Many drivers today spend a great deal of time trying to find the perfect vehicle that combines luxury and style with features and utility that meet their functional needs. Often, the vehicle that meets your needs and sense of style comes with a high price tag, but you may be willing to pay that price for the opportunity to drive in high-class comfort. What many drivers do not consider when buying a new vehicle is that the value of the vehicle correlates to the cost of their car insurance. Many new car owners have experienced sticker shock after calling their insurance agent to add a new vehicle to their policy. While you certainly do want to fully insure your new vehicle, there are several different ways you can reduce the cost of your car insurance.
Decrease Your Coverage Many people equate decreasing car insurance coverage to increasing their risk of having to pay money out-of-pocket during an accident. With a new vehicle, you may want maximum protection from your car insurance policy, such as with comprehensive coverage. However, your existing policy may have extra coverages in place that you may not need or want. For example, many car insurance policies have an add-on for rental car reimbursement, towing service, roadside assistance and more. If you have a sufficient emergency savings account funded, these additional types of coverage may be inflating your premium cost needlessly. You can remove them for savings.
Increase Your Deductible
If you are a safe driver who rarely gets into accidents or files claims, it may be beneficial to increase your deductible amount. The deductible is only paid when you file a claim. So for those who rarely file a claim, increasing the deductible can be truly beneficial. When you increase the deductible by even a few hundred dollars, you can decrease your premium amount significantly. This premium savings equates to regular savings that you can continue to enjoy each time you pay your premium. While you may have to pay a higher deductible amount from time to time, those who rarely file a claim can benefit tremendously from regular savings on their premium.
Shop For New Coverage
Any time you make a significant change to your car insurance coverage, shopping for new car insurance rates can prove to be beneficial. Keep in mind that car insurance companies review a wide range of factors when determining your rate. One of the most significant factors is the vehicle you drive, so a change to the vehicle being insured warrants shopping for new rates. Other factors that affect car insurance rates include your age, your gender, your driving history, where you live, your credit rating and more. Insurance companies place different rate on these various factors when calculating insurance rates, so you may find savings by shopping around for new coverage.
Use Discounts
Another way you may be able to save money on car insurance for your new vehicle is to take advantage of various discounts offered by different car insurance companies. You may be aware that most car insurance companies offer a wide range of discounts to drivers. However, you may not be aware that these discounts can vary significantly. For example, one company may offer a multiple policy discount for bundling your homeowner’s and car insurance policies with the same company. Another insurance company, however, may offer greater flexibility with this discount. Rather than only being open to those that bundle a homeowner’s policy with a car insurance policy, the discount may also be enjoyed with a renter’s policy or a life insurance policy in combination with a car insurance policy. By understanding the different requirements insurance companies each have for their requirements, you may be able to put more of these discounts to use.
Watch Your Credit Scores
While a handful of car insurance companies do not take your credit rating into consideration to determine your car insurance rates, most car insurance companies do. They offer lower rates to those drivers who have a good to excellent credit rating, while those who have a poor credit rating may pay up to 50 percent higher rates. The savings available to you by improving your credit rating can be significant. You can obtain a free copy of your credit report from the three credit bureaus today to review your rating. Take steps to reduce debt and pay monthly obligations on time to improve your credit rating. Car insurance can be expensive for any driver, but it generally is more expensive for those drivers who have chosen to purchase a luxury or expensive vehicle. These steps can be followed to reduce the cost of car insurance for all drivers, including those who are insuring an expensive ride.
Author Bio: This is an article by Chris Pentago from RealInsurance CarInsurance
References: https://www.moneysmart.gov.au/managing-my-money/insurance/car-insurance