Steps to Get Cheap Car Insurance

Car insurance is a consistent part of every household's budget. And, like with all expenses, we all want to get the best bang for the buck. This article will give you some tips on how you can save money on your auto insurance while still getting the coverage you need and without compromising on quality.

Get anti-theft devices

The more secure your car is, the less the risk of it being stolen. Investing in theft devices can significantly lower your premium. A GPS tracker, for instance, may be a good choice if you have an expensive car, but don't go overboard with it. Don't buy a device that costs as much as your car for the sake of a few dollars less per year. An investment you can recover in a year or a bit more is alright, anything over that may not be a wise idea.

Don't necessarily assume a theft device has to be something fancy. A measly steering wheel lock that costs $29.95 on Amazon can lower your premium.

Yearly policies pay up

Even though you will reach deeper into your pocket to pay for a whole year upfront, it's cheaper than quarterly or bi-yearly payments. Discounts can be as high as 10% with some companies, so it's definitely worth it.

Moreover, if you are at fault in a car accident, the insurer is bound to keep the same premium rate by the end of the year. Otherwise, with shorter term policies, you would be billed more upon renewal.

EFT payments

Most, if not all companies charge a nominal fee of $5 or more for processing checks. While this may not sound like a consistent amount, think of how much you would spend for the entire lifetime of the policy. On the other hand, electronic payments are free, or significantly cheaper.

Allow your insurer to debit your bank account whenever your payments are due. Moreover, you can ask the payments to be charged to your credit card, so that you don't have to worry about funding your bank account.

Group discounts

Club memberships or being affiliated with certain organizations will get you a lower premium. Some MasterCard issuers, for instance, pay for physical damage and theft to rented vehicles if you used an eligible credit or debit card to pay for the rental transaction. You may also get discounted coverage if you are a student, a member of a certain sorority club or a war veteran. Contact your favorite insurer and ask for a list of the clubs eligible for a rebate.

Don't get more coverage than you need

Even though it may seem nice to get rental insurance or towing coverage, evaluate your needs and think how often you rent a car or the odds of your vehicle breaking down in the middle of the road. Moreover, pay attention to duplicate coverage – some credit cards, for instance, come with medical insurance packages, so you don't need to buy more.

Also keep in mind that a lot of unscrupulous sales agents will try to talk you into getting packages you don't need. They are being paid by commission – i.e. a percentage of whatever they are selling – so they are motivated to sell you as much as possible. Do your homework, see what kind of insurance you need and don't fall for their sales tricks.

Improve your credit rating

Your FICO score has a strong impact on your insurance premium. This makes sense once you come to think about it from an insurer's point of view: if you cannot pay your debts on time, you are likely to miss insurance payments too or, worse, you may be regarded as an irresponsible person. It all boils down to statistics – people with poor credit scores are more prone to causing accidents due to reckless driving.

I won't go into detail on how to improve your credit scoring – there is plenty of information out there. If you cannot do it on your own, I would highly advise you to hire a financial consultant to help you out. A good FICO score makes your life easier altogether – it's not only good for a cheap insurance premium.

Stick with one insurer

To the best extent possible, have all your insurance policies with the same company. Insurers reward returning customers, so if you have the home, health and auto insurance with the same carrier you may be eligible for a discount of up to 20%.

Alternatively, you could call your current insurer and ask for a similar discount. Tell them you plan on switching to your other insurance company because you are being offered a certain rebate and ask them to match it. A lot of companies will present you with an offer because they won't want to lose a customer.

Educate teenage drivers

Teenage drivers on your insurance policy can raise your premium through the roof. Insurers regard kids as huge liabilities because of the scary statistics: a lot of inexperienced young drivers are involved in car accidents due to reckless driving and putting the pedal to the metal.

Get your teenage kid a safe vehicle. A sports car with lots of horse power under the hood will tempt your kid to speed over the limit, and an SUV poses the risk of rolling over in an accident due to the high center of gravity. The safest cars, according to the most recent statistics, are Ford Fusion, Volkswagen Passat and Bora, Ford Focus and Honda Accord and Civic. But the list is non-exhaustive so, if you have another car in mind, do a bit of research and see whether or not it is recommended for inexperienced drivers.

The list could go on and on, but if you follow these tips you will surely get a lower premium. Do your own research, learn how the insurer assesses you and see how you can improve each point on the scoring chart.