10 Lesser-Known Ways of Reducing Auto Insurance Costs

Only a few motorists are aware there are many hidden ways of lowering car insurance premiums. Payment option you choose or the source you buy your policy can give you easy discounts. It may take time to qualify for good driver or no claim savings and you may not have the most insurance friendly automobile or live in a safe zip code. In the meantime, you can enjoy these lesser-known discounts available to anybody who is aware of their existence and line themselves up for them.

There is no doubt policyholders should try their best to get the most influential saving opportunities like having a clean driving history or owning a low-risk auto. But most policyholders probably know about them already. Here are 10 lesser-known methods of bringing the cost of insuring vehicles down.

  1. Paying Off Cards to Increase Credit Score

When you clear off a credit card debt you start saving on the interest immediately. Did you know that clearing debt and having a large unused credit facility increase the score and that affects vehicle insurance rates. Today, nearly all carriers look at the credit score of applicants. You can get as much as 25% off the premium with a great score. That is why it is worth making an effort to improve the financial standing.

  1. Paying Off Auto Loans

It is understandable that people need loans. However they may be keeping them far too long. Did you know that you may be paying too high a premium because of a small car loan, which you may be able to easily discharge? When you set up the loan the lender would have required additional covers like GAP and place an upper limit to deductibles as well as insisting on full coverage. When you close the loan off you can pick or drop whatever vehicle insurance coverage you want.

  1. Unnecessary Medical Coverage

The rule is that you can only be paid by one policy for the damages. If you and family already have health insurance that includes accident injuries you may not need to buy medical coverage again. This is something people purchase without realizing.

  1. Excluding Drivers Voluntarily

In some cases excluding people from a 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 choice depending on where you live and providers. Generally you may be able to exclude someone whose license is suspended and people who have their own vehicles and insurance even though they are considered a member of the household.

Another alternative that qualifies you for further discounts is to limit occasional drivers. Those are the ones who don’t live with you but sometimes may use your car. Commonly companies can offer cheaper prices by limiting the permitted drivers to over 25 year-olds only. Owners should check for any such condition and make sure that only permitted people get the keys to the vehicle.

  1. Avoiding Automatic Renewals

Most auto insurers encourage policyholders to set up automatic renewal and payment options. This may be a good solution to ensure they are renewed. However, people get relaxed knowing that it is all set up and they don’t have to look for alternative quotes. As a result they don’t bother getting quotations and finding a better deal. If you ignore such an easy way of cutting automobile insurance costs you shouldn’t expect to enjoy low rates?

Also, some of them may be taking advantage of customer loyalty and not offering them as good rates as 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 renewals regardless. If you don’t use this opportunity you may have to pay cancellation charges for switching within the term.

  1. Don’t Forget Low Mileage Savings

If you are not traveling as much as the national average you shouldn’t spend as much as an average driver on car insurance. It is up to you to figure out yearly mileage and request that it is taken into account accordingly. Many motorists in large cities keep cars for occasional use. They go to work using public transportation. You may be traveling 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. They can be a great solution when prices increase because of recent accidents and traffic violation citations. Also, youngsters can benefit from these policies a lot more than the others. It is a great way of showing that you are careful. The company can see your driving in real time thanks to a little device inserted into the vehicle’s on-board monitoring systems. So, you are charged based on real information rather than getting bundled into a high risk category.

  1. Buy Independent Roadside Recovery Coverage

Independent roadside recovery plans have many advantages as compared to the ones provided by an auto insurer. 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, people can save up to 10% on premiums with AAA or similar breakdown services. It is probably more than the membership fees. Most importantly, some carriers can monitor the roadside assistance calls when you purchase the service from them and hike the premium if there are a few calls. So, you would be avoiding this surcharge too by going independent.

  1. Educational and Professional Discounts

A few companies take applicants’ profession and education into account and price accordingly. For example, GEICO offers special deals to members of over 500 professional organizations and associations. Others have similar deals too. In addition, many underwriters consider the educational qualifications of applicants and some offer special prices to graduates of certain universities.

    10. Full Payment Savings

When you pay the premium in full you avoid instalment set up and interest charges and get about a 9% auto insurance discount for it. Nearly all of them offer facilities to spread it but most of them charge for it. Nobody gives anything for free these days and they will certainly not let you pay later without getting something out of it. Therefore you should always check the costs when you are considering instalments.

You can see that there are a few hidden 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. So, don’t be complacent and end up spending a lot more than you really should. If you are qualifying for them but not making the effort to actually make them count is a waste.