Need to Save Some Money? Take a Look at Your Auto Insurance!

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The following is a guest post. Enjoy! 

Many people today are struggling financially; therefore, you might desperately need to find ways to save money. One way that you can save is through your car insurance.

Car insurance is considered by most people to be expensive, putting a financial strain on them. However, individuals sometimes are actually paying too much for their car insurance, as there are ways that you can find cheaper insurance.

Car Insurance Discounts

You should always ask your insurance company if they offer any discounts. There are many companies which provide the following discounts to their customers:

• Safe Driver Discounts: If you follow the law, you could receive a discount of up to 15 percent. Your driving record should be spotless for three to five years to qualify for this sort of discount.
• Senior Citizen Discounts: If you are over 50, you could be eligible for a discount.
• Taking Defensive Driving: If you take a driving safety course, and you can show proof that you took the course, you might qualify for a discount.
• Good Grades Discounts: If you have a child who is old enough to drive, you might be offered a discount for their good grades. If the student has completed a course in driver’s education, you possibly could receive an even lower discount.
• Car Features: If your car has anti-lock brakes, an anti-theft device, or airbags, an insurance company might give you a discount on your car insurance.
• Low-Mileage Discount: If your place of employment is close to your home and you rarely take long trips, you could qualify for a discount based on your mileage.
• Multi-Car Insurance: If you have more than one car insured, you can receive a discount.

Save Money By Raising Your Deductible

If you raise your deductible, you can also save money on insurance. The higher the deductible, the lower your premium will be. However, you want to make sure that you can pay your deductible before you agree to increase it.

Timing of Your Premium Payments Affects Your Rates

If you are able to, you can save money on car insurance by paying the premium in full. Many people pay insurance every month, but most companies give you the option to pay it in one lump sum. The overall amount of money that you pay will be lower if you choose to pay it all at once (or twice a year is a common payment frequency in the United States as well).

Be Sure to Shop Around and Compare Rates

Another great way to save on car insurance is to shop around for the best rates. You might be paying too much because you are trying to be loyal to your agent. However, cheap insurance companies now are very competitive, and you need to search around for reputable agents to get a great deal. Most online companies will provide you with free quotes; therefore, try to get several rates before deciding on car insurance.

Conclusions

There are ways to lower your insurance rates if you can just find the right company to offer you the best deals. You need to try to save money any way that you can, and car insurance is one area in which the savings can really add up.

How about you all? What ways do you use to save money on your car insurance? What discounts have you been successful in finding and/or negotiating? Do you prefer to get your insurance company-direct or through a local agent?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• As I’ve mentioned before, because the issue of car insurance affects such a large number of people, it makes for very good discussion in the blog and/or online forum setting. In fact, recently, I wrote an article about how car insurance rates specifically vary based on gender, age, and geographic location. Pretty interesting results!
  • Needless to say, I’m glad to continue the debate with this article as well!
• @ Ways to Save Money on Car Insurance 
  • Be sure to shop around before buying – One of the most important things for me when I start the process of looking for any type of insurance is to make sure to shop around and get a good feel for market prices of insurance premiums from a variety of providers. There’s a great deal of competition out there in the insurance market today, and we as insurance buyers can take advantage of this!
  • Purchase multiple insurance policies from the same provider – In addition to the list of discounts detailed above, another one I’ve heard of quite commonly is getting a price break if you purchase multiple types of insurance (e.g. business, home, car, life, etc) from the same carrier.
    • As far as the extent of the discount you can receive with this tact remains unknown to me as of right now. However, it is something that might be worth trying! But, just be careful that the insurance premiums of the “add-on” policy from the same provider is in fact a competitive, low price compared to other insurance providers.
• @ Good grades car insurance discounts – 
  • My parents actually were able to use this technique to get a break on pricing for my car insurance when I was in high school. They’d simply request a copy of my report card to provide proof of my grades to the insurance agent.
• @ Raising your deductible to lower car insurance premiums – 
  • It’s definitely true that raising your insurance deductible will significantly lower your monthly premiums.
  • However, one needs to exercise a good bit of prudent deliberation before raising your deductible. First and foremost, you need to make sure that for whatever deductible you decide upon, you will always carry at least this amount in a cash emergency fund. By having an emergency fund, you ensure that you are able to immediately pay your car insurance deductible and get your insurance policy to kick in.
  • Personally, I think a good amount of a deductible for car insurance would be $500-$750 (about the same as for health insurance deductibles). This is significantly lower than my homeowner’s insurance policy deductible of $2500 due to the fact that there is much more risk of me being hit by another car and having to tap in to my car insurance than for my condo burning to the ground.
• @ Question of whether it’s better to “buy local” or direct from a nationwide company – There seems to be an ongoing debate/battle between different groups about whether it is better to “buy local” versus to buy direct from a national or multinational corporation. And, car insurance is no exception to this “war!”
  • Personally, while I would probably prefer to buy local (mainly to have someone in my same town to talk to about my policy), when it comes to car insurance, I would not hesitate to buy direct from a big provider like Shelter, State Farm, etc, if it meant saving me a large sum of money.
  • When I purchased the insurance for my condo, I compared prices at many insurance providers (both local and national). Ultimately, I took out a policy with a local insurance agency who brokers policies from the national corporation, Erie Insurance. As it turned out, the price for the policy using the agent was no more expensive than buying direct from the company. Go figure!

***Photo courtesy of http://www.flickr.com/photos/insurewish/4112407433/sizes/z/in/photostream/