How to Save Money on Car Insurance Costs: 12 Ways to Reduce Premiums By 50%

Last updated on September 21st, 2024 at 10:28 am

Normally when approaching to year close, insurance costs start alarming, and renewal notifications from the insurance service provider start getting into your inbox. You need to save money on car insurance and it might be among those costs you mayn’t easily forego, then you have to find ways to reduce the expense.

It’s at times hard to determine insurance costs in advance since the factors service providers consider to calculate premiums keep on changing. This means you must find a better insurance provider that will give you the best offer to save despite the determinant factors for insurance premiums.

For example with car insurance, it’s pretty clear why service providers charge high premiums to people at a young age. Honestly, people at age 40 and above are so mindful while on the road hence not so involved in accidents.

As specified above, besides age there are lots of other factors that determine insurance premiums you need to pay annually like driving record, family medical history, gender, location, and more. Another thing you must note about car insurance is that car safety also matters a lot in accounting for premiums.

Types of Car Insurance

Knowing the different types of car insurance available is worth your time when you want the right cover and also cut costs. But since car insurance is basic for car owners, let’s look at some covers you need to know about.

• Collision Insurance

Here the client insures the car against accidents with other vehicles or guard rails and it covers repairs or replacement within the period of cover.

• Comprehensive Insurance

This cover settles non-collision incidents within the year of cover for example fire, theft, vandalism more.

• Liability Insurance

This type of car insurance covers bodily injuries and property damage to other parties involved in an accident where you’re in the wrong.

• Uninsured Motorist Insurance

This covers the insured and his passengers with medical bills, lost wages, car damages, and some other expenses during the year of cover in an accident involving an uninsured driver at fault.

• Medical Payments (Medpay)

Whether you’re in the wrong or not, this settles medical for you and your passengers during the year of cover.

How to Save Money on Car Insurance

Still bothered with how to save money on car insurance on a budget, right? Here are the different ways to reduce insurance premiums by 50% now.

1. Shop Around

When you want to save money on car insurance put in the time to look around for the best offers, service providers are all around to make business. Contact a number of insurance firms or talk to a broker to get you the best service provider in the market.

Also, there are platforms where you can just work out things yourself by feeding in details about your cover to get the best quotes for example GoCompare, Uswitch, and Comparethemarket.

However, using an insurance broker or directly contacting insurance firms about their offers are the two options that you can use shopping around to land on a cheap service provider to save.

2. Request for Discounts

One of the best ways to lower your car insurance costs is by talking to the service provider to offer a discount on a cover.

Guess what? Working a certain job can earn you discounts for example nursing and the Army. Attaining a safety driving course also gives you an edge while negotiating discounts and more.

You can only get those discounts when you talk to the service provider about your concern to save money on insurance premiums. The discount given will reduce your annual expenditure on car insurance compared to way back when you were surviving at the service provider’s mercy.

Yes, you’ll get the best rates in the market in some years despite some slight changes, but the cheapest covers will average out the upside.

3. Clear Premiums on Time

Insurance companies allow people to clear insurance premiums in installments and it’s attractive to clients. But the downside is that it’s more expensive compared to a one-off payment or short-term payments.

You may not be able to pay the premium at once, but it’s better to complete payment in a short period of time to save money on interest paid. Get a credit card that charges no money on purchases made to pay premiums on time to reduce costs.

4. Leave Out Unnecessary Covers

If there are any unnecessary covers that are included in your budget it’s time you pull them out to save money. You just need those covers that offer real value with value for money for example a comprehensive and liability cover.

Let’s say you’re planning to have a new car or done with the car loan some covers can be dropped to save money except liability insurance since it’s hard to predict tomorrow.

Liability insurance covers costs related to medical and repairs in an accident to other parties where you’re in the wrong and when involved in an incident there’s a lot of money spent that’s why it’s a must-keep cover.

5. Drive with Caution

If you want to lower car insurance costs it’s time you start minding about road signs and people along the way to avoid risks. Normally for insurance service providers bad drivers are charged high premiums compared to mindful drivers.

I don’t know about you but driving carefully doesn’t not cost a thing at all unless you’re fine with the hefty annual charges. And when you decide to change character trust me nothing can stop you from saving.

Where driving recklessly is among the factors leading to high premiums, then you have to shape up for the best right now, misusing road signs, drunken driving and more should stop.

6. Bundle Insurance Policies

What if you get all your insurance policies from a single service provider? At times you may not like it but it works when you want to negotiate discounts to lower costs.

Many insurance companies like it when you’re giving them business of this kind. Though the category of insurance coverage is also a determinant factor for premiums charged, bundling puts you at an advantage to get discounted.

Let’s say the total cost of your insurance covers is $2000 annually and you’re given a 20% discount, which is $400 saved on insurance.

7. Mind the Deductible

The higher the deductible the less the annual cost of car insurance to a client and the opposite is true. If you want to save, then you have to increase the deductible amount.

What is a deductible, right? It’s that percentage share you’re supposed to pay at the time of settling an insurance claim by the service provider.

When you’re thinking about how car accident risks are costly, it’s time you also mind insurance premiums paid annually in relation to the deductible. Yes, talk to the insurance service provider about the concern of increasing the deductible to save money on insurance premiums.

Getting involved in an accident where repairs are about $3500 with a deductible of $700 means the service provider will compensate $2800 for the cover. Despite the decrease in premium due to an increase in deductible, it means your contribution at the time of settling a claim also gets high.

8. Switch to an Insurance Premium Friendly Vehicle

Yes, after all you want to save then try all available means around to get the best insurance premium on a budget. What you must know is that new model cars are pretty expensive to insure compared to an old type.

A used vehicle in good condition will serve the same purpose as a new car yet will cost you less when it comes to insurance coverage. Hey, an old car that is not more than ten years from the year of manufacture.

And trust me, if you’re good at car servicing, that 6-year-old vehicle will look new and better for driving you wherever you want.

To spice it up, while looking for an old vehicle you can also seriously take into consideration the car type which can cost less in terms of insurance premiums depending on the service provider to save more.

The best practice is always to share with an insurance service provider to assist while making a decision about switching to an insurance-friendly vehicle.

9. Review Car Insurance Policies

I don’t know how long some people take without looking through their insurance documents to update data. If you don’t have the time to check those documents you might pay a lot more than you’re meant to pay in premium.

Let’s say on the list of additional drivers in the cover there are people who were under 35 years of age some years back, but now they are about 40 years and above. Updating such data can save you a good amount in insurance premiums.

And not only that, let’s say you got a small SUV or a medium-sized pickup. Reviewing such information for updates will change a lot in your insurance premium costs.

10. Opt For a Cost Effective Mode of Payment

Making insurance premium payments can be much easier and cheaper when you try using alternative means as advised by the service provider.

There are benefits attached to each mode of payment for example full one-time payment, advance payments, usage-based and automated payments.

Full one-time payment is where you clear the insurance premium immediately when it’s processed. But it’s very possible this way when you make some arrangements like a sinking fund for car insurance.

Advance payment is another great way to save on insurance premiums by paying a new cover before the expiry of a running cover. Yes, most insurance companies are going to reward you for doing so.

Usage-based mode of payment, allows you to save money while paying insurance premiums depending on mileage. You can decide to use your car a few times in a year to save and that’s when this mode of payment becomes an option.

Automated payment is also another option that will save you money since some insurance service providers reward the convenience it comes with. The insurance company won’t waste resources in demanding balance payments for the running insurance policy cover.

11. Insure With Small Insurance Service Providers

The small insurance companies in your location are competing with those more established service providers and hence endeavor to provide cheap quality service to stay in business.

And since the big companies have a large market share most times their rates are slightly higher compared to the local service providers. Then, for better rates that will save money, you’ll need to switch to the competitor.

Despite a few challenges involved in using small companies to offer insurance, they are better money-saving options since they offer competitive rates in the market.

12. Use Anti-Theft Devices

Most insurance service providers give discounts to people who install anti-theft devices in their cars. This can lower your annual premium rate when the right device as advised by the service provider is installed.

Honestly, you could have an anti-theft device of your choice in mind but it’s the service provider to advise accordingly.

FAQs – How to Save Money on Car Insurance Costs

What Is The Best Way To Save Money On Car Insurance?

Most of the ideas are applicable for saving money on insurance premiums but you just need to choose a few that are most applicable like liability insurance.

Can I Change Insurance Service Provider at Any time?

Not at any time, but after the running cover has elapsed then it is possible to switch to a company of your choice with the best offers.

Which Car Insurance Policy Is The Most Preferred Amongst Clients?

Liability insurance takes the lead since clients don’t want to risk spending thousands in repairs and medical on the injured while in the wrong.

How Can I Get The Best Insurance Service Provider?

A good insurance service is one that offers the best service within your budget, but to look out for one you need to shop around personally or use a trusted insurance broker to do the work.

Ending About Ways to Reduce Insurance Premiums

It’s hard to manage your finances without saving money in this world of day. Being in control of car insurance costs it’s a good financial practice every driver should adopt to save while on a tight budget.

Therefore, If you’re just getting started with car insurance, it would be wise to choose the right insurance cover to save.