If you own or drive an automobile, you are required to carry car insurance. It’s the law. But car insurance isn’t cheap, and when you’re on a tight budget that premium can really cut into your finances. Still, the law is the law, and you have no choice but to carry a car insurance policy. But the cost of insurance doesn’t have to derail your budget. There are ways to get the car insurance you need, without spending a small fortune. So, if the cost of your car insurance is putting a strain on your bank account, we’ve got good news. Here are some simple tips you can follow to reduce your premiums, and save money on your car insurance.
New Car Blues
Nothing beats a brand new car. However, when it comes to insuring that new car, you can get hit with some seriously high premiums. That’s because the cost of insurance is in direct proportion to the value of the car, the make and model, and its safety record. Your insurance premium will also be determined by the size of the loan you are holding, and the balance due on that loan. The first step to saving money on car insurance, is to do a little research before you buy that new truck or SUV. Find out the average insurance costs on the car you are considering, and weigh that against your current financial position.
Change Your Deductible
Your deductible is the amount of money you are expected to pay out of pocket in the event of an accident, or a claim against your policy. Raising your deductible can help to lower your premiums, but it is a choice that shouldn’t be made lightly. If you raise your deductible, you will have to pay more out of your own pocket in the event of an accident. Still, raising your deductible by on a few hundred dollars can lower your premiums by 15 to 20 %. It should be noted, however, that if you have a new car with an outstanding loan you may not have the option of changing your deductible.
Bundling all of your insurance needs with one company can often result in valuable discounts. Insurance companies are always looking to bulk up their customer base, and they will often offer incentives to clients with two or more policies. Insuring all of the family cars, and all of the drivers, with a single insurance company can often result in discounted premiums. Also, check with your insurance agent to see if any discounts are available for bundling your life and home owner’s policies with your auto insurance.
Driving Records and Credit History
Your driving record is a major factor when determining the cost of your car insurance. Agents want to sign safe drivers, who are perceived as good risks. Keeping your driving record clean, and free of traffic violations and accidents, will earn you a lower premium. Your credit history also has an impact on the cost of your insurance. Again, insurance companies want to sign good risk clients. If your credit history is poor, you will be seen as a high risk client and you will be forced to pay a higher premium. Keep your credit history clean, and your driving record spotless, and you will likely score a lower insurance premium.
Going without car insurance is not an option. Every driver must be insured, or run the risk of legal action. However, your car insurance doesn’t have to be a financial burden. Shop around, and compare different insurance companies. See who offers the most affordable policies, and then leverage your credit history and driving record to secure the best rates. If necessary, raise your deductible to secure an even better premium. Saving on car insurance isn’t difficult, you just have to know your options, and how to use them to your financial advantage.