7 Tips to Saving Money on Car Insurance

If it’s been a while since you have reviewed your car insurance policy, chances are — you are paying too much for auto insurance. In this post, we will list seven tips for saving money on your car insurance bill.

–  Shop around for the cheapest car insurance — By comparing car insurance rates, policyholders can save anywhere from $100 to $1000 or more on their policy, each year. While the concept of comparing car insurance rates has been around for a long time, new comparison tools make finding the best rates, so much easier. Consumers can select a comparison website that allows them to input some information and in a few minutes, they will receive multiple insurance quotes from different companies — delivered right to their e-mail.

– Avoid paying monthly car insurance bills – Insurance providers can charge at least $5 per month extra for policyholders who pay monthly. If possible, try to pay your bill every six months (or per year). If you have to pay monthly, you can save money by setting up an automatic bill payment for your policy. With the auto pay feature, insurance companies charge less because they don’t need to send out a bill, unless your premium changes.

– Keep your credit record clean – Insurance companies base your premium on a number of different factors, including your credit history. Policyholders with a solid credit history will pay less on premiums than those with flaws in their credit report. Therefore, if your credit is good — keep it that way. If your credit is not in good shape — do what you can to improve your score. Steps that you can take to improve your credit rating include paying your bills on time, eliminating or avoiding getting credit that you don’t need and keeping your balances as low as you can. In addition, it helps to regularly check your credit history, in order to identify any errors and have them corrected right away.

–  Keep your driving record clean – Another aspect insurance companies consider when calculating premiums is your driving record. If you have a good driving record — you will pay less for car insurance. However, if you have had any accidents or violations in the last three to five years — your car insurance bill may be higher, as a result. Nevertheless, there is something you can do to improve your driving record: take a defensive driving course. Defensive driving courses are a great way to clear points off your license, which in turn, lowers your car insurance premium. In addition, if you have a teenager, at home — you can save money on car insurance by enrolling them in a driver’s education course.

–  Drop towing coverage – By removing towing services from your policy, you can save $10 to $50 per year, on your car insurance bill. In order to avoid needing tow coverage, keep your car properly maintained and plan ahead. For example, keep a spare tire in the truck, keep gas in your vehicle and avoid locking your keys in your car.

–  Drop car rental coverage – The cost of renting a small economy car (out of pocket) is about $20 to $25 per day. However, car rental coverage can be anywhere from $20 to $50 per year. By eliminating the extra coverage, you can save considerably on your car insurance bill.

Ask about available discounts – There may be discounts that you are eligible for, but you are not receiving. Therefore, it is a good idea to contact your current insurance provider to ask them if there are any discounts, for which you may qualify. Some discounts you may not be aware of include multi-car discounts (insuring more than one vehicle under one policy), multi-policy discounts (getting car insurance, as well as, homeowners, health and/or life from the same company) anti-theft device discount, low mileage discount, safety feature discounts (discounts for vehicles with air bags, anti-lock brakes and/or daytime running lights), part-time driver discounts (for college students or part-time drivers) and loyalty discounts (for long-time customers).

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