You shop around for the best deal when buying a car. Why not shop around for the best deal on auto insurance?
Car insurance can be expensive. In fact, the National Association of Insurance Commissioners reports that the average American spends around $840 a year on auto insurance.
If you live in New Jersey, New York, or Washington D.C., that average goes up to over $1,100.
Despite these high costs, not having insurance can be much more expensive. Insurance of any kind is a worthwhile investment.
If you find yourself unable to shell out $800 to $1,000 a year, it might be time to start looking into budget car insurance options.
These options still provide coverage if you are the cause or the victim of an auto accident. But they come at a fraction of the cost of traditional car insurance.
There are plenty of options out there, which can make it a bit tricky to find the one that’s right for you. Make sure that you’re getting the most out of your money by checking out these tips for saving with budget car insurance.
1. Understand That Not All Budget Car Insurance is a Good Deal
Just because it sounds like a good deal doesn’t necessarily mean that it’ll save you money. Or if it does save you money, it may not provide the coverage you need if you have an accident.
For instance, some budget car insurance plans offer a very high deductible. This means that you’ll pay less money month to month on your insurance.
A plan like this is great for a safe driver who isn’t prone to accidents or who doesn’t drive often.
But if you drive your car daily, have a history of accidents, or drive an older car, this plan will cost you more over time. That’s because when an accident does happen, your insurance provider will pay less and you’ll be left paying that high deductible.
Opting for a lower deductible will mean paying more for your insurance each month. But will help you save big if you get into an accident.
Different budget car insurance providers charge different rates for the same coverage. So be sure to shop around before you buy.
There are websites that allow you to compare insurance rates from different companies. NerdWallet and the zebra are both great resources.
2. Consider Your Coverage
Whether you’re shopping for budget car insurance or premium options, it’s always a good idea to think about how much coverage you need.
If you have a brand new car, a luxury vehicle or a sports car, it’s probably a good idea to get full coverage.
But if you have an older car, you might consider dropping your comprehensive coverage. This is the insurance that covers you if your car is damaged by a natural disaster, vandalism, etc.
When it comes time to renew your budget car insurance, consider what kind of coverage you need. Start by getting an idea of what your car is worth.
Check the Kelly Blue Book value of your vehicle. If you had an accident and your car was totaled, you’ll only receive that value. If you spent that amount on car insurance in the year before your accident, you’ve overspent.
If you could multiply the coverage on your plan by ten, and your car is worth less than that value, you may be paying for more than you need.
3. Lower Your Mileage
Many people don’t realize they can save money on car insurance by lowering their mileage.
Many budget car insurance providers offer discounts for drivers that don’t exceed a certain mileage each year.
This may not be possible for all drivers, especially if you have to drive some distance to work. Consider carpooling or taking public transportation to reduce the miles on your car. Plus, you’ll save a ton on gas!
4. Look for Discounts
Besides discounts for low yearly mileage, budget car insurance companies offer lower rates for many different things.
If you’re a high school or college student, or if you have a child who is that you’re planning to ensure, you might be eligible for a discount.
Depending on the company, you may have to show proof of good grades, usually considered a B average or higher.
Newer vehicles or ones equipped with certain safety features might be eligible for a discount. Safety features include anti-lock brakes, daytime running lights, alarm systems, and more.
If you drive an older car, you may be able to install certain features to lower your rate. Although if you’re insuring a car that you painstakingly restored, additions aren’t always an option.
Other discounts include those for members of the military, teacher discounts, and more. At the very least, most providers offer safe driving discounts if you haven’t had an accident recently.
5. Consider Combining Policies
Seeking out a budget car insurance company may save you money. But sticking with your current insurance provider may still be an option.
Many companies allow you to bundle your insurance plans, including home or renters insurance, life insurance, etc.
Before you bundle your insurance plans with your current provider, shop around. Other companies may offer better rates or greater discounts for combining.
6. Look into Adding a Tracking Device
Some insurance companies have begun offering tracking devices that they use to learn about your driving habits.
These devices are placed in your vehicle. For there, they keep track of things like acceleration, speed, distance traveled, and even the time of day that you drive.
Most of these don’t penalize you for your driving, but rather offer discounts at the end of the year. Some companies offer the chance for several hundred dollars worth of discounts for great driving.
Saving money on budget car insurance doesn’t have to be difficult. By doing a bit of research, shopping around for discounts and lower rates, and choosing bundle options, tracking devices, and more, you can rest assured that you’ve found the best rate for your vehicle and needs.
