How to reduce cost of auto insurance
Auto Insurance
Top 10 tips to reduce the cost of your insurance in policy in 2023
1. Shop Around
Don’t automatically renew your existing policy as your insurer might not be applying the biggest discount available. Be sure to shop around and look at different insurance companies to compare the level of coverage and price. Insurance comparison sites such as Coverzoo.com will compare rates from over 25 different insurers to save you time and hopefully, money.
Once you have compared a number of different policies you’ll know how good, or bad the renewal premium is from your current insurer. You could then contact them to see if they can match the quote or even beat it.
2. Do You Need Extras
Insurance companies offer lots of different extras and add-ons when you’re finalising your policy, so don’t choose anyunnecessary options because the agent is recommending it. Check your minimum state requirements and select a policy that has everything you need to drive in that state, plus any options you know you can’t do without.
If you have an older car and cover a lot of mileage, a policy with roadside assistance could be a good choice. But before you tick that box, check to see if you can purchase this type ofcover cheaper somewhere else, like carchex.com.
3. Coverage Type
If you drive an old car or one that’s not worth a lot of money, and you can afford to replace it if it’s destroyed, then you may only need the state minimum insurance policy. This is usually Liability Insurance, which could help cover the cost for injuries and property damage to third-parties for which you become legally liable as a result of an accident.
If you can’t afford to replace your car after a fire, theft, or damage, then consider a Comprehensive Insurance policy. It’s more expensive than Liability Insurance but it provides an extra level of coverage and may help pay for damage to your car due to incidents besides collisions, such as vandalism, accidents with wildlife, and certain weather events.
4. Increase Your Deductible
Most insurers will let you decide on the amount of deductible you want to pay. This is the amount of money you must pay out before the insurance company pays anything. A higher deductible will usually reduce the cost of your premium. If you decide to go for a high deductible figure, make sure that you can afford the amount you select in the event of a collision or loss.
5. Pay Upfront
Once you’ve selected the insurer that you’re happy to work with, check and see if they have a discount for paying your premium in full instead of monthly. Some insurers add interest to the monthly payments so there could be a significant difference between both options. If you can afford to pay it in full and it’s saving you money, it’s a quick win for reducing your premium.
If paying for the full 12 months is squeezing you financially, you could consider paying for the full policy by using a 0% interest credit card. This will cost you nothing extra if you make the monthly payments on time and have cleared the balance on the card before the 0% interest period finishes.
6. Overnight Parking
Parking your car off the road in a garage or driveway could reduce the chance of your car being damaged or stolen. This will help insurers lower their rates as you would be viewed as ‘less-risky’ when it comes to calculating your premium.
Be honest when you’re completing your questionnaire because if you have to make a claim and they find out you weren’t telling the truth, they won’t pay-out.
7. Car Security
If your car doesn’t have an alarm, immobilizer, or tracking device, you could get an estimate to see how much it costs compared to the saving on your auto insurance. Improving your vehicle's security should make a difference and lower your premium.
Other security items like locking wheel nuts, steering wheel locks, or CCTV outside your home could all help lower the risk and reduce your rates.
8. Advanced Driving Class
If you participate in an advanced driving class your insurermay reduce your premium. We know these classes cost money but as you only do the class once, it may lower your yearly premium.
Ask the insurer if an advanced driving class will lower your premium, then compare the potential saving to the cost over the class. This might be more beneficial for young drivers but it’s worth asking to find out.
9. Consider a Black Box
Black Box Insurance or Telematics Insurance works by installing a box in your car, or a mobile app on your phonethat records how you drive and then uses this data to calculate your next premium. They typically monitor how smooth you drive, the distance and speed you travel, and the times of day that you drive most. These factors can make a difference when calculating your new premium.
Black Box Insurance can make your car insurance cheaper, or more expensive, depending on the data sent to the insurer.
10. Keep it Standard
If your car is in full standard spec this should help keep the premiums lower for you. However, if you modify your car by adding wings, spoilers, large wheels, or engine performance modifications, this will ring alarm bells with the insurer and likely increase your premium.
This will also make your car more appealing to thieves which is another reason to avoid modifications. If you can’t help it, be sure to ask the insurance company what affect they will have on your premium.
Quick auto insurance quote >