Revisiting Car Insurance Costs: 5 Ways to Save

by TTMK on January 10, 2013 · 10 comments

Most of us drive a car.  It’s simply necessary for the majority of us not living in the heart of a city with subways and regular bus routes.  Walking everywhere, or biking for that matter, simply isn’t feasible for a large percentage of people.

So cars are a good thing! Of course, as we all know, we can’t get something for nothing – or at least in the vast majority of situations.  With all of the benefits of a car come a variety of costs: the car itself, gas, repairs, maintenance, and other expenses. One of those “other” expenses can actually be quite significant: car insurance.

Given that we need car insurance, and it’s a necessary expenditure, it’s smart to shop for a good deal and get good rates. Along those lines, it’s time to revisit a topic most have us thought about, to make sure we’re really doing what we can to get a good deal when it comes to car insurance.  Here are 5 ways we can spend less on car insurance:

  1. Actually look for the best rates.  Prices can vary, based on who you’re asking, and when you’re asking.  It’s best to make the basic effort to do some comparison shop.  Over time, just a little bit of money saved on each payment could add up to a more substantial amount of money.
  2. Increase deductibles. This is the amount of money that you are on the hook for out-of-pocket, before the insurance company starts paying.  If you raise the deductible, your premium payments can decrease at the same time.  Of course, the key here is to avoid accidents very carefull, as this is where the strategy could potentially backfire.
  3. Consider multi-car discounts.  If you have more than one car in your household, you could save money by insuring them with same company and getting a multi-car discount – thus lowering the average cost per car.  You and your spouse could be teaming to save each other money!
  4. Be safe. Obviously, being safe is important for much more than monetary reasons.  This being said, driving safely can keep your rates lower.  Plus, if you get in an accident, paying that deductible won’t be fun!
  5. Bundle policies.  It’s not like auto insurance is going to be the only kind of insurance you get.  What about homeowner’s insurance? Or, renter’s insurance, if you don’t own your own place? This is where multi-line discounts can potentially save some money.

The big thing is, instead of putting this on auto-pilot and forgetting about it, it’s good to periodically revisit and at least think about it.  You never know, you just might be able to save money by making a change!

When is the last time you looked for lower car insurance rates? What has been your approach to saving money on auto insurance?

{ 10 comments… read them below or add one }

The College Investor January 10, 2013 at 6:31 pm

I was surprised at how much bundling policies saved me. My insurance agent told me I should get a renters policy at the cheapest level – $4 per month, because the bundle savings would take $20 off my car insurance, for a net savings of $16 per month!

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TTMK January 11, 2013 at 10:24 pm

Robert – that seems like a good deal, spend $4, get $20. It’s like an instant, super high ROI!

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AverageJoe January 11, 2013 at 10:56 am

I’ve also found savings checking through my credit union. For some reason, I receive a credit union discount on my auto policy that was unbelievable.

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TTMK January 11, 2013 at 10:26 pm

Average Joe – It’s interesting an eye opening how many people sing the praises of some credit union benefits. Good stuff.

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Christopher @ This that and the MBA January 11, 2013 at 12:44 pm

I changed my coverage. My mom gave me an older car and i dropped collision insurance. No need to keep collision on a car that is not worth much.

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TTMK January 11, 2013 at 10:27 pm

Christopher – that makes sense if a car is older and not worth so much. Why pay extra in that case, right?

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Ted Jenkin @ Your Smart Money Moves January 16, 2013 at 12:03 pm

Great tips! Do not forget you can always…

Downgrade your choice of car.
New cars and top-of-the-line models typically cost more to insure than used cars and lower-end models. In addition, cars are rated on a risk scale for insurance purposes. Sports cars and other high-performance vehicles are higher risks because they are popular targets for thieves and vandals and typically cost a lot to repair. Also, statistics show that people who own flashy cars tend to drive more recklessly. Other types of cars may be considered safety risks (e.g., if they’re prone to rollovers). So if you’re in the market for a car, remember that you can save on insurance by purchasing a low-risk or less expensive vehicle.

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TTMK January 16, 2013 at 8:52 pm

Ted – good point on downgrading the choice of car. Generally a smart move overall to drive based on true need rather that imaginary needs for new luxury/sports cars 🙂

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