5 Ways to Save on Auto Insurance

December 8, 2011 RSS Feed Print

Just like paying taxes and waiting in line at the DMV, paying for auto insurance is an inescapable part of modern life. If you live in a big city or in the suburbs and do not have a car, there is a good chance you may not be able to get to work very easily. Most states force drivers to purchase auto insurance by penalty of law and if you are caught without coverage, you could face stiff fines and penalties. It is inevitable that you will have to purchase insurance, but there are several different ways you can get your rates down.

[See 10 Ways to Start Earning Extra Money Now.]

Negotiate.If you are in the market for a new insurance provider or are just getting insured for the first time, your best tactic is to shop around and compare prices. By playing the market and making different carriers cater to your needs, you can drive down prices and find the deal that fits you best.

Drop the extensive coverage. When you purchase a new car from a dealer,they force you to get comprehensive insurance in order to take it off of the lot. While having this kind of coverage on a new vehicle is important, after several years you will find that you simply do not need it. Instead of sitting back and paying expensive premiums every month, you should rework your rates and find a deal that is more affordable. While you're at it, consider raising your deductible.

Pay on time. One of the best ways to maintain a low insurance rate is to simply pay your bills on time. If you build a good rapport with your insurance company, they will start to offer you perks and discounts to show you their appreciation for your business. By paying for your insurance on time every month, or paying for six months at at time, you will also cut out the potential for late fees and drive down your monthly payment.

[See 10 Things You Should Always Buy in Bulk.]

Get tickets fixed. If you ever listen to the radio in your car you know that traffic lawyers are all competing for your business. Cops like to bust anyone breaking minor traffic violations in order to get funding for their stations and the lawyers are there to scoop up the residuals. While you may think it is a scam, these lawyers have ties with the court system and will allow you to get the ticket taken off of your record if you agree to certain concessions like defensive driving classes.

Scoot around town. Most state and local governments leave off a glaring omission when it comes to auto insurance. They make you get your major vehicles insured, but allow you to zip around town on a compliant scooter. Not only will you skip out on paying insurance, you will also save on gas because some vehicles can get over 150 miles per gallon.

[See 8 Ways to Spend Less at the Pump.]

Finally, be safe. If you are a safe driver, it may seem like you are paying for nothing when paying your insurance bill every month. Your insurance should not be an overwhelming burden on your budget and you should find the best ways to scrimp and save on your payments. While your insurance agent is looking to make sales, they also want to get the best deal for you in order to keep your business.

What are you best tips to save money on automobile insurance?

Jim Wang writes about personal finance at Bargaineering.com. When he's not tackling money issues, he's usually looking forward to his next vacation and writing about it at Wanderlust Journey.

Tags:: personal finance

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dennisjones699 of WI 1:54AM May 17, 2012

As an insurance agent, a couple of things this article misrepresents:
1) You can't negotiate pricing on insurance- pricing is fixed and is based on several factors including driving record, credit, age, gender, etc.- that is a little misleading. You can shop around but when you do, make sure the company is reputable and they (and more importantly your Agent) will be there when you need them in case of accident or explanation of coverages and such. You can't "drive down" prices. If you want the cheapest insurance, you can go to a sub-standard insurance carrier and you will get cheap but don't expect them to be there for you when you need them. Every company and Agent is different.
2) Get to know and be nice to your Agent. A good Agent will make an attempt to get to know you and your family as well. If you get to know them and are nice, we will look for discounts or exceptions that may take a little more work and may not necessarily apply to you but we'll go above and beyond as much as we can. Example, if you have a huge rate increase at renewal, we will see what we can do with the company to find out what happened and help adjust your rate to what it should be if there is an error or if discount falls off on accident. If you hear "It is what it is" either your Agent office doesn't care about you or you've been a high maintenance customer in the past. Don't be annoying because we won't care if you threaten to go somewhere else- we will be relieved. No amount of commission is worth daily headache from one customer, especially if you have one car with liability only coverage (but it does apply with customer with more cars as well). Remember we're people and if you have a good Agent office, we will do what we can to make you experience as good as possible and fix any mistakes that the company or we may make.
3) When you drop extensive coverage, make sure your car is old enough and with so many miles that it's no longer worth having "full coverage" on. Some people do go on too long with full coverage when they should have dropped it several years back. Also, make sure you have money of your own in the bank in case your car is stolen that you may be able to replace it out of your own pocket. If you raise deductibles, also make sure you have cash to cover the deductible comfortably in case of an accident or claim (and if you have a good relationship with a good Agent, they may be able to refer you to a body shop that will help you pay the deductible in payments or even eliminate it). There are Agents that only look out for themselves so if you don't feel comfortable with them or their office, look around and transfer even within the same company. Remember, most companies' Agents are independent contractors- it is their business so only transfer if they are not doing a good job. Transferring because of location change, may not be good for you- most everything can be done over the phone nowadays.

Rafael of IL 2:54PM December 28, 2011

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insurancebread.com of NY 10:03AM December 09, 2011