Best Car Insurance For New Cars – Car insurance protects you financially when you drive. It’s important to make sure you’re getting the best possible deal on your policy, whether you only have basic liability insurance or full motor cover. Here are 15 strategies to save on car insurance costs.
Car insurance costs are different for each driver depending on the state they live in and their choice of insurance companies and the type of coverage they carry. The typical driver spent $1,176 on auto insurance in 2020, based on the most recent data provided by the National Association of Insurance Commissioners (NAIC). NAIC data shows premiums fell 2.4% between 2019 and 2020.
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Data from AAA shows that the average cost of car insurance for new vehicles is slightly higher, at $1,202 per year compared to 2020. The numbers are pretty close to each other, suggesting you may need to chip in around $100 per month for car insurance while budgeting for a new car purchase.
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Some things that affect car insurance rates, such as your driving history, are within your control, but costs can also be affected by state regulations and the state’s accident rate.
You may end up paying more per vehicle to insure one vehicle than insuring multiple vehicles with the same company. Insurance companies often offer what amounts to a group rate because they want your business.
Multiple drivers must generally live in the same residence and be related by blood or family. Two unrelated people can also get a discount, but they usually have to own the vehicle together.
You can expect to pay more to insure them if one of your drivers is a teenager, but you may be able to get a good student discount if their grades are a B average or better, or if they rank in the top 20% of their class. These discounts usually continue until your child reaches the age of 25. They can range from as little as 1% to 39%, so be sure to show proof to your insurance agent if your teen is a good student.
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Some companies may also provide a discount on auto insurance if you maintain other policies with them, such as homeowners insurance. Allstate offers up to a 25% discount when you bundle your homeowners and auto insurance together.
Be a safe driver. The more careful you are, the more accidents or traffic violations you will be able to avoid, and these are events that increase your insurance rates. Travelers offers safe driver discounts that may vary depending on your driving record.
Points are usually assessed per driver for traffic violations and more points can lead to higher insurance premiums.
Insurance companies sometimes provide discounts to drivers who complete an approved defensive driving course. Drivers may also be able to reduce the number of points they have on their license by taking a defensive driving or accident prevention course.
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It’s important that the effort and cost of the course translates into enough insurance savings, so be sure to ask your agent/insurance company about this discount before signing up for a class. It is also important to enroll in an accredited course. Each country has its own accreditation rules. GEICO lets you check what they are by status on its website.
Consider shopping around and comparing quotes from several companies if your policy is about to renew and the annual premium has gone up significantly. It makes sense to get quotes from other companies every year or two regardless, just in case there’s a lower rate out there.
But cheap doesn’t always mean good. The creditworthiness of the insurer must also be considered. What good is a policy if the company does not have the financial strength to pay its insurance claims? Consider checking out a site that rates the financial strength of insurance companies.
The financial strength of your company is important, but what your contract covers is also important, so make sure you understand it. The Insure.com site bases its insurance company ratings on a database compiled by Standard and Poor’s.
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The fewer miles you drive your car per year, the lower your insurance rate will be overall. Always ask about the company’s mileage thresholds.
The company will usually have you fill out a questionnaire when you sign up for car insurance. The number of miles you drive your insured car per year is one of the questions you can expect to be asked.
You’ll typically pay higher premiums if you use your vehicle to travel three hours to work each day than if you only drive one mile per day, so consider using mass transit to rack up fewer miles. But keep in mind that you’ll probably have to reduce your mileage significantly before you get a discount. Ask your insurance company about the different company mileage thresholds so that your efforts are not in vain.
A huge SUV might sound like a fun ride, but insuring a £5,000 premium vehicle can be more expensive than insuring a small but safe budget commuter car. Some insurers offer discounts if you buy a hybrid or alternative fuel vehicle. Farmers Insurance offers a 5% discount on these types of vehicles.
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You can usually choose how much of the deductible you want to pay when you choose car insurance. This is the amount of money you’ll have to pay out of pocket before the insurance picks up the tab for the balance in the event of an accident or other type of claim. Deductibles typically range from $250 to $1,000, depending on the policy. The catch is that the lower the deductible, the higher the annual premium is usually. Conversely, the higher the deductible, the lower the premium.
Ask your agent how your premium might be affected if you increase your deductible. This may better lower your annual premium by a few percentage points, or the savings may be minimal.
Raising your deductible may be a smart move if you’re reluctant to file smaller claims to avoid the risk of premium increases.
Your driving record is a big factor in determining the cost of car insurance because someone who has been in a lot of accidents can cost an insurance company a lot of money. But some insurance companies also take credit ratings into account when determining insurance premiums. Michael Barry, senior vice president and head of media relations for the Insurance Information Institute, puts it this way:
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“Many insurers use credit-based insurance scores. It’s a contentious issue in some government institutions… [but] insurers will say their studies show that if you’re responsible in your personal life, you’re less likely to file claims.”
Your credit card company or bank may offer free access to a credit score. You can also check your credit reports for free at AnnualCreditReport.com
You are unlikely to move to another state simply because it has lower car insurance rates. But the potential change in your auto insurance rate is something you’ll want to factor into your budget if you’re planning a move.
Dropping certain types of coverage can be a slippery slope because you can’t predict if and when an accident will happen. But it might make sense to opt out of collision or comprehensive coverage if you drive an older car that’s in last place,
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The insurance company will likely destroy the car if the vehicle was involved in an accident in this case. It may not make sense to buy collision coverage if the car is only worth $1,000 and the coverage will cost you $500 a year.
You may be able to lower your premiums if you install anti-theft devices. GEICO offers “potential savings” of 23% if you have an anti-theft system in your car. Your insurance company should be able to tell you specifically which devices can lower your premiums. Car alarms and LoJacks are two types of devices you may want to inquire about. Consider whether the cost of adding the device will result in significant enough savings to be worth the trouble and expense.
There may be other cost savings in addition to those mentioned here. It often makes sense to ask if there are any special discounts a company offers, such as for military personnel or employees of a particular company. You never know what kind of discount may be available for your circumstances.
Black Box Insurance is a usage-based program that may be available to you if you are a safe, low-mileage driver. Allstate’s Drivewise is one such program. You’ll get a discount just for signing up, then every six months for safe driving.
Auto Insurance Guide
You must allow your insurer to track your driving through a telemetry device installed in your car so they can assess how much you drive, when you drive and how well you drive. You may be able to save money with this type of program if you drive less than 10,000 miles per year.
You may also want to check for discounts, such as offers that allow you to pay the entire annual or six-month premium at once. Agreements to receive electronic bills and documentation can save you money, as can membership in certain organizations or groups that offer discounts.
But don’t give in for long
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