If you’re going to drive a car, you need insurance. There’s really no way around that. But you have more control over your auto insurance rates than you likely think. And that can translate into big savings.
You know things like traffic tickets are going to raise your insurance rates. But you may not know that many insurers factor in everything from how many miles a year you drive to where you live in determining your rate.
Consider these ideas to get quality coverage at reasonable rates:
1. Comparison shop
That sounds like a no-brainer, but many people don’t understand that policies differ among companies based on subjective criteria. Some companies specialize in insuring young drivers. Others are best suited for those with less-than-stellar driving records.
“In general, the more you pay for car insurance, the bigger the difference between insurance companies’ rates,” according to Insurance.com. “Every company calculates its own price, and they often differ by hundreds or even thousands of dollars. Comparison shopping can help you uncover cheap car insurance companies and auto insurance discounts.”
2. Ask about discounts
Some insurance companies give discounts to drivers who take driver education courses. Others offer “good student” discounts or cut rates for those with anti-theft devices on their cars, notes Insurance.com. Ask the agent to spell out all discounts the company offers to ensure you don’t miss one that would work for you.
3. Explain your good driving habits
Even if an agent doesn’t ask, you want to mention if you are a “pleasure driver.” There is no guarantee, but some insurers may give more favorable rates to a “pleasure driver” who doesn’t drive many miles each year. Those that drive many miles, especially for business, are generally thought of as higher risk and may pay more, according to MoneyCrashers. Of course don’t fib and say you’re a pleasure driver if you’re constantly putting miles on the odometer. Any claim you make might be denied if you bend the truth on your insurance application, notes J.D. Power.
4. Choose a car with insurance in mind
Perhaps the best time to save money on your auto insurance is when you consider buying a car. Car safety ratings, safety equipment and even the size of the car often impact auto insurance premiums, notes MoneyCrashers. One example they cite is that a car with a V8 engine will generally cost more to insure than a compact with a V4. And, of course, safety ratings of each car impact the cost of insurance. Don’t forget to tell your agent about any extra safety equipment you opted to have installed on your car, such as LoJack, a system designed to prevent theft and locate the vehicle if it is stolen. That might help lower the rate.
5. Weigh horsepower and trim
We mentioned the a car equipped with a V4 will likely cost less to insure than one with a V8. But did you know that’s true with the same model car? For example, if you’re considering buying a 2016 Honda Accord, you’ll have a choice of a V4 or V6. You’ll likely pay more to insure the V6 than the V4 even though they are otherwise the exact same car, notes Kiplinger. Plus, of course, you’ll pay more for the trim level with the more powerful motor. Keep those expenses in mind when you go car shopping.
6. File claims judiciously
There isn’t much you can do about your age, profession or marital status, all factors that may be considered when your auto insurance rates are set. But you can work to drive responsibly and keep traffic tickets to a minimum. You can also avoid filing claims for every small ding you find on your car. Those are just some of the individual factors that will likely result in higher auto insurance rates, reports MoneyCrashers.
7. Remember, your ZIP code counts
If you decide to move, consider how your ZIP code will affect your insurance cost. It makes sense that if you live in a large urban area and park on the street, you will probably pay more for auto insurance than someone who lives in the suburbs and parks in a garage. Vandalism, theft and general crime translate into greater risks your car will be damaged and you will file a claim, notes the Insurance Information Institute (I.I.I.), an industry organization. Other factors related to your ZIP code — like weather — will also affect coverage costs. You can’t do much about that, but you can save by choosing a low-crime neighborhood, and a home with off-street parking for your car.
8. File claims on other policies with care
When you apply for auto insurance, the insurer will have access to information about the claims you made on your homeowner’s insurance, reports Kiplinger. If you’ve filed claims within the past seven years, you will likely pay a higher premium for auto insurance.
9. Keep your credit score high
Insurance companies use your credit score as a way to predict if you’ll file a claim, reported Insurance Information Institute. “Credit-based insurance scores are based on information like payment history, bankruptcies, collections, outstanding debt and length of credit history,” the I.I.I. reports. “For example, regular, on-time credit card and mortgage payments affect a score positively, while late payments affect a score negatively.” Keep your credit score high, and you’ll likely be rewarded with lower insurance premiums.
If your credit score is in need of a boost, check out: “7 Fast Ways to Raise Your Credit Score.”
What have we missed? Do you have tips to help save on car insurance? Share with us in comments below or on our Facebook page.
How to find cheaper car insurance in minutes
Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.