Lower Vehicle Insurance: Discounts And Deductibles

Vehicle insurance can be expensive, but there are several ways to lower your costs. Firstly, shop around for a lower rate and get at least three quotes to compare. You can also increase your deductible, which is the amount you pay before your insurance policy kicks in. Another way to save is to reduce your coverage, especially if you have an older car that isn't worth much. Improving your credit score can also help lower your insurance costs, as it is often taken into account when setting your rate. Additionally, look for discounts that you may qualify for, such as those for safe drivers, students, or members of the military. Finally, consider bundling your home and auto insurance with the same provider, as this can often lead to significant savings.

Increase your deductible

One of the most effective ways to lower your vehicle insurance is to increase your deductible. A deductible is the amount you pay out of pocket before your insurance coverage kicks in. By increasing your deductible, you can lower your insurance costs substantially. The higher the deductible, the lower the premium, as you are assuming more financial responsibility in the event of a claim.

For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage costs by 15% to 30%. Moving to a $1,000 deductible can save you 40% or more. It is important to note that you should only increase your deductible if you have enough money set aside to pay it in case of a claim. Additionally, the savings from a higher deductible may be offset by other factors such as the value of your vehicle, your driving record, miles driven, location, and claims frequency.

Before choosing a higher deductible, be sure to compare pricing using several deductible options from different insurance providers. This will help you determine the best value and ensure that you are getting the most savings. Increasing your deductible can be a great way to lower your vehicle insurance costs, but it is important to consider your financial situation and other factors that may impact your insurance premiums.

Compare insurance quotes

Comparing insurance quotes is a great way to find the best deal for your vehicle insurance. Here are some tips to help you get the most out of your comparison:

• Shop around: Get quotes from multiple insurers to find the best rate. Compare at least three quotes to get a good sense of the market. You can use websites like The Zebra or NerdWallet to compare quotes from different companies side by side.
• Standardise quotes: When comparing quotes, make sure you're selecting the same set of coverages and deductibles for each one. This will ensure that you're making an accurate comparison and that any differences in price are due to the insurer's pricing and not the level of coverage.
• Understand the quote: A car insurance quote is an estimate based on the information you provide. The final policy rate may change once the insurer has more detailed information. Make sure you provide accurate and complete information when getting a quote to avoid surprises later.
• Consider other factors: While price is important, it's not the only factor to consider. Look at the coverage options, customer reviews, and the insurer's reputation. Check their financial strength and customer complaint records to get a sense of their reliability.
• Look for discounts: Many insurers offer discounts for things like paperless billing, paying online, good driving records, safety features in your car, and more. Review the discounts offered by each insurer to see if you qualify for any of them.
• Review regularly: Don't just compare quotes when you're first taking out insurance. Review your policy regularly (every 6-12 months) to make sure you're still getting the best deal. Insurance rates can change over time, and you may find a better option by switching insurers.

By following these tips, you can effectively compare insurance quotes and find the best value for your vehicle insurance.

Maintain a good driving record

Maintaining a good driving record is one of the best ways to keep your vehicle insurance costs down. A clean driving record means having no or minimal violations or accidents, and it can make a significant difference in your insurance rates. While the definition of a clean driving record may vary among insurers, even minor infractions can result in higher premiums.

• Obey traffic laws and drive safely: Always follow speed limits, avoid accidents and other driving incidents, and obey all traffic rules. Speeding tickets and accidents can result in expensive fines and increased insurance rates, as they indicate risky driving behaviour.
• Avoid driving under the influence (DUI): A DUI conviction is one of the most serious charges and can lead to significantly higher insurance premiums. It may also result in licence suspension and other legal consequences.
• Be mindful of reckless driving: Reckless driving violations, such as aggressive driving or driving under the influence, can potentially double your insurance premium in some areas.
• Keep your car in good condition: Ensure your car is in proper working order and well-maintained. This can help you avoid accidents and breakdowns and demonstrate responsible driving behaviour.
• Understand your driving record: Request a copy of your driving record from your local Department of Motor Vehicles (DMV). Review it for any errors or discrepancies and address them with the DMV. Knowing your driving history can help you identify areas for improvement and ensure accuracy when speaking with insurance agents.
• Clear your driving record: If you have violations, consider taking a defensive driving course or improving your driving habits. Some jurisdictions may remove points from your record if you complete a driving course. You may also want to consult a traffic lawyer to explore options for expungement, which involves sealing your record and removing the violation.
• Shop around for insurance: Compare quotes from different insurance providers, as rates and policies can vary. Look for insurers that specialise in covering high-risk drivers if you have a less-than-perfect record.
• Take advantage of discounts: Many insurance companies offer discounts for safe driving, low mileage, or other factors. These can help offset higher premiums resulting from a less-than-perfect driving record.
• Improve your credit score: A good credit score can positively impact your insurance rates. Pay your bills on time, maintain low credit card balances, and regularly review your credit report for accuracy.
• Consider trading in your vehicle: If you have a newer or high-performance vehicle, consider trading it for a less expensive or more insurance-friendly model. This can help lower your premiums, especially if your car has modern safety features or anti-theft systems.

Improve your credit score

Improving your credit score can help lower your car insurance costs. While credit-based insurance scores are different from the credit scores calculated by FICO and VantageScore, both types of scores consider similar behaviour. A high credit score likely means a high credit-based insurance score, and vice versa.

• Pay your bills on time every month. If you miss a payment, bring your account up to date as soon as possible.
• Decrease your credit utilisation rate by paying off credit card debt.
• Check your credit report to ensure all the information is accurate and up to date. You can get a free credit report from each of the three major consumer credit reporting companies (Equifax, Experian, and TransUnion) once a year.
• Limit hard credit inquiries. Hard credit pulls, such as those used to determine whether you qualify for a loan or credit card, may temporarily lower your credit score. Try to leave at least six months between applications.
• Ask to be added as an authorised user on a lightly used, established credit card account.
• Pay down credit card balances. Try to keep your balances under 10% of your total credit limit.

Review your current policy

Reviewing your current policy is an important step in lowering your vehicle insurance. Here are four to six paragraphs detailing what this entails:

Reviewing your current policy allows you to identify areas where you may be over-insured or under-insured. For instance, if you've had the same policy for several years, your coverage needs may have changed. As your vehicle gets older, it costs less to replace in the event of an accident, so you might be able to lower your limits associated with vehicle repair, such as comprehensive and collision coverage. On the other hand, if you've recently purchased a new vehicle, you may need to increase your coverage limits to account for the higher repair costs of newer models.

Additionally, if you've paid off any loans on your vehicle or owe a minimal amount, you may no longer need gap insurance, which covers the difference between your car's value and your outstanding loan balance in the event of a total loss. This type of coverage is typically required if you lease or finance your vehicle, but owning your car may give you the flexibility to lower or opt out of this coverage.

Life events, such as getting married, turning 25, or buying a home, can also impact your insurance needs and may qualify you for additional discounts. Be sure to review your policy regularly and update it to reflect any significant life changes. This ensures that your coverage aligns with your current circumstances and that you're not paying for more insurance than you need.

Another aspect to consider when reviewing your policy is the type of coverage you have. While minimum coverage is the most affordable option, it may not provide sufficient protection in the event of a major accident. Full coverage insurance, which includes liability, comprehensive, and collision insurance, offers more comprehensive protection and is worth considering if you want greater peace of mind.

Finally, reviewing your current policy also entails checking for any discounts you may be eligible for. Insurance companies offer a variety of discounts based on factors like your driving record, vehicle features, and policy choices. For example, many insurers provide discounts for safe driving practices, paperless billing, automatic payments, and paying your policy upfront. By taking advantage of these discounts, you can significantly reduce your insurance costs.

Remember to review your policy regularly and compare it with other insurers' offerings to ensure you're getting the best value for your money. This proactive approach will help you identify areas where you can adjust your coverage and maximize any available discounts, ultimately lowering your vehicle insurance premiums.

Frequently asked questions