Auto insurance is an expensive nuisance until you need it. Statistics show that insuring a sedan costs an average of £1,106 per year – approximately 15% of the total cost of owning the car. Car owners pay more each year on insurance than they do for tires, maintenance, and even gas.
There are a number of factors that affect your auto insurance premiums. Some of these like where you live and your occupation is under your control while others like your gender and age aren’t within your control.
However, insuring your car doesn’t have to cost an arm and a leg. Here are a few things you can do to reduce your car insurance premiums.
- Compare Companies
Comparing quotes from different insurance companies seems like an obvious starting point. But many car owners purchase their car insurance without comparing companies. Insurance premiums vary widely and you may be surprised how expensive your insurance policy is. A study of auto insurance found that quotes for an identical car insurance policy ranged from about £500 a month up to £1,500.
- Look to Bundle
If you have multiple insurance policies, consider combining them with one insurance company. Not only will working with one carrier simplify your finances, but you’ll also save on household insurance policies. Many carriers offer multi-policy discounts which range from 15 to 25% depending on the insurance provider.
With more conventional carriers, you’re more likely to get a multipolicy discount if you combine auto insurance policy with a home policy. Be sure to check with your provider to see if they offer a discount for other policies.
- Raise your Credit Score
Establishing a solid credit history is essential if you want to reduce your insurance rates. Insurers use your credit history in setting auto insurance premiums. According to Consumer Reports, a driver with a poor credit score can pay £1,500 more in annual premiums than a driver with good scores.
If you’re looking to get the best premiums or finance your next car, get your finances in order and raise your credit score.
- Raise Your Deductible
The higher your deductible is, the lower your premiums will cost. One survey shows that depending on where you live, you can save 9% by increasing your deductible from £500 to £1,000. The amount you save may vary, so it’s best to consult with your provider.
- Slow Down
An obvious tip to save money on car insurance premiums is to slow down and drive safely. Your driving record affects your premiums more than any other factor. Being involved in accidents and having a lot of moving violations like running red lights and speeding tickets can significantly increase your rates.
In some states, one speeding ticket can double your insurance rates. Your premiums are likely to stay high for the next three years if you violate traffic rules. Similarly, the rates can remain high if you’re involved in an accident in which you were at fault.
By following these five simple tips, you can save money on auto insurance.
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2 Comments
It sure was nice when you said that an obvious starting point is to compare quotes from different insurance companies. My husband and I bought a new SUV last month, and we want it to be protected by an insurance policy. Since we want to find the best deal without neglecting the coverage that our vehicle will get, we will do your tips.
It caught my attention when you said that insurance companies vary widely, and you must compare quotes from different insurance companies. This is something that I will consider to find the best deal on purchasing an insurance policy for my new car. I wanted my sedan to be covered for damages caused by natural disasters without breaking my bank, so I will do your tips.