5 Steps to Cheaper Car Insurance

Car insurance… It’s that coverage that we know we need, but never want to look at (both because it’s boring and because if we’re finally looking at it, it probably means we just had an accident…). But you know what? If you fail to shop around for cheaper car insurance every couple of years, then¬†you’ll end up paying far more than everyone else. It’s the game of the car insurance companies.

5 Steps to Cheaper Car Insurance

You’d think that since you’re a loyal customer with very few infractions on your driving record that they’d cut you a break and continually reduce your insurance rates, but no… In their minds, the longer you go without calling them, the more likely it is that you don’t want to shop around for better insurance. So, they hike up your rates a little bit each year to squeeze as much money out of you as possible. Pretty sad, but undeniably true.

I say it’s time for you to fight back! Stop over-paying on your car insurance and take the five steps below.

Cheaper Car Insurance1) Improve Your Credit Score

No matter how often Dave Ramsey yells at me to get rid of my credit cards, I’ll never do it. And this is one of the main reasons why: The better credit you have, the cheaper car insurance will be for you.

And the reason is simple. Studies have shown that there’s a correlation between high credit scores and safer driving. Basically, the better your credit score, the more likely it is that you’re more cautious and have more character, which makes for fewer claims.

Improve your credit score by:

  • paying your bills on time
  • keeping your balances low
  • developing a lengthy history of credit

Not sure what your score is? Get a free look with Clearscore.

2) Evaluate What You’re Driving

You might absolutely love your cherry red BMW Z4, but chances are that the insurance payments are killing you! Want cheaper car insurance? Then maybe you should be a little smarter about what you drive.

According to NerdWallet, five of the top 10 cheapest cars to insure are the:

  1. Honda Odyssey
  2. Dodge Caravan
  3. Toyota Tacoma
  4. Honda CR-V
  5. Ford Escape

Basically, you want to drive something that doesn’t cost a ridiculous amount to fix, and it should be semi-large and safe. So while you might have a secret love affair with¬†foreign luxury and wicked-fast sports cars, you’re never going to be able to drive them for a cheaper car insurance rate than the vehicles listed above.

Sorry, but that’s just the reality.

3) Check Rates Through Your Work

You can of course shop around at multiple car insurance companies in your area, but I’ve found that the best rates are usually found through your employer. It’s one of the company benefits that people rarely think of, but it makes total sense.

Companies come to your work and pay a small premium to be the only insurance offering through your employer. In return, they receive a batch (likely hundreds or thousands) of customers, who they can then give a slight discount because of the volume.

When I was on the hunt for cheaper car insurance two years ago, my company insurance provider was 10% cheaper than anything else out there. It was super easy and they’ve been great so far!

4) Ask For Discounts

This one is super simple, but is rarely done. Just ask for some discounts! There are tons of them available, but if you never ask, you probably won’t get half of them!

Here are some of the major discounts offered through the top insurance companies:

  • Drive fewer than 7,000 miles driven per year
  • Renew your policy in advance
  • Bundled policies (perhaps home insurance or life insurance)
  • You’re a homeowner
  • Live close to work
  • Own your car outright
  • Use automatic withdrawal

5) Raise Your Deductible

If you’re wise with your money (and you probably are since you’re reading this post about how to find cheaper car insurance), then you likely have a few thousand bucks stashed away for a rainy day — also known as your emergency fund.

Since you have the cash to cover a minor accident, why not save yourself a few hundred bucks a year in premiums and raise your car insurance deductible? In other words, instead of having a $50 deductible and paying $150 a month, why not sign up for a $1,000 deductible and pay just $75 a month?! This move will pay for itself in just over a year, and every accident-free month after that will just be money in your pocket.

Find Your Cheaper Car Insurance

With all the different insurance companies out there and all the options to save, I have no doubt that you’ll be able shave a couple hundred bucks off your premiums this year. All you have to do is take a couple hours out of your day to find it!

Just think, with just two hours of work, you could save yourself $200 or more in insurance. That’s a wage of $100 per hour. Sounds worth it to me, and it should to you too!

Will you hunt for cheaper car insurance today?

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4 comments to 5 Steps to Cheaper Car Insurance

  • whiskey

    Absolutely, all of the above. Add in paying annually. There’s usually a $2-3 a month fee for paying it monthly or some even semi annually. Gotta watch the fees. Don’t forget insurance brokers. They usually have a couple dozen or so companies they can shop. You don’t always have to bundle in order to get multi-line discounts. We always shopped around but SF always gave us the best deal. When I found a broker and he gave me the quotes, I went back to SF to see if they would match. They literally told me no but that “I’d be back. People always come back.” Thought that was pretty arrogant so, here we are today and we pay almost a $1000 less per year on all of it.
    We set up a savings account that is strictly for insurance purposes. Its enough to cover the deductions and the annual fees with a potential of 3% increase, just in case.

    • I had a similar experience with State Farm. They were charging me $88 per month on my 2001 Honda Civic that was worth $2,000. I walked in there with a Progressive quote that was $55 a month and asked them if there was anything they could do since they were obviously charging me too much. They took a look for about 5 seconds, said no, and I walked out in shock. I don’t think I’ll go back to State Farm any time soon. I caught the arrogance too.

  • We always quote our insurance out every couple of years just to make sure we have the best price.

    We combine car, home, and umbrella and look for the best overall deal for those three. Often a company is better at one or the other, but there’s always one that’s good at all three.
    ESI Money recently posted..Help a Reader with Housing Advice

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