Buying a car, especially for the first time, is incredibly exciting. However, a vehicle comes with many expenses you need to take into consideration, and none are as important as insurance. The average American spends upwards of $800 annually on car insurance, but many people could actually save a lot if they took the time to review all their options. If you are looking to cut back on some expenses in your life, then see if you can save on your insurance policy.
1. Shop for Insurance Before You Buy
Many drivers make the mistake of looking into insurance after they have already purchased a new vehicle. However, you can compare policies before you make a purchase. This can allow you to make a more informed decision, so you do not waste money in the long run. For example, one car may be less expensive but have a higher deductible. You may be better off paying for a more expensive car now to save money on insurance in the years to come.
2. Buy an Older, Used Vehicle
While you might be excited at the prospect of buying a new car, you could save a lot of money by buying used. Vehicles that are only three or four years old are still perfectly viable and probably come with all the bells and whistles you are looking for. However, they cost far less upfront. They also tend to come with lower insurance policies. Before committing to a new car, you should at least look into what kinds of used cars are in your area.
3. Drive Safely
Once you have your car, you want to continue trying to get the best rates possible. A simple way to do that is to look into what discounts your auto insurance provider has. A common one seen at many agencies is the safe driver discount. This means if you go for an extended period of time without an accident, then you receive a discount. You should be a safe driver regardless, but now you have a financial incentive to do so.
4. Consider Usage-Based Insurance
How often do you truly drive your car? Some people may drive dozens of miles every day, but for others, they may only need their car a couple times every week. If you fall into the latter category, then you can ask your insurance provider about usage-based insurance. This is insurance where you get a reduced rate as long as you drive beneath a set limit each month. These types of policies are becoming far more commonplace, so it is worth looking into.
5. Increase Your Deductible
This tip may not work for everyone, but you may be able to reduce the amount you pay every month by agreeing to pay a higher deductible when you need work done on your automobile. This is particularly useful if your vehicle is in pretty good shape and you rarely if ever get into accidents. You could end up saving a couple hundred dollars annually.
6. Increase Your Credit Score
Car insurance agencies look at your credit rating when determining a rate. A higher score will result in more savings. Even if you have had the same policy for a while, you should always actively try to increase your credit score, and your provider may be willing to give you some discounts for doing so.
Many people simply pay their car insurance without thinking about how much they could truly save. All of these tips are simple to carry out. Even saving a little bit of money each month can add up to some substantial savings, so always work to reduce your insurance payouts.
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.