8 Ways to Lower Your Car Insurance Costs

 

Many Americans are seeing an increase in their vehicle insurance prices for the second year in a row following a COVID-related reduction. However, there are things you may take to minimize your personal expenses.

According to a recent estimate from ValuePenguin, a website that provides personal finance research, premiums started to rise in 2021, and this year’s increase will be the greatest in six years.

The analysis, which was based on information from significant insurers’ rate submissions, found that average yearly premiums have grown by 16.5 percent since 2017. Currently, a full year of insurance costs $1,780 on average.

ValuePenguin claims that rising repair expenses as well as increased commuter and leisure travel have contributed to premium price increases. Additionally, the risk of damage to automobiles and other property is rising due to extreme weather brought on by climate change, particularly around the U.S. coasts.

Many people opt to stick with their existing insurer rather than looking around for a better offer despite the rising cost of coverage.

15% of drivers have stayed with their same insurer for 25 years or more, according to a 2022 nationwide study by Ipsos for Consumer Reports. However, yearly rate comparisons are crucial.

To assist strike a balance between a good offer and wise coverage decisions, abide by these rules:

1. Shop around

Start by getting in touch with direct-writer insurers that have their own agents and provide affordable coverage, including Amica and USAA. Afterward, consult an independent agent to see if they can locate a cheaper deal with a new insurance provider.

2. Choose a top-rated insurer

You want an insurance who offers fair and quick claim settlements, strong customer service, and assistance and guidance in addition to an affordable price. In our vehicle insurance ratings, you can examine how providers fare on these criteria.

3. Drive carefully

Your rates may rise significantly as a result of traffic infractions or claims. According to a 2020 study from Zebra, an insurance comparison website, getting tickets for texting or using a cell phone while driving increases your premium by an average of more than 20%. Accidents, DUIs, and speeding all greatly raise insurance premiums.

4. Don’t skimp on essential coverage

Make sure you have enough liability insurance to pay for any property damage and physical harm you might cause to another person in a collision. Even if you don’t have many assets to safeguard, get more than the bare minimum. Depending on your state’s laws, a judgment against you can allow for the garnishment of some or all of your wages.

5. Look for cost-cutting options

According to Douglas Heller, an insurance specialist at the Consumer Federation of America, switching to a $1,000 comprehensive and collision deductible instead of a $500 one can lower your premiums by more than 10%. Consider canceling your collision and comprehensive coverage entirely if your automobile is older since you might end up spending more than you would recover in repair or replacement expenses.

6. Downsize your vehicle, if it’s an option

Consider trading in that large truck or minivan for a smaller vehicle if you no longer require it. According to ValuePenguin, a crossover has a $500 yearly insurance savings over an SUV.

7. Drive less, if you can

Because driving more miles increases your risk of being in an accident, insurers charge higher rates to drivers who log more time on the road. Your rates will decrease if you can substitute certain automobile journeys with walking, biking, or public transportation. You’ll also save money on gasoline and maintenance.

8. Maintain a good credit record

Having a strong credit history can help you save money on insurance. The majority of insurers base auto insurance policy pricing on credit information. According to research, those who manage their credit well file fewer claims. Pay your bills on time, don’t take out more credit than you need, and keep your credit card balances as low as possible in order to maintain your credit rating. Check your credit report frequently, and have any problems fixed right away to keep your record accurate.