How to Save on Car Insurance

Whenever I see something about saving on car insurance it reminds me of a certain US car insurance company. I guess that means they are good marketers!

I have discussed before how expensive my car is to drive. It used to be much more expensive, because I got into a small fender bender when I had just turned 20 that happened to be my fault (or, rather, that was completely preventable by the other person but that I took the blame for).

That spiked my insurance costs, meaning it was almost $300/month for insurance. That was clearly a bank breaker, but now that I have gone more than a few years accident free, my rate is more manageable.

Besides the accident free zone, there are a few things that I've done that have had a positive impact on decreasing my insurance costs:

Driving Safely (of course)

Despite so many people clearly thinking they are good, safe drivers, most people aren't. We all have our moments, but the best way to keep your insurance down is by being safe and avoiding accidents.

Remember that next time you are getting all road-ragey or impatient. Following too close, not signalling - these are behaviours that are always going to be YOUR fault, and will increase your insurance costs.

Comparison Shop

Car insurance companies all have different pricing structures, so comparison shopping is important if you want to save.

Don't always go for the cheapest auto insurance, though. That's dangerous. Different coverage works for different people, so keep in mind where you live and work, your commonly travelled routes and the reasons you most often use your vehicle. The cheapest insurance is only the cheapest when you don't have to make a claim.

Pre-Pay for a Term

I'm embarrassed, as a personal finance blogger, to admit this. When I was renewing my insurance in April, the insurance agent asked me what term I wanted to renew for. I wanted to leave my money in my investment savings account to collect interest so I told her three months.

The agent then told me that it's an extra $60 for any term under 6 months. I had been unknowingly paying this extra amount for years, until she told me this.

Now I renew for a minimum of 6 months. $60 every three months is a lot of money.

 

Sometimes, figuring out how to save on car insurance can be difficult, and lots of the advice includes getting rid of your car (not an option for many). That is definitely the most effective way, but there are also ways to save a bit here and there.

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