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6 Simple Ways to Save on Car Insurance

Car InsuranceHave you ever looked into how much you’re actually paying for car insurance? Sure, you probably know how much you pay into the insurance company each month but are you really saving money on it? If you don’t know the answer to either, then my suggestion is to start a budget now and also start comparing prices to see how you can be cutting back on all of your services.

If you start comparing car insurance rates, you’ll likely find there can be a wide difference between what different companies charge. Beyond the obvious comparison shopping there are other ways you can save on car insurance as I’ve outlined below.

Buy an Inexpensive Car

There are so many people that buy a brand new car because they can “afford” the payment, but they completely forget about the cost to  insure it! Sure enough, when they call their insurance agent, they discover that they need full coverage which is going to cost them a pretty penny each month. This payment is on top of the car payment as well!

This is not a fun experience, but there is a pretty easy solution. Instead of buying a brand new vehicle, buy a used one. By purchasing a car with a lower value, you will automatically be dropping the amount needed to cover the car and thus save you money each month.

Buy a Car That’s Known to Have Cheap Insurance

The insurance companies have a ton of data that tells them the likelihood of your vehicle getting into an accident. It goes without saying they also know how much it would cost them to repair it as well. Based on their data, some types of cars are just cheaper to drive than others. According to autoguide.com, here at the top 5 cheapest vehicles to insure:

  1. Jeep Wrangler Sport
  2. Honda Odyssey LX
  3. Jeep Patriot Sport
  4. Honda CR-V
  5. Jeep Compass Sport

Get an Online Quote From Their Competitor

If you get a couple of quotes online that are far cheaper than your current insurance, take the quote in to your current insurance provider. Show them what their competitors are offering and ask them if there is anything they can do to reduce your monthly insurance costs. This won’t always work, but if they care about keeping you as a customer they’ll do what they can to make sure you’re happy.

Reduce Your Coverage

If you own your vehicle outright, then you can insure your car for as little or as much as you want. If you have a healthy emergency fund and can afford general car repairs, then why not increase your deductible?

This will very likely lower your car insurance rates each month. Not only that, but if you get into an accident you can pull out of your emergency fund to cover the need. My wife and I actually have a separate bucket for our car repair needs so it would come straight out of that.

Insurance Through Your Work

If you work for a large firm then an outside the box approach could be through your employer. When I worked in the corporate world I had several employers who had relationships with different insurance providers. The beauty of this partnership is that it can often result in reduced rates as well as having the payments auto deducted from your paycheck if you so choose.

My wife and I have all of our insurance coverage through USAA and would take a lot for us to leave them, but often found that some of the car insurance partnerships available were competitive in price.

Switch to Another Car Insurance Provider

This last option is easy. If you try to work with your current car insurance company, but they can’t give you any additional discounts, then switch to a company that can! It really isn’t all that difficult and it could save you hundreds of dollars a year. I’ve done this in the past with both Allstate and Geico and each time I’ve been able to save money on my car insurance needs.

 

What are some other ways you’ve been able to save money on car insurance? How much is your bill each month? Would you ever cut your coverage to the bare bones and rely on your emergency fund instead?

 

 

Photo courtesy of: Natloans

 

 

*This post was featured on Penny Thots.
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John Schmoll is a Dad, husband and veteran of the financial services industry. He's passionate about helping people learn from his mistakes so that they can live lives free from the shackles of debt and empowered to make their money work for them. You can check out his other sites: Frugal Rules, for ways to improve your financial literacy; and Sprout Wealth for tips on different ways to make more money. John has been featured on Forbes, Lifehacker, Yahoo Finance and US News & World Report and more. If you're wanting to grow your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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2 comments

  1. I agree with you that there are cars that have cheap insurance. I have the Honda Odyssey LX and I also got the info from autoguide.com. We are planning to buy another one in 2015 for my wife. Thanks for the tips. We are considering Honda CR-V.

  2. Agree! The insurance part of buying the car surprised me.

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