My Car Insurance – How I Save a Fortune

I wanted to reduce my car insurance premiums, so I asked staff writer Crystal at Budgeting in the Fun Stuff to write this post. Crystal also writes about finding the balance between paying your bills, saving for your future and budgeting in the fun stuff along the way.

Every time my car insurance is up for renewal, I see an extra $1 or $2 a month added to my rate for no discernible reason. If you also notice your car insurance rates creeping up every year, you can use the following suggestions to save yourself some cash.

My Car Insurance Tip #1 – Drive Less

Driving less actually saves you money on gas and car insurance. Insurance agencies charge drivers based on the number of miles that they drive on average per year. Drivers who put a lot of miles on their cars have higher rates because they are seen as greater insurance risks. You can usually qualify for low mileage discounts by keeping your mileage to below 12,000 – 15,000 miles per year.

I understand that your daily commute may take this option out of play, but it could be something you consider when choosing which car to use for all of the weekly errands or family vacations. In other words, if you know one car is going to go over the limit, pile the miles on that car. Use it for everything. Try to use the other car as little as possible.

My Car Insurance Tip #2 – Group Discount

Group discounts make it possible for their members to save money on their daily driving. Membership organizations like AARP are able to get lower pricing for their members by pooling them all into one general fund. Check to see if your employer offers a group plan or if you are eligible for a private group’s insurance discounts. AAA members can look into special rates as well.

If you are a small business owner, you might be able to create a group discount and save money for yourself as well as the people working for you. If you have a business insurance agent, ask her if she can help.

My Car Insurance Tip #3 – Teen Education

Insurance is priced the highest for drivers who are under 25, so having teen drivers ends up being one of the biggest things that raises the price of car insurance for a household. Teach kids about money by teaching them how to drive safely. Two birds with one stone!

But you can significantly lower your insurance rates if your teen driver keeps a clean record along with the other members of your household. I would suggest that every driver in the household take a defensive driving course every three years to earn you the maximum discount. Also, find out if your insurance company offers discounts for teens based on good grades.

As an alternative, consider waiting two years to have your child test for the driver’s license. That delay will save you some serious money. Your teenager won’t be a big fan of this idea but who cares? If you’re paying the bills, you get veto power.

My Car Insurance Tip #4 – Safety Options

Safety options like automatic seat belts have been proven to decrease the amount of injuries that occur in an accident. And decreased injuries means less money that the insurance company has to pay out.

That is why insurance companies look favorably on individuals who buy and lease cars with safety features. Having airbags, anti-lock brakes, an alarm system and daytime running lights can go a long way towards lowering your car insurance rates.

My Car Insurance Tip #5 – Shop Around

As I mentioned before, our car insurance rates seem to creep up every six months despite the fact that my driving record is completely clean and my husband’s last accident was more than seven years ago.

The best money-saving advice I can give is to shop around for the best rates at least once every year or two. I have kept our monthly insurance payment within the same $10 range for the last five years by simply switching companies any time I find the better rate or getting my current company to match the better rate that I found.

Hopefully we can all avoid paying more than necessary for car insurance by following the suggestions above.

Can you think of any other great car insurance tips?

Neal’s two cents: I also shop insurance every year. But when I do, I also make sure I have the right coverage. I saved a ton of dough when I re-evaluated our deductibles.