Here are my Top ten tips and getting the best auto insurance rates.
No.1 Don’t assume any one company is the cheapest. Some companies spend a lot of money on commercials, trying to convince you that they offer the lowest car insurance rate, you’ve likely heard them all. The truth is that prices people pay for the same coverage at the same company very widely and no single company can claim to be the low price leader. The insurance company that’s cheapest for one person in one place might be the most expensive option for a different driver in another state. Some insurance companies also have develop complex predictive models that may charge you higher rates if they show that you are unlikely to switch providers. This might sound unethical, but this practice is called price optimization, and while it’s banned in 16 states that leaves 34 states who engage in the practice. There’s quite a bit of savings at stake. A recent analysis found a difference of $859 a year between the average insurance quote and the lowest available quote at any given time. Again, the only way to ensure you’re getting the best deal is to shop around. There are several independent sites that you can use to do comparing just make sure that you’re not using one put out by the insurance company itself because you can guess where that might lead you.
No.2, Don’t ignore local and regional insurance companies. Just for companies control nearly half the nation’s car insurance business. That’s all state Geico, Progressive and State Farm. But smaller regional insurers often have higher customer satisfaction ratings than the big names and they may have lower rates too. Here’s another suggestion. Look for the insurance agencies that represent multiple companies, not only are they happy to help you shop, but they aren’t spending the big bucks like the four I already mention. They put a lot of emphasis on helping the little guy.
No.3, Check for the discounts. Insurance companies provide a variety of discounts including price breaks for customers who have the following. A good driving record. It’s no secret that a good driving record will help lower your rate. Also consider bundle insurance with other policies such as homeowners insurance. Bundling generally reduces rates on one or both policies. Consider ensuring multiple cars with one policy. You have to buy insurance for the others anyhow, so see what they can do on the other vehicles you own.
Pay your entire annual or 6 month premium at once, payments might be the only way to go for some people but you definitely save money when you pay in advance. Agreed to receive documents online. Own a car with certain anti theft or safety features. Now I’m not talking about the bogus theft edge system sold by car owners, I’m talking about the legitimate anti theft systems installed by manufacturers or after market installers of anti theft equipment. The final discount you might consider is being a member of particular professional organizations or affiliate groups. You’d be surprised how many organizations out there have some affiliations with the insurance compan and being a member actually saves you money, check it out. Discounts can vary by company and location. So check insurance company websites or consult with agents to find out which ones might applied to you.
No.4, Be aware that your credit is part of your calculation. Your credit is a significant factor in the car insurance quotes your receive. There are only three states, Hawaii, California and Massachusetts, which don’t allow insurance companies to use credit. Insurance companies say that customers credit has been shown to correlate with the risk of filing a claim. You might scoff at that 47 states allow insurance companies to use it in their calculations. So you need to be aware of it. Here’s what I suggest, improve your credit. First, make sure you pay your bills on time. You don’t need your credit report filled up with frivolous, negative things, and if you do have damage credit that needs some help, contact a local credit union in your area and consider taking out a small person alone, even if it’s just $200. And even if you have to put the $200 on deposit in the credit union, in order to get the loan, put the money on deposit at the credit union and then let them take the payments out of it. You’ll be surprised how much a small loan like this will improve your credit in a short period of time. When you paid off the loan, take out a little bit larger one and do it again. By paying your bills on time and using the strategy that I just suggested with a local credit union, your insurance premiums will go lower too. Don’t forget that you get one Free credit report a year so use it and track your progress.
No.5, considering insurance costs when buying a car. Did you know that some makes and models are much more costly to ensure than other? I am personally stunned by the number of people who go car shopping without insurance. Yet I’ve seen situations where person went home to find out that their insurance rates are doubling or even tripling, a little tough to get out of it. Then you should also consider that insurance premiums vary widely between given models and talk to your insurance agent before you go car shop. For example, a review of rates done by an organization called nerd wallet on best selling vehicles in 25 cities, found that the Toyota Camry costs an average of $187 more pre to ensure than the comparable Honda Accord. Similarly, a Toyota RAP four costs an average of $201 more a year to ensure than a Honda CRV. That’s the difference you need to be aware of.
No.6, if you own a clunker card, consider dropping your collision and comprehensive coverage on that vehicle. Here’s why. Collision covers the cost of repairs resulting from damage your vehicle receives involving another car or an inanimate object. Comprehensive pays to repair vehicle damage caused by whether animals or reimburses you for your car if it was ever stolen, but both will only pay up to the value of your car. If your clunker is old with a low market value, it really makes no sense to be paying for a policy that includes collision and comprehensive.
No.7, consider a bigger deductible. You need to carry comprehensive and collision if your car is a later model or if your lender requires it. But you can save a substantial amount of money by raising the deductible. Studies have shown that customers will increase their deductibles from $500 to $1,000 saved about $200 per year on premiums. While those who increase them from $500 to $2,000 saved $362 a year. Just remember that the increasing deductible also means that you’ll pay a little bit more if you have an accident, but I suggest you keep that extra money in a savings account somewhere anyhow. If you have an accident, you have the money, if don’t, you have extra savings that you started in advance and extra money you’re saving on your policy.
No.8, consider an insurance plan that is calculated on your personal usage, especially if you don’t drive much. If you’re an infrequent driver or a safe driver who doesn’t like very many miles, consider a usage based insurance programs such as all states drive wise or progressive snapshot or state farms drive safe and safe. I can tell you from personal experience that they work well. By signing up for these programs, you allow your insured to track your driving electronically in exchange for possible discount. Based on how much you drive when you drive and how will you drive a little word to the wise. Don’t be driving your car hard during this time. I noticed on a few occasions when I had to break hard that the under dash device B. I did receive a discount later but I thought it was interesting that the device noticed when I had to stop rapidly. For those of you who drive less than 10,000 miles per year, you might be able to save money with a mileage based insurance programs such as Metro Mile or Insurance pay per Mile. Metro Mile is currently available in 7 state, While Insurance pay per Mile is only available in Oregon. These last 2 points are specifically for car buyers, but that’s pretty much everybody.
No.9, if you’re buying a new or used car at a car dealer, ask your insurance provider about gap insurance first. There are plenty of drivers on the road who don’t need gap at all. That’s the coverage that pays the difference between what you owe on the vehicle and what its actual market value is. That’s where the name gap comes from. However, this happens to be one of the most common products sold the car buyers while they’re in the finance office and it sold anywhere from $400 to as much as $1,000 for a single card. Meanwhile, it’s very likely you could have purchased the same policy if you even needed it at $30 a year from your own insurance provider. Make sure you talk to a neutral party about gap insurance before you go car shopping.
No.10, be very cautious about any other products that sound even remotely like insurance while in the finance office at the car dealer. If you’re offered any insurance products like extended warranties, theft protection policies, window edge programs, roadside hazard coverages, wheel or tire coverages, etc, tell the finance man you want to go home and sleep on it. In the morning call your insurance provider and also go online to do a little bit of homework yourself. Look these products up, you can always go back and add them to your car deal and most dealers will hold on to the paperwork for as much as a week if they know that you’re serious about doing this homework and you may potentially come back, take your time, a lot of money is made off of people who pulled the trigger on that stuff the day of the car sale. By the way, if you were one of those people who bought a bunch of these extras on your car deal, it’s never too late to get it cancelled. You can always go back. While after the fact after you’ve signed everything, it doesn’t matter if it’s a week, it’s a month a year go back and get this stuff can sold on your car if you decided you didn’t want it after all.
Thanks for joining me on this top ten tips for cheaper car insurance.