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As car insurance rates rise faster than anything else in the economy, drivers need to be sure that they are still properly protected without breaking the bank.
Your car insurance rate is highly personalized and depends on the make, model, and year of your car as well as factors such as your age, location, and driving history. With so much to consider, checking all the boxes to be sure you are not overpaying can feel daunting. The good news is we are here to help. Below, we have compiled a list of 5 simple steps you can take to save money on car insurance.
The vehicle you want to insure plays a major role in determining what you will pay for car insurance. According to Rate Retriever’s quarterly car insurance rates report, the popular car make with the cheapest car insurance rates is Subaru with an estimated annual premium of $1,870, 18% cheaper than the average vehicle.
Some cars, such as those belonging to a luxury brand, are more expensive to insure because of higher costs for repairs and replacement parts. If you are driving a car with higher repair and replacement costs, car insurance companies will likely assign you pricier rates to cover these costs if you ever need to file a claim. This is why your premium may be more expensive with higher end brands than with more modest vehicles.
Additionally, older vehicles and SUVs, minivans, and trucks tend to be less expensive to insure than new vehicles or types of vehicles like sports cars.
If you are in the market for a new car, taking this into consideration before you buy can help to save you money on car insurance in the long run.
Your deductible determines how much out of pocket costs you will be responsible for if you file a car insurance claim. Generally, a higher deductible means that your annual car insurance premium will be lower because you would be taking on more financial responsibility if and when you file a claim.
Increasing your deductible is a solid way to control your car insurance costs, but it is important to keep in mind that doing this will result in you paying more out of pocket if you are in a covered accident, so this might not be the best option for everyone.
In most states, car insurance companies are allowed to take your credit score into account when determining your annual premium. With the exception of drivers in Hawaii, California, and Massachusetts – where credit rating is not a factor in car insurance costs – working to improve your credit score is a fairly simple way to lower your car insurance premium.
According to Rate Retriever’s report, drivers with a good credit rating pay an average of 84% less for car insurance than those with poor credit and 23% less than those with fair credit scores. Additionally, if you are able to maintain an excellent credit rating, you could save even more, paying an average of 17% less for car insurance than those with good credit.
Most insurance companies offer consumers the option to combine their renters or homeowners insurance and their auto insurance under one policy, and doing this may get you a discount on both. In addition to lower premiums, bundling can save you the headache of having to manage multiple different insurance companies at the same time.
Remember that insurance rates are different for everybody, and bundling may not be the cheapest option for you. Be sure to do your own research with your chosen insurance company to learn more about your options.
The easiest way to be sure you are not overpaying for your car insurance is to compare rates from multiple different companies to find which one is the best fit for you. Your car insurance rate will look different depending on multiple factors, and each insurance company will be priced differently.
Take our quick quiz to compare car insurance companies available in your area and find the cheapest rate.