Smart Ways To Reduce Your Average Cost Of Car Insurance

Kreg Bale
Kreg Bale November 11, 2020
Updated 2020/11/15 at 3:21 PM
average cost of car insurance

It is not cheap to own and maintain a car, but this doesn’t have to make you break the bank. It is often advised that you have car insurance – and an accident will often make anyone thankful to have insured their car. The average cost of car insurance is on the increase because of the high cost of vehicles across the country.

Unfortunately, the average cost of car insurance is not likely to go down any time soon but the great news is that there are smart ways to reduce your average cost of car insurance.

Therefore, the following strategies would help you reduce the cost of your car insurance.

Here Are Smart Ways To Reduce Your Average Cost Of Car Insurance

average cost of car insurance
Average Cost of Car Insurance

You Must Check Around For Better Premiums


You should consider checking around for better quotes if you are on the verge of renewing your policy and the premium has suddenly increased. Besides, it is advisable to check around for better quotes every two to three years just in case there is a cheaper rate.

On the contrary, the cheap rate companies do not always mean they are good or the wisest thing to do. This is because the creditworthiness of the company should be a determining factor – it will guarantee if the insurer can pay an insurance claim.

Therefore, to scrutinize any company, you should check with the body that rates the financial strength of insurance companies. The financial strength of a company is important but the coverage of your policy should also be considered, so, be sure you understand it.


Buy A Car That Is Cheaper To Insure


It is important to compare the insurance rate of a company against the model of the car you wish to buy. The type of car you drive determines the average cost of car insurance especially if you buy a collision and comprehensive plan. However, small SUVs and moderately priced cars usually have cheaper premiums than expensive ones.

So, you can save money on insurance premiums by driving cheaper vehicles.


Raise The Deductible


You should work towards reducing your car insurance premium by increasing the deductible. The deductible is the amount you pay from your savings after making a claim. Usually, the deductible ranges from $250 to $1,000 depending on the type of policy.

Here is the kicker: the lower the deductible, then the higher the insurance annual premium and vice versa. So, find out from your insurer how the premium would be affected by raising your deductible. The premium might become better, making you save money.

However, if you are thinking of filing small claims to prevent raising your premium – then raising your deductible could be the smartest move.


Work On Your Credit Rating


Your credit score is a determining factor used by your insurer when calculating your premium. Besides, this is more important than your driving history in some states – except for states like Massachusetts, Hawaii, and California where credit rating is not used in fixing premiums.

Therefore, the following steps will help you boost credit ratings;

Ensure you keep your credit card balances lower than your credit limits

All your credit card payment and loans should be settled on time

Having several credit card accounts can affect your credit ratings, so you should do this only when it is necessary.

Therefore, you should know that your credit score is a factor in setting your premiums and do all within your power to maintain it’s high.


Consider Pay-As-You-Drive Insurance


If you are not a regular driver, you might want to consider the pay-as-you-go program as a means of reducing your average cost of car insurance. This is achieved by installing a device inside the car – this transmits data to your insurer where you get discounted for low mileage.

This you can get with companies such as Nationwide, Esurance, Allstate, Mile Auto, and Metromile. This arrangement ensures that you are charged a base rate in addition to the per-mile rate.

Other companies like Progressive, Safeco, Travelers, and State Farm offer a usage-based insurance policy. This means your insurer would be able to track your speed and brakes. With this, they offer a discount when you drive safely.


Do Away With The Insurance Policy You Don’t Need


Doing away with certain coverage can make you cut down on the average cost of car insurance. So, if you are driving an old vehicle, it would make sense to drop the collision or comprehensive plan – though, this should be based on your driving record, cost of the car, and some other factors.

Besides, if the cost of your car is less than your deductible plus your annual premium, then drop the collision and comprehensive policy.  So, do not pay a premium that is more than the worth of the car.

So, the idea is dropping the collision and a comprehensive plan would make you save money that can be spent on down payment or repairs as soon as a new car arrives.


Safe Driving


Safety-conscious drivers end up being rewarded with a good premium on their insurance policy. So, to enjoy this you should desist from over speeding thereby staying away from accidents. Besides, you are guaranteed of saving up to 5 percent or even more on the premium.

However, many companies would further reduce the average cost of car insurance if you do not violate any traffic violation consistently every three years.


Install An Anti-Theft Device


Also, you can reduce the average cost of car insurance when you install anti-theft devices. If you insure with Geico – you could save up to 25 percent by installing an anti-theft device inside your car.

At this point, your insurer would notify you which device to install to get your premium reduced. You can inquire from your insurance company about LoJacks and car alarms.

However, you must also consider the cost of adding these devices to your car if it is worth the stress and spending, especially if the purpose of installing it is to lower the premium.


Final Thought   


So, due to the continuously rising cost of insurance plans as a result of the rise in the cost of an automobile; it would be a good idea if you consider these smart ways of reducing your average cost of car insurance.

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