How To Lower Your Car Insurance Costs

Sometimes it feels like insurance companies attach a vacuum cleaner to your wallet. Car insurance premiums never end, they tend to rise over time, and sometimes it’s a racket trying to get a claim processed when you do need to get something repaired. It shouldn’t be this way – and it doesn’t have to be. Fortunately, you don’t have to shell out a lot of money for good coverage.

Consolidate Coverages

Lots of insurance companies offer discounts for consolidating insurance coverages. While a lot of  people do try to do this, it’s still something that’s glossed over by many others. It’s more than just consolidating your homeowner’s and auto policies. Ask about life insurance, health insurance (if you don’t already have coverage through your employer) and other types of insurance you carry.

Work On Your Credit

Your credit rating makes a huge difference in your premium rates. For many insurers, credit is a critical factor. Why? Because, while insurers don’t fully understand the reasons, good credit is associated with lower accident risk. One idea is that people with good credit are financially responsible, and thus responsible people in general.

Another theory is that a person with a high credit score isn’t as likely to economize. They won’t skimp on getting new tires when they need to be changed, they may own two or more vehicles, they tend to have one high paying job instead of two part time jobs.

Because of this, they tend to put fewer miles on their vehicle. Fewer miles means fewer accidents, all other things being equal. By contrast, people with lower credit scores may skimp on regular maintenance because they can’t afford it – sometimes this lack of maintenance results in a car accident (i.e. a blown tire due to excessively worn tires that were not replaced regularly).

How do you get good credit? By paying down debt, maintaining a favorable debt to income ratio, becoming more responsible with your money – in short, you must become better off, financially.

Ditch Collision Coverage

Collision insurance is often necessary on a new vehicle. However, it’s not always necessary on vehicles that are at least 5 years old. Why? Because insurance adjusters rarely fix cars where the damage exceeds 50 percent of the salvage value.

Remember, your vehicle is depreciating every year whether you want it to or not. If you’re in an accident, your car may only be worth $5,000. If the damage to a bumper or door skin requires $2,500 worth of work (which is easy to rack up at a body shop), the insurance company will just write off your vehicle.

You’d be better off dropping collision coverage, and putting the difference into your savings account.

Install A Theft Deterrent System

Theft deterrent systems are an easy win for you – they reliably and predictably reduce premiums on your auto insurance policy. The reason is simple: a protected vehicle is a safer one. While the theft deterrent system costs money, it may be less than you think. Analyze the cost of a new alarm system for your vehicle and compare it against the amount of money you’ll save over the life of your vehicle. If the numbers make sense, have the alarm system installed.

Etch Your VIN In Your Glass

Another way to reduce insurance premiums is to have the VIN number etched into the glass. In a semi-famous 3-year study, Kentucky state police had 125,000 vehicles VIN etched. At the end of each year, the number of vehicles stolen should have been 800, based on local crime statistics. However, only four of the VIN-etched vehicles were stolen. Insurers took notice. VIN etching works – and it reduces your premiums.

About The Author

Gillian Kearney is a car insurance consultant. She enjoys sharing her information online. Visit the www.monkey.co.uk link for more cost saving ideas.