How to Make Car Insurance More Affordable

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Making car insurance more affordable is easier than you think. (Photo: @doondevil via Twenty20)
Are you paying too much for your car insurance? It may sound like a cliche advertisement, but the data show most Americans are indeed overpaying for car insurance. There are a number of ways you can make car insurance more affordable.

Shop for Car Insurance Quotes

Not every insurance provider is going to offer the same rate for the same driver. Because there are so many factors that play a role in determining your insurance premium, including your age, driving record, state, vehicle usage, and the company profile itself, there’s a high probability that you could find extra savings by switching insurance providers.
Find a handful of regional providers, including local independent agencies, and call them asking for a quote. You’ll need to know your driving profile, as well as the vehicle identification number (VIN) for the cars you plan to insure, to get the most accurate quote.

Ask Your Car Insurance Company for Discounts

Car insurance providers offer discounts for things safe driving, having multiple cars, membership affiliation (AAA, for example), and even good grades if you’re a student, just to name a few. These discounts routinely go untapped by drivers, so make sure to call your agent and ask them about any and all discounts available to you. Some might only be accessible after life-changing events, such as getting married, buying a house, or having a baby.

Improve Your Credit Score

Having good credit will ultimately impact what you pay for car insurance, so maintaining a strong score is a must for maximum savings. Simple things like paying your bills on time and in full can go a long way, especially for younger drivers who typically cost the most to insure. Establishing solid credit will pave the way to affordable car insurance.

Ditch Unnecessary Coverage

In the states that require car insurance, most only mandate liability coverage, leaving it up to the driver to buy collision and/or comprehensive. While both of these are great for new cars with high assessed values, as depreciation kicks in, you may end up overpaying for coverage you won’t benefit from with an older car.
This is why you should ask your insurance agent what they believe your car’s value to be. If your premiums for collision and comprehensive are more than 10% of that value, you’re probably overpaying and should consider dropping those in favor of saving money for a newer car.

Raise Your Deductible

Your deductible is what you’re required to pay out-of-pocket before insurance kicks in, should you file a claim. By raising this number, you can actually save money on your premium payments. This is a great way to save if you’re a safe driver with a nearly accident-free driving record.
However, understand that by doing this, you will be required to pay more out-of-pocket if you get into an accident.

Consider a Usage-Based Car Insurance Program

It is becoming more popular, especially as technology advances, to accurately bill drivers for their driving behavior and frequency. Most usage-based car insurance programs use data collected from a car’s onboard diagnostic port to determine how much you drive, how you drive, and when you do most of your driving. If you travel less than, say, 12,000 miles a year, have a good driving record, and avoid late-night motoring, chances are you can save a substantial amount of money on your car insurance by opting in to these programs.