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How to Reduce Your Car Insurance Rate
November 30, 2013
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When you purchase a car, you typically look at the sticker price and figure out what your monthly payment would be, but many of us forget how expensive a car is when you factor in the total cost of ownership. In addition to the car payments, it’s easy to rack up thousands of dollars each year in fuel costs, oil changes, repairs and registration fees.  Then there’s auto insurance, a legal requirement for all drivers that comes with varying costs depending upon the driver’s record, type of car and other factors.

Fortunately, there are many ways to save money on car insurance.  Most auto insurers offer a wide range of discounts and have policies that can help significantly reduce premiums, so you can be protected on the road without it costing a fortune.  You just need to know where to look.

Here are ten tips to help save money on your auto insurance:

  1. Don’t get into an accident – An obvious statement, but if you get into a car accident, you may lose your good driver discount and your premiums will likely increase.  Take proper precautions to reduce your risk.  Slow down.  Obey traffic laws.  Avoid distracted driving…and you can even take that one step further by signing the Mercury Insurance Pledge to not text while driving. Actions like these will reduce your risk of a collision, and more importantly, keep you safer on the road.
  2. Skip the monthly billing – Paying your premium in monthly installments may seem like a good idea, but it’s usually more expensive than paying in full every six or 12 months. You can often save money by paying your bill all at once. If you can’t afford to pay your bill in full, look at using EFT automatic withdrawal. Many companies will waive installment fees or charge a lower fee for EFT.
  3. Combine your policies – A multi-policy discount is often offered to customers who insure their home and car with the same company.  This could save you a few hundred dollars. For example, Mercury offers up to a 15% discount to customers who bundle their auto and home policies.
  4. Think about insurance before buying your next car – When it comes to auto insurance, not all vehicles are created equally.  A luxury sports car, for example, will cost more to insure than a standard four-door sedan. Check out Mercury’s list of most inexpensive vehicles to insure in California if you need a place to start.
  5. Add safety features – Anti-lock brakes, crash-alert systems and alarm systems are examples of safety features that can help you qualify for a discount from your insurance provider.
  6. Professional organization – Individuals in certain professions, such as education and engineering; or professional groups, such as members of university alumni associations, medical or bar associations, may qualify you for a group discount from their insurer.
  7. Multi-car discount – You can qualify for a multi-car discount if your household owns or leases more than one car and insures them under the same policy.
  8. Drive less – Carpool. Bike. Use public transportation.  Do anything you can to reduce the amount you drive.  Insurance companies commonly look at the number of miles you drive when determining premiums.  Plus, when you drive less your risk of getting into an accident will also go down…and this will help qualify you for the good driver discount.
  9. Maintain good grades – Young drivers typically pay more for insurance, however, some insurance companies, like Mercury, offer a good student discount to high school and college students maintaining a 3.0 GPA or higher.
  10. Deductibles – Selecting higher deductibles can save you a lot of money if you feel comfortable with a little extra risk. For example, if you choose a $1,000 deductible instead of $500 then it can save you quite a bit. The tradeoff for this savings is that you would be responsible for the first $1,000 of repair costs in the event you have a covered claim, so you’ll have to consider whether or not you are comfortable with paying more out of pocket if you have an accident.

Follow these simple tips and it may put a few dollars back in your pocket without sacrificing any of your coverage needs.

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