Be a Good Driver
Being a good driver can reward you with a lower insurance rate. The very best and most basic way to reduce your car insurance bill is to have a good driving record. This means you need to exercise caution when you are driving and obey the speed limit. Here are a few everyday reminders:
- Focus on the road: Don’t talk on your cell phone, send text messages or consume things that are difficult or messy to eat (like tacos or sub sandwiches) behind the wheel. Operating a GPS system behind the wheel is also dangerous. And on this point I’ll add one other thing–your kids are watching you. Do you want your 16 year old texting while they drive? They’ll will follow your lead in how to operate car. If you text, they’ll text (and I’m preaching to the choir on this one).
- Obey speed limit signs: Speeding tickets add points to your record and often result in automatic increases in your insurance bill.
- Use extra caution in residential areas, construction zones and school zones: These areas present more opportunities for accidents, and the fines for moving violations are higher.
- Drive defensively: Be aware of other vehicles in front of you and behind you. When in doubt, err on the side of caution. I suspect the car that passed me yesterday could have avoided the accident. From my vantage point, he was more interest in not letting the SUV get in front of him than he was avoiding an accident.
Drive an Ugly Car
Although high theft cars are desirable vehicles they come with slightly higher rates so you’ll pay more in insurance to drive that high end luxury sports car. You’d be surprised how much the cost difference is just between different model years. For example, insuring an 2005 Acura RSX was nearly $100 more per month than a 2012 Toyota Camry. Value wise, today the RSX is worth less than $10k, while the Camry is almost $30k.
Reduce Coverage on Older Cars
As your vehicle ages, the need for collision and comprehensive coverage begins to decline. A general rule of thumb is that if your car is not worth 8-10 times the premium rate, then full coverage may not be entirely cost effective. You can determine the general worth of your vehicle online with the services of Kelley Blue Book or by consulting with your local auto dealer or bank. Check the value of your car against the cost of your annual premiums and adjust your coverage accordingly each year.
There are also interactive online calculators that can help you determine the amount of coverage you need. Check out this easy to use coverage calculator.
Choose Your Car Wisely
Usually when we are out shopping for a new car we don’t think much about our insurance company. However, insurance rates vary depending on the make and model of the vehicle that you drive. It is important to do some research on costs associated with insuring the type of car you are considering before you buy. Certain factors that determine the cost of insurance include the price of the car, its safety record, likelihood of theft, and the costs of parts to repair the vehicle. State Farm publishes vehicle safety ratings on their website.
Foreign vehicles are often more expensive to insure because the costs associated with repairs are much higher. There are also a variety of safety features on a car that can reduce insurance costs. When you shop for a car, look for vehicles that have daytime running lights, anti-theft devices, air bags and other safety features. You can find a great deal of information regarding vehicle safety and safety features at the Insurance Institute for Highway Safety.
Ship Off Your College Student
Some insurance companies give a discount when your child goes to school 100 miles away and does not have a car with them. The idea is if they don’t have a car, then they won’t be as likely to get in an accident.
If you are a male under 25 years of age you can get a much lower rate (as much as 30 to 40% off) by marking “married” on your auto insurance application. Is it worth it to get married for the auto insurance discount? You tell me.
Take a Driver’s Ed Course
For young drivers, passing a driver’s education course can knock as much as 15 to 20% of their car insurance premiums. However, the driver’s education discount only lasts for about three years after you have received your full licence -as you should be a good enough driver after three years to qualify for normal rates.
Drive a Hybrid Car
Not only do you get preferential parking at stores like Ikea and pay less in gas, but having a Hybrid car could also mean you qualify for special discounts at certain insurance companies. You’ll also get the satisfaction that you’re being a good green steward.
Sell Your Car
None of these tips will save you as much money as dumping your car. You’ll have no need for insurance, you’ll never have to fill up, and you’ll get in great shape!
What tips do you have to reduce car insurance rates?