Being a fairly thrifty guy, I try and stretch my dollars as far as they can go. When setting up our family budget, I thought we were spending a bit too much on auto insurance rates. Here are my top 10 tips to save on auto insurance:
Tips To Save On Auto Insurance
- Shop around – My first step to save on auto insurance was to obtain a couple of free online insurance quotes, as well as an over the phone quote from a local insurance agency. As it turned out, my existing premiums were still competitive in the market, so I needed to dig deeper.
- Multiple vehicles – Having multiple vehicles under the same insurer can save you 10% or more on auto insurance.
- Bundle other policies – Better yet, insure your home with the same company and save up to 10%.
- Increase your deductibles – Increasing your deductibles by $250-$500 can reduce your collision and comprehensive costs by 15%-30%. The trade-off is that you are required to pay more for small claims.
- Self-Insure the small risks – By increasing your deductibles you avoid unnecessary coverage, and since small claims increase your premiums anyways, filing fewer claims will reduce the chance of your premiums rising in the future Besides, if you are an above average driver, the savings in premiums should more than pay for your claims over time.
- Avoid Collision on older cars – Collision coverage protects damage to your own vehicle, but if your car is worth $2,000 or less, are you really going to salvage it after a major wreck?
- Low mileage discount – This may not apply to many people, but I live less than 10 km away from work, and since that is my major daily commute, the insurance companies offer a discount for low mileage drivers. This can also apply for your secondary vehicle that perhaps doesn’t get out on the road as often.
- Good driving record – Being accident and ticket free over the past 10 years has saved me between 5%-20% on my premiums. Savings kick-in after 3 accident and ticket free years
- Value of Car – Expensive cars cost more to repair and therefore cost more to insure. Check the insurance rates before you decide to purchase a car.
- Pre-Pay your insurance – Most insurance companies will charge you up to 3% to set-up a monthly payment plan. Avoid this by pre-paying your insurance at the start of the year.
Just by going through these steps again with the insurance company earlier this year, I managed to save $360 off our annual premiums. We now pay less than $1150 to insure two vehicles.
Do you have any money saving tips to save on auto insurance?
Good list! Also ask for reduced premiums because you’re a healthcare worker, you belong to a professional association, you’re a recent grad or you’re an university alumnus. Any of those could save you another 5-10%!
Thanks FC, I didn’t know about those…
Even if you belong to an association it doesn’t hurt to still shop around. I received a much lower quote from Grey Power (Trafalgar Insurance for the over 50 crowd). But on renewal after a year, my rates increased substantially. I subsequently went with Canadian Direct for one third the cost on my car insurance and about two thirds of the house insurance.
A bit more extreme..but some families can save on car insurance by not buying it! Nope, I don’t mean driving without insurance, but actually getting rid of the second car and signing up with a car co-op service that let’s you rent a car only on the days you need it!
Thanks for the great advice! I’m needing to switch my insurance and I was wondering how I would save a little more money this time. Do you have an insurance company comparison chart?
@Austin
Probably the best comparison website is Kanetix, just make sure you have all of your information to input the data.
Great post! I actually discovered having multiple cars on one policy is the way to go and saved some dollars on my premium as well.
Brokers and insurers who operate on the net will normally ask a fairly standard range of questions on their quote website. These quote engines are supplied by a relatively few companies – CDL, SSP and Open GI are amongst the most popular. On a motorcycle insurance quote they may ask for things like your address, no claims bonus, type of bike, mileage etc. All standard stuff and that’s where the problem lies, it is standard stuff.
Want more ways to save?
If you are a college student, you can save by maintain high grades. If you have a NOT so good driving record, you can make things easier on yourself by going for your insurer’s driver improvement program.
For everyone else, be very careful about the vehicles you go for. There are vehicles that are consider insurance-friendly. Generally, they are vehicles that have high safety ratings, low theft rate and cost comparatively lower that most cars.
Good Post – Also Try amount of miles you travel yearly, State Farm gives me discount because I drive less than 6,000 miles a year – try No Smoker, over 55
and ask your agent – they want to keep you as a customer.
For me I am not too comfortable bumping my deductible past $500. The difference in premium isn’t that much and I don’t think it’s worth the extra savings. We get insurance in case we get into accidents, and by having high deductible, I think it defeats its purpose. Same goes for home insurance.
Wow!…Boomer, where do you live? $1150 for two cars, that’s fantastic!!!
I cannot manage less than $1300 for a 2006 Ford Focus and I am 47yrs old with an immaculate driving record…
@Tony – I live in Lethbridge, AB. The seven minute commute to work helps, same with dropping collision on our older vehicle.