5 Tips and Ideas for Cutting Car Insurance Costs

car insurance

Auto insurance rates are going up, along with the astronomically rising gas prices. Driving a car will soon be more expensive than buying one, and it’s not even a stretch. It is illegal to drive a car without proper liability coverage with the state’s minimum coverage limit. A liability insurance policy is what’s mandatory, while Collison, comprehensive, and other auto insurance policies are necessary. Getting in a car accident is already terrible enough. You don’t want to get in a financial accident as well!

But unlike the hope of getting cheaper gas prices, the hope of saving money on auto insurance is not dead. There are some tips and ideas that you can use to cut down car insurance costs and save a lot of money. These tips are simple to practice and will save you hundreds of dollars. Here are 5 tips and ideas for cutting car insurance costs that will insure your car efficiently.

Shop Around, Avoid Word-of-Mouth

One of the biggest and most common reasons why many people are stuck paying a lot of money for auto insurance is word-of-mouth. Just because your friends or family got their car insurance policy from a company does not mean it is the best for you as well. Since auto insurance rates greatly depend on an individual’s driving experience, past insurance claims, traffic violations, and much more, you need to find an insurance company that has the best insurance policy for you. 

So compare different auto insurance companies and look for the cheapest car insurance providers in your state that offers the best prices and best coverage at the same time. It might take some time and effort but it will be worth it when you save hundreds of dollars every year. Consider everyone’s suggestions, but do your research and compare different insurance companies and policies. 

Consider Pay-Per-Mile Auto Insurance

Here’s the best way of saving a ton of money on auto insurance; pay only for as much as you drive your car, nothing more. Pay-per-mile auto insurance policies are great for people who do not drive too often. General auto insurance will charge you a fixed amount based on multiple factors, but your mileage is not one of them. But why pay the same price as everyone else if your mileage is only a fraction of what others are putting on their odometer? 

It is recommended that if you drive your car less than 8,000 miles a year, then getting a pay-per-mile auto insurance policy will be beneficial for you. It will save you a lot of money. In some cases, you might save 45% of what you are paying for general car insurance. The best thing is there is no sacrifice in the coverage. You get all the necessary coverage at almost half the cost. 

The only issue here is that your mileage must be very low to save money on pay-per-mile auto insurance. If you work from home, or you are self-employed, or maybe you just want to insure a secondary car, then this insurance policy is perfect.

Tip: Before you opt for pay-per-mile auto insurance, take a look at your current month’s mileage and use it to see how many miles you’ll drive this year (estimate), then get a quote from the insurance company and check what’s your per-mile rate. Multiply your estimated mileage with the estimated rate and you’ll get your early auto insurance expenditure. If it is more than general auto insurance rates, then skip pay-per-mile insurance. 

Increase Your Deductibles

The fastest and most effective way of saving money on auto insurance premiums is by increasing your deductibles. Deductibles are the amount that you need to pay first before your insurance company pays the rest. It is usually a percentage of the coverage limit. 

If the cost of repairs or medical treatments is lower than your deductible, then the insurance company won’t pay a penny. If the cost is more than your deductible, the insurance company will pay the amount minus the deductible. 

Here’s the meat of the matter. Higher deductibles mean in case of an accident, you’ll have to pay more from your pockets. But higher deductibles also reduce the premium rates. So as long as you do not get in an accident, you can save a lot of money by paying lower premium rates. Choose wisely when increasing your deductible and always consider the risk of paying that amount if you get in an accident. 

Cut Down Some Policies

Liability coverage is mandatory in almost every state. So if you live in these states, you will have to get the policy. 12 states are called “no-fault” states where getting a personal injury protection policy is also mandatory. But we recommend getting a PIP plan even if you do not reside in these ‘no-fault’ states. 

However, there are some auto insurance policies that you can skip and save money on auto insurance rates. Collision and comprehensive car insurance are exclusively for your car’s repair costs. But if your car is over the age of ten years, then paying hefty coverage rates is not worth it. 

You are better off fixing the car yourself than paying high premium rates. So if you think your car is old enough to skip collision and comprehensive insurance plans, then skip them and save money. 

Keep a Good Driving Record

No matter which auto insurance company you choose, or what type of auto insurance policy you get, a bad driving record will always inflate insurance rates. So the best way to save money and pay less for auto insurance policies is by maintaining a clean driving record. Avoid the teen rebellion that might come out from time to time while you resist the urge to the pedal to the metal. Even a small speeding ticket can increase your insurance rates, and these changes are permanent. What could be better than driving safely and saving money at the same time?