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Car insurance is one bill that’s impossible to remove entirely from your budget. As long as you own a vehicle, you must maintain car insurance in order to comply with state laws. Since you cannot cut this expense, you must instead focus on keeping the payments as low as possible. There several ways that you can reduce your car insurance premiums.
Auto insurance companies offer policies in six-month or one-year terms. This means that at the end of each policy term, the insurance will review your driving history and other factors and decide if your rates should increase, decrease or stay the same. Whenever you obtain an insurance quote, the price you are quoted will probably be for the full term.
You will usually not be required to pay the full term of your insurance at one time. You will have the option to pay the total cost of the premium once for each term, or you can divide the premiums into monthly payments. Sometimes the monthly payments will add up to a slightly higher premium than you would have paid if you’d paid off the insurance at one time; this is because there are usually processing charges associated with monthly payments. The extra charge is usually minimal, however, and much cheaper than paying the total cost of your insurance on credit with interest charges.
If you are still having difficulty paying your insurance premiums, you should consider finding a way to reduce the cost of your insurance. There are several things you can do that will help make your insurance premiums more affordable:
Focus on safe driving
Your driving history has the largest effect on your insurance premiums, and by maintaining a flawless driving record you can ensure that your rates stay low.
See if there are any discounts you qualify for
In addition to safe-driving discounts, you may be able to receive a student discount, military discount or some other program.
Update your coverage
You can lower your premiums by reducing your limits of liability and increasing your deductible. Take care when you make any changes to your policy that you do not drop below the legal requirements of your state.
Maintain good credit
People with good credit scores have lower premiums than those with poor credit. You can improve your credit by making payments on time and never carrying a balance on credit cards or excessive loans.
Drive safe vehicles
If you have the opportunity to buy a new car, be sure that you purchase one with a high safety rating. Inexpensive cars also cost less to insure, so avoid sports cars or luxury vehicles if you’re trying to save money on car insurance.
Prevent theft and vandalism
Installing an anti-theft device or car alarm can reduce your insurance premiums by making your vehicle a less attractive target for thieves or vandals. You will also pay lower premiums if you keep your vehicle parked in a garage rather than out on the street.
If you ever have a problem making an insurance premium, you may want to charge it to a credit card or borrow money in order to cover the cost. Financing the insurance payment is a better option than missing a payment, as missed payments can lead to your coverage being dropped. If your policy is inactive when you’re involved in an accident, the claim will be denied and you could end up paying for any damage or injuries out of your pocket.
Before borrowing money to cover your insurance premiums, you should contact your insurance company to see if there are any payment arrangements you can make. Alerting your company of a potential lost or missed payment can help keep your policy active and prevent coverage interruptions.
You can contact your insurance company to see if there are any other ways to reduce your insurance premiums. Your agent will be happy to go over your policy with you to determine where you may be able to cut coverage in order to save money; he can also help you find discount programs you can enroll in. You may also be able to obtain lower insurance from another company; you can search online for free quotes to get started.