According to the AAA, the average American has to shell out around $9,000 just to drive around in their own car every year. That sum might seem like a lot but with the average cost of car insurance sitting at $1,555 and gas along with annual maintenance and repair costs crossing the $3,000 mark every year, one can see how things can quickly add up.
Fortunately, there are ways to slash your car insurance costs in half just by paying more attention every year.
Here are five ways to trim your car insurance bill this year:
By just shopping around for the best car insurance rate could bring you annual savings of around $700 or more. You can get amazing discounts at smaller insurers nobody has heard of. So, don’t let yourself be swayed by Big Insurance’s commercials, and don’t be afraid of exploring uncharted territory. Getting out of your comfort zone could trim your car insurance bill in half.
Also, make sure that you shop around for the lowest rate every year. Big life milestones such as turning 25, getting married, or buying a home, could bring you consistent discounts with certain insurance carriers.
Ask for a Discount
Dare to contact your car insurer and ask for a discount. You are eligible for a discount if you pay your bills on time, you bundle auto insurance with homeowners insurance or other policies, your driving record is spotless, you insure multiple cars, you are willing to pay the entire premium in one go, or you’re part of an affiliate group or professional organization. Just like with car insurance rates, shop around for the best discounts. Contact multiple insurers and compare their discount offers before making the final decision.
Know Insurance Costs BEFORE Buying A New Car
Price, fuel efficiency, and maintenance costs are not the only factors you should be taking into consideration when buying a new car. Insurance premiums can quickly add up, so check them out before investing in a new vehicle. According to Insure.com, in 2020, the cheapest cars to insure are Mazda CX-3 Sport ($1,324 per year), Honda CR-V LX ($1,333), and Jeep Wrangler JL Sport S ($1,334).
These average premiums may vary from one year to the next, so make sure that you do your research before investing in a car your family can barely afford in the long run.
Switch to Pay-Per-Mile Insurance
If you use your car just for grocery shopping or getting the kids to school, a pay-per-mile car insurance could mean impressive savings. Unlike traditional car insurance, a pay-per-mile policy will charge you based on the number of miles you rack up every month. A single mile usually costs a few cents, but just like regular car insurance, the pay-per-mile insurance comes with a fixed monthly rate that depends on vehicle model, driving history, and state of residence.
On the other hand, pay-per-mile is not for everyone. If you drive around a lot, you could end up paying more than you would with a traditional insurance policy. Calculate how many miles you drive per month and per year before making the switch. For instance, if you drive, let’s say, 300 miles every month with a fixed rate of $30 per month and a 4 cent-per-mile rate, car insurance will cost you around $40 per month or slightly over $500 per year.
But if your mileage is more than 12,000 miles per year (or over 1,000 miles per month), pay-per-mile may not be for you. And if privacy is an issue for you, a downside of this insurance policy is the wireless monitoring device you’ll have to agree to be installed in your car by the insurance company to keep track of the miles you drive.
Keep Your Driving Record Squeaky Clean
A flawless driving record will guarantee lower premium rates and unexpected discounts with most car insurers. While some insurance companies might request a squeaky-clean driving record for you to access their best offers and discounts, others may let minor traffic mishaps slide.
But if you were involved in a car crash, it is best to consult a car accident lawyer BEFORE talking to an insurance adjuster. A law professional will best know how to properly negotiate with your insurance company reps, and how to prevent a sketchy insurance-claims investigation from leaving an unsightly mark on your driving record.
To Sum Up
Picking auto insurance doesn’t have to be a take-it-or-leave-it decision as we have been conditioned to believe. There are many things you can do to lower your rates or to get access to discounts you haven’t even dreamed of.
Just stay vigilant and embrace a proactive mindset. Getting out of your comfort zone could help you save like crazy on auto insurance every year.