10 Lesser-Known Ways of Reducing Auto Insurance Costs

Majority of motorists know most common ways of reducing car insurance costs. You can save when you have good driving history with no claim, cheap to insure cars, a garage to park safely, cheaper zip codes and many other ways. Most policyholders are probably bored to read about these savings no matter how effective they are. Besides, you may already have most of those discounts and still feel that you are paying too much.

However, there are a few other methods of bringing the cost of insuring vehicles down. Here are ten lesser known ways of reducing auto insurance costs.

  1. Paying Off Cards to Increase Credit Score

When you pay off your credit card debt you start saving on the interest immediately. Did you know that paying off debt and having large unused credit facility increase your credit score and that affect your car insurance rates. Today, nearly all vehicle insurers look at credit score of their policyholders and new applicants. Some companies offer as much as 25% premium discounts to drivers with great credit score.

  1. Paying Off Car Loans

It is understandable that people need auto loans. However they may be keeping them far too long. Did you know that you may be paying too much insurance premium because of a small car loan which you can easily pay off? When you set up the loan the provider would have required additional covers like GAP insurance and place an upper limit to deductibles. When you pay the loan off you can pick whatever coverage you want.

  1. Unnecessary Medical Coverage

The rule is that you can only be paid by one insurance policy for the damages. If you and your family already have health insurance from another provider you may not need to buy medical coverage with your automobile insurance. This is something people buy without realizing.

  1. Excluding Drivers Voluntarily

In some cases excluding drivers from an insurance policy may be allowed and you can save a lot of money especially when you exclude a teen or high risk driver. However, this may not be up to your choice depending on where you live and which company insures you. Generally you may be able to exclude a driver whose license is suspended. Furthermore, you may be able to exclude drivers who have their own vehicles and insurance coverage.

Another alternative that qualifies you for further savings is to limit occasional drivers. Those are the ones who don’t live with you but sometimes may drive your car. Commonly companies can offer cheaper policies by limiting the allowable drivers to over 25 year-olds only. Policyholders should check their policies for any such conditions and make sure that only allowed drivers can drive the insured automobile.

  1. Avoiding Automatic Renewals

Most auto insurers encourage their policyholders to set up automatic renewal and payment option. This may be a good solution to ensure policies are renewed. However, people get relaxed knowing their policies will be renewed if they don’t do anything. As a result they don’t bother checking for alternative quotes and finding a better deal. If you don’t look for ways to reduce your car insurance cost how are you supposed to find them?

Also, some companies may be taking advantage of customer loyalty and not offering them as good rates as their new customers. There are many studies showing that policyholders who don’t shop around lose out on great deals. You should always shop around at renewal regardless of setting up automatic renewal or not. If you don’t use this opportunity you may have to pay cancellation charges for switching inside the policy term.

  1. Don’t Forget Low Mileage Savings

If you are not driving as much as the national average you shouldn’t pay as much as an average driver. It is up to you to figure out your yearly mileage and request the discounts accordingly. Many motorists in large cities keep cars for occasional use. They go to work using public transportation. You may be driving less when you are working from home or retired as well.

  1. Don’t Ignore Telematics

Another option ignored by many motorists is Pay As You Drive Insurance. They can be a great solution when your rates increased because of recent accidents and traffic violation citations. Also, young drivers can benefit from these policies. It is a great way of showing that you are a good driver. The company can see your driving in real time thanks to a little device inserted into vehicle’s on-board monitoring systems.

  1. Buy Independent Roadside Recovery Coverage

Independent roadside recovery plans have many advantages as compared to the ones provided by insurance companies. These plans are generally priced reasonably that beg motorists to buy them. Who are you going to call when you have a breakdown in the middle of nowhere? Furthermore, you can save a lot more money than you paid these companies by discounts qualified. Many companies offer up to 10% discounts with AAA and similar companies’ breakdown coverage.

  1. Educational and Professional Discounts

A few companies offer further savings based on applicants’ profession and education. For example, GEICO offers discounts to members of over 250 professional organizations and associations. Other companies offer similar discounts. In addition, many companies consider the educational qualifications of their applicants. And some insurers offer special discounts to graduates of certain universities.

    10. Full Payment Savings

When you pay the premium in full you avoid paying instalment set up and interest charges. Nearly every company offers facilities to spread the premium but most of them charge for it. Nobody offers anything for free these days and insurance companies will certainly not let you pay later without getting something out of it. Therefore you should always check the costs when you pay in full and in instalment. Furthermore, some companies offer additional discounts when you pay in full.

You can see that there are a few ways of reducing car insurance costs on top of the traditional methods. Sometimes, getting the discounts may be easier or quicker than the traditional ways. You can find out these quick ways by reading our post on how to lower car insurance rates.

Share on Pinterest
There are no images.