Finance Insurance

Five Ways To Reduce Car Insurance Cost

Published at 03/03/2012 12:15:37

Introduction

Car insurance costs can be a big crunch in any budget. Premiums can be over-the-top expensive, but there are ways to save money and reduce your cost substantially. If you do your homework, you can save a lot of money without a lot of time. Learning how to save on your auto insurance can be an important way to save money and educate yourself on the best car insurance policies.

Step 1

Shopping around for the cheapest insurance is one of the best ways to save money. Now you can even do this online and compare insurance quotes with different insurance companies. Some insurance companies actually offer comparisons, but it is still best to check with many different sources. This way, you are finding the lowest rate possible while still getting the best coverage. You can quickly save car insurance cost by simply looking around for the best deal.

Step 2

Another great way to save money is to combine insurance policies. Many insurance companies offer discount rates when you have more than one type of insurance with them. Looking for a company that offers both home and auto insurance can help you to bundle your savings quickly. Great discounts can be had if you have more than one vehicle or type of insurance. Some companies offer many types of insurance and bundling can truly save you on your car insurance cost.

Step 3

One great way to save money is to drop some of the coverage that may not be necessary for your vehicle. Older model vehicles truly may not need full collision coverage. The cost of replacement and coverage is greater than what the vehicle is usually worth. This needs to be weighed carefully to be sure it is the right choice for you. Having just liability is a risk, but if you are a careful driver, it can save you great amounts of money.

Step 4

One of the easiest ways to save money on your car insurance cost is to keep a clean driving record. Avoiding speeding tickets and accidents can go a long way towards saving you money on your car insurance cost. Each time you get a ticket, points are added to your license and these points stay on your record for about six years. These points cause increased insurance premiums and can cause the car insurance cost of your insurance to dramatically increase. When you have accidents on your record, then you are considered a greater risk to potential insurance companies. This will cause your rates to be higher than someone who has not been at fault in accidents and has not acquired tickets.

Step 5

Another important way to save money is to improve your credit score. Most insurance companies now check your credit score and a poor score can cause you to incur greater premiums. Studies have shown that lower credit scores correlate with getting tickets for some reason. This poor score also causes the auto insurance company to view you as a greater risk and therefore, they will charge you more for the same service given to another lesser risk of driver. Taking care of your finances and paying your bills can greatly reflect your car insurance cost.

Tips

  • Shop around for your insurance and don't settle for the first offer.
  • Bundle your insurance plans to save money.
  • Improve your credit score so you are not a risk.
  • Avoid accidents and tickets.
  • Many factors can lower your car insurance cost.

Sources and Citations

www.frugaldad.com

 

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