Auto insurance can be expensive, especially if you’re required to have full coverage because you’re financing a vehicle. There are many different things that affect what your insurance rate and premium are going to be. Some of these you can’t help, such as age, but others, such as your credit, you can.
How to Lower Your Car Insurance Rates and Payments
Interest rates are going up, and so is the cost of owning a car and insuring it. While saving money ahead of time helps, you can do other things that could help make your auto insurance more affordable. According to Investopedia, here are some of the best ways you can save money on car insurance:
- Insure multiple vehicles – Many insurance companies offer discounts if you bundle insurance types (such as auto and homeowners), or if you insure multiple cars at the same residence.
- Keep a clean driving record – The more accidents or moving violations you have, the higher your annual premium is going to be. Practice safe driving habits and you could see a lower premium.
- Take a defensive driving course – Depending on the insurance company, you may be able to qualify for a discount if you take and pass a defensive driving, or accident prevention, course.
- Shop around if your premium increases – You should get multiple quotes every two years or so to see if you can get a lower rate. If your policy is getting close to the renewal mark, and the annual premium spiked, now’s the time to shop around and get those quotes.
- Be wise on vehicle choice – Besides picking a vehicle that fits your needs, you should consider how much it’s going to cost to insure, too. Generally speaking, larger SUVs and trucks are going to cost more to insure than sedans and other smaller cars. If you’re considering a hybrid or electric vehicle, some insurance companies offer discounts for these kinds of eco-friendly cars.
- Consider raising deductibles – If you’re able to set money aside, you can raise your deductible, which lowers your premium.
- Improve your credit – Your credit rating can affect the insurance rate you qualify for. If you’re struggling with credit right now, you may not get the best rate. Take time to improve your credit before you buy a vehicle and insure it.
- Don’t add extra coverage when it isn’t needed – Comprehensive and collision coverage can be great for brand new cars. But if the vehicle you’re driving isn’t relatively new and doesn’t require full coverage insurance due to being financed, you don’t always need to spend money on coverage that could be useless.
- Install anti-theft devices – Installing anti-theft devices such as a car alarm or vehicle recovery system can significantly lower your premium. Check with your insurance company to see which types of anti-theft devices can help.
Can You Switch Your Insurance at Any Time?
Switching insurance companies for a better price is called rate shopping. Ideally, you should rate shop if you move, buy a new vehicle, or your current policy is up for renewal in a month or two. Once you have multiple quotes, reach out to your current insurance company and let them know you plan on switching. At this point, your current insurer may be able to offer you a discount to keep your business, which may or may not be better than the other quotes you received. As long as you give the insurance company proper notice, you aren’t going to have a problem canceling your insurance policy.
After all is said and done, you should make sure your old policy is canceled if you decide to switch to another insurance company. A good tip: follow up with the insurance company and get a written confirmation stating that you canceled the policy.
The Bottom Line
You have to have car insurance. Unfortunately, the cost of insuring a vehicle can be hefty depending on some factors outside of your control. But, you can make your insurance more affordable by shopping around, changing coverage, improving your credit, and choosing the right car.
If you’re in the market for a new vehicle, but worry your credit is holding you back, let Auto Credit Express help. We work with an extensive network of special finance dealerships across the country that are signed up with a wide range of lenders that know how to help bad credit borrowers. Get started today by filling out our auto loan request form.