WiseDollar

Car insurance is a mandatory part of driving, but you shouldn’t spend more than you have to on coverage. Knowing what impacts your premium policy is one good way to stay on top of car insurance costs, but these tips can reduce your overall burden.

Take Advantage of Discounts

Several insurance companies offer discounts and multiple ways to save. Ask your agent to review your account for any possible savings. They’re in the business of keeping you as a customer, so they will attempt to offer you any discounts available.

Drive Safely

Many car insurance companies are offering a safe driver discount. Traffic tickets and accidents will cause the price of your insurance to increase, but some insurance agents are monitoring every day driving, too. A small device plugged into the OBD port of any modern vehicle monitors breaking and speed. Installing one of these devices in your car and driving safely could net you up to 15% savings on your car insurance.

Don’t Pay for What You Don’t Need

Assess the value of your car to make sure you’re not overpaying for insurance. A clunker of a car won’t need collision and comprehensive insurance since these only pay out what the car is worth. If your car is worth less than your deductible plus the amount you pay for annual coverage, then collision and comprehensive protection are useless for you. Evaluate what your vehicle is worth before committing to an insurance policy.

Vehicle Make & Model Affect Prices

That sporty red car may look nice sitting on the lot, but once it is in your driveway, you’ll be paying more for insurance than your neighbor and his sedan. That’s because the type of vehicle you drive will affect how much you pay to insure it. Vans and SUVs tend to be cheaper to insure than expensive sports cars and trucks. Shop around for car insurance because comparing prices is a quick and easy way to save on car insurance.

Increase Deductible

To save money on your monthly premium, you can raise the price of the deductible. The deductible is the cost that must be met by you before your insurance coverage will kick in. Most deductibles for cars are around $500, but if you can afford it raise it to $1,000. On average, you’ll save about $200 a year by being willing to pay more should something happen. If you’re worried about being able to meet a deductible price, set aside money each week. Eventually, you will have enough to pay for the deductible with no out of pocket costs.

Maintain Credit Score

Your credit score is a big factor in how much your insurance will cost you. Make sure you’re paying all of your bills and loan payments on time. You should keep your credit balances well below credit limits and only open new accounts when necessary.

Usage-Based Insurance

If you don’t drive a lot, you may save a ton of money by switching to usage-based insurance. These types of insurance policies are based on how much you drive. Low-mileage drivers who switch to pay-per-mile plans often save money in the long-term.