Budgeting
Over the course of my career I have seen too many people overpaying for car insurance. There are some low-lift ways to save money on your car insurance.
Photo by serjan midili / Unsplash
Salt & Pepper Finance is an independent expert publication– we don’t bend to affiliates like those other blogs. Our experience and suggestions are our own and not fueled by anyone else (or their money). Plus, we’re people– we have been in debt and made it to the other side. We grew up where money was a taboo topic and we want to help answer the questions that are real, but not commonly discussed. For more info read our About Us page. If you’d like to help our cause please consider joining our free newsletter.
Saving money on car insurance can feel like a tricky puzzle. There’s no single solution that fits everyone, but there are definitely ways to make sure you’re not paying more than you need to. Over the years, I’ve navigated the maze of car insurance premiums, discounts, and coverage options, learning a thing or two along the way. Let’s dive into the nuts and bolts of how you can save money on car insurance, using some tried and true methods that worked for me and might just work for you too.First, please consider subscribing to my email list. Here’s what you’ll get for free:Our printable downloadsOur digital downloadsAll of our exclusive credit card articlesWait listed for our insights newsletter
Join Salt & Pepper Finance
We’re Done Playing The Game. Companies can’t buy our reviews. We’re people first. Let us prove it.
No spam. Unsubscribe anytime.
Understanding What You’re Paying ForFirst off, it’s crucial to know what exactly you’re paying for. Car insurance premiums are influenced by several factors:Coverage Type: Liability, comprehensive, and collision coverage all affect your premium differently.Deductible Amount: Higher deductibles generally lower your premium but mean more out-of-pocket costs if you need to file a claim.Vehicle Make and Model: Some cars are more expensive to insure due to their repair costs, safety ratings, or likelihood of theft.Driving Record: A clean record usually translates to lower premiums.Location: Urban areas with higher traffic or crime rates often have higher premiums.When I first started paying for car insurance, I didn’t realize how much each of these elements impacted my total cost. Breaking it down helped me understand where my money was going and where I could potentially save.Shop AroundOne of the most straightforward ways to save money is to shop around. Don’t just renew your policy without checking what competitors are offering. I once made the mistake of sticking with the same insurer for years because it was convenient. It wasn’t until a friend nudged me to compare rates that I realized I was overpaying by a significant amount.Online Comparisons: Use comparison websites to get a quick overview of what different insurers charge for similar coverage.Direct Contact: Sometimes, speaking directly to an agent can uncover discounts that aren’t advertised online.Annual Check: Make it a habit to compare insurance rates at least once a year. Markets change, and a better deal might be available.Bundle PoliciesMany insurance companies offer discounts if you bundle multiple types of insurance with them. For instance, I bundled my car insurance with my renter’s insurance, which knocked off a good chunk from my premiums. Here’s how bundling can help:Multi-Policy Discount: Combining home, auto, and even life insurance can lead to significant savings.Simplified Management: Dealing with one company for multiple policies can streamline payments and claims.Why Is My Car Payment So High?Why is my car payment so high? This is a common question when faced with purchased any vehicle. Here’s the explanation you’re searching for.Adjust Your CoverageSometimes, we pay for more coverage than we need. It’s easy to opt for comprehensive packages without considering whether they’re necessary. When I took a closer look at my policy, I realized I was paying for rental car reimbursement, even though I had another car at home I could use. Here are some ways to adjust your coverage:Raise Your Deductible: A higher deductible can lower your monthly premium. Just make sure you can afford to pay it if you need to file a claim.Drop Unnecessary Coverage: If your car is older, you might not need collision or comprehensive coverage. The payout might not be worth the premium cost.Maintain a Clean Driving RecordThis might seem obvious, but your driving record has a significant impact on your insurance rates. After a minor fender bender a few years ago, my premium shot up, and it took a couple of years to go back down. Here’s how to keep your record clean:Safe Driving Habits: Avoid speeding and aggressive driving. Even minor tickets can affect your premiums.Defensive Driving Courses: Some insurers offer discounts if you complete a defensive driving course.Accident Forgiveness: Some policies include accident forgiveness, which prevents your rate from increasing after your first at-fault accident.Leverage DiscountsInsurers offer a variety of discounts that can significantly lower your premium. When I started asking about discounts, I discovered I was eligible for several I hadn’t known about. Common discounts include:Good Student Discount: If you or someone on your policy is a student with good grades, you might qualify for a discount.Low Mileage Discount: If you don’t drive often, ask about discounts for low mileage.Safety Features Discount: Cars equipped with features like anti-lock brakes, airbags, or anti-theft devices can often earn discounts.Improve Your Credit ScoreSurprisingly, your credit score can affect your insurance rates. A higher score can result in lower premiums. I made a conscious effort to improve my credit score, and it reflected positively on my insurance costs. Here’s what you can do:Pay Bills on Time: Consistently paying your bills on time improves your credit score over time.Reduce Debt: Try to keep your credit card balances low relative to your credit limits.Check Credit Reports: Regularly check your credit report for errors and dispute any inaccuracies.Consider Usage-Based InsuranceUsage-based insurance (UBI) can be a great option if you’re a safe driver who doesn’t drive a lot. UBI programs use telematics devices or mobile apps to track your driving habits and mileage. I tried a UBI program and found that my safe driving habits significantly reduced my premium. Here’s how it works:Monitoring: A device or app tracks your driving behaviors, such as speed, braking, and time of day you drive.Pay-Per-Mile: Some UBI programs charge you based on the number of miles you drive, making it ideal for infrequent drivers.Avoid Gaps in CoverageIt’s important to maintain continuous coverage. Gaps in insurance can lead to higher rates when you reapply. Once, I let my policy lapse for just a couple of weeks while switching jobs, and I ended up paying more when I got a new policy. Here’s how to avoid gaps:Renew on Time: Set reminders for policy renewals.Switch Smoothly: When changing insurers, make sure there’s no lapse between the end of your old policy and the start of your new one.Drive a Car That’s Cheaper to InsureNot all cars are equal when it comes to insurance costs. Sports cars and luxury vehicles often come with higher premiums. When I bought my latest car, I chose a model with a good safety rating and lower repair costs, which helped keep my insurance affordable. Consider these factors when choosing a car:Safety Ratings: Vehicles with higher safety ratings often cost less to insure.Repair Costs: Cars with lower repair costs can reduce your premiums.Theft Rates: Cars that are less likely to be stolen typically have lower insurance costs.How to Finance a Car Without Going BrokeBuying a car is a love/hate relationship no matter how good your finances are. It’s just one of those necessary evils for the majority of America. Here’s how to finance a car without going broke or losing your mind.My Thoughts on Saving Money on Car InsuranceNavigating the world of car insurance can feel overwhelming, but there are plenty of ways to save money if you know where to look. From shopping around to adjusting your coverage and leveraging discounts, small changes can lead to big savings. My own experiences taught me that a little research and a few strategic decisions can go a long way in keeping car insurance costs down. So, take a closer look at your policy, ask questions, and don’t be afraid to make changes that benefit your wallet. After all, the money you save can go towards something more exciting than premiums—maybe even a road trip with your well-insured car.
This review is an opinion based on my experience, I’m not providing financial advice. None of the content in this article has been influenced or endorsed by any advertiser or card issuer. Information regarding financial products, such as card rates and fees, was verified as of the publication date. While I’m pretty good at updating, I’m not a machine so I do not guarantee the accuracy of product or service listings. Visit the issuing bank’s website for up-to-date details.
