning can pay for themselves in insurance premium discounts, because they help avoid accidents. A vehicle with a top safety rating by the Insurance Institute for Highway Safety (IIHS) or Consumer Reports will cost less to insure than a lower-rated vehicle, such as the 2014 model award-winners I wrote about on ecoXplorer.
Never let your insurance lapse. It doesn’t matter whether the lapse is because you are getting a new vehicle, moving to a different state where insurance coverage requirements may be different, or changing insurance companies, once your policy expires, you will be considered a higher risk and your new policy will cost more. Consider bridging your old and new coverage, even if it means paying for both policies for a few days. Pardon the pun, but consider it insurance against higher premiums.
Review your policy annually. You might need more liability coverage to include a new teen driver, or less theft or damage coverage as your vehicle gets older and less valuable. My son saves hundreds of dollars a year by not paying for theft or damage on his beloved Old Breakdown (my name for it).
Don’t insure vehicles you don’t drive. If it’s stored somewhere waiting to be repaired, traded in or given to a favorite niece, you are wasting money paying for insurance. However, be sure to keep registration active and up to date. That will save time at the DMV when the vehicle is back on the road, and time is money, after all.
Ask for a discount. Insurance companies like Geico advertise that you’ll get a lower rate if you haven’t filed a claim in a certain period of time. There also are special deals for teachers, law enforcement officials, seniors, and others that vary by company, so ask. You can also ask for a renewal discount if you are a loyal customer who has been with the same company for several years, especially if you have made no claim.
Increase your deductibles. A $1,000 deductible could save several hundred dollars a year in policy costs over a $250 deductible. That makes the real price of an accident you must pay for out-of-pocket the difference between the two policy costs.
Beware of “the bubble.” Consider not filing a claim if damage is just a few dollars more than your deductible. AAA insurance services manager Chris Wukovits warns that you could be dropped by the insurance company, especially if you had another recent claim on the policy. Too many claims and your insurance bubble will burst.
Take a driver training class. Most insurance companies offer discounts for approved driver-training courses, such as those offered by the AAA, and may even require one for a new teen driver. It’s a good idea even without a premium discount. I’m a great believer in an occasional refresher lesson from a pro, who can show you accident avoidance techniques you didn’t know that you didn’t know.
Bundle policies. It can be cheaper to combine your homeowner and vehicle policies. And, it can be cheaper to include young adult children under your policy, and have them repay you their portion. It certainly will be cheaper for them than insuring themselves.
The bottom line. Always get at least three quotes for exactly the same coverage. And always drive safely, since moving violations such as a speeding ticket can increase the cost of your insurance premiums more than the cost of the ticket itself.