If you’re like most drivers, you’d probably jump at the chance to reduce your monthly premiums. Auto insurance can cost you a small fortune in the long run, but with so many companies claiming to offer low cost insurance rates, it’s not easy to find the best deal for your particular situation.
The truth is that each car insurance company takes a different approach to calculating monthly premiums, and each caters to a slightly different audience. The best fit for your particular needs really depends on your driver profile.
There are dozens of factors that insurance providers consider when determining car insurance rates. You can expect the following questions to have a major influence on your monthly premiums:
- Have you been involved in a recent car accident?
- Have you received a recent traffic citation?
- Have you been convicted of a recent DUI or DWI?
- How many miles do you commute each year?
- What vehicle do you drive?
- How old are you?
- At what age did you receive your driver’s license?
Now that you know the main factors that will determine your car insurance rates, let’s examine a few strategies to help you reduce your monthly premiums:
1. Maintain a Clean Driving Record For Several Consecutive Years
This is perhaps the most effective way to get your monthly premiums reduced. If you are convicted of DUI, cited for a traffic infraction, or involved in a collision, your insurance provider will see you as a greater liability. This typically translates into higher insurance premiums.
Maintaining a clean driving record is one of the most effective ways to get your auto insurance rates reduced.
Here are a few tips to help you maintain a clean driving record:
- Follow all traffic laws;
- Never drive under the influence of drugs or alcohol;
- Limit the amount of time you spend behind the wheel—spending less time on the road will reduce your risk of crashing or being cited for a traffic offense; and
- Maintain your vehicle to reduce your risk of crashing.
2. Reduce Your Annual Mileage
If you’ve ever compared car insurance quotes, chances are you were asked about your annual mileage. It goes without saying that spending more time behind the wheel increases your risk of crashing, which means high-mileage drivers are a greater liability than low-mileage drivers to auto insurance companies. As such, you may be able to get your premiums reduced by limiting your annual mileage.
3. Consider Switching Auto Insurance Providers
Each auto insurance company takes a different approach to calculating premiums, which is why the quotes you get from one carrier might be very different from another. And over time, the company that offers the cheapest car insurance for your particular situation will change.
Although it’s tempting to stay with the same carrier, consider getting quotes from other providers before you renew. This is especially important if you noticed a major increase in your rates after an accident or a DUI conviction.
4. Purchase A Vehicle That Is Cheap To Insure
The year, make, and model of your vehicle can have a profound impact on your auto insurance rates. This is because different vehicles have varying rates of accidents and theft, which means one vehicle might be more of a liability to insure than the next.
Try to find a vehicle that is rarely involved in accidents or claims. The cheapest cars to insure tend to be those with less horsepower since they are less likely to be involved in speed-related collisions.
5. Opt For Less Car Insurance Coverage
Although opting for less insurance coverage would certainly reduce your premiums, it is important that you do so with caution. All it takes is a moment’s distraction or a single hazard to cause an accident, and if you are found to be at fault (or if the at fault driver is uninsured), you might wind up in overwhelming debt if your insurance coverage is insufficient. It’s usually a good idea to purchase liability coverage that exceeds your state’s minimum limits and to add uninsured motorist coverage that matches the limits of your liability coverage.
Even if these tips only save you a few dollars on car insurance each month, that small reduction could add up to major savings over time. If your policy is about to renew, consider using these five tips to open up some room in your monthly budget.