6 Tips and Discounts to Save on Auto Insurance

What you pay to keep your car on the road can add up big time: Car insurance can be a big part of this expense. Fortunately, there are myriad ways to save money on this expense. The following six tips are among the best ways to reduce the amount of car insurance you pay each month.

1. Make Being a Student Pay

Are you a college student? If so, you may see some significant savings on your car insurance. An article on the The Penny Hoarder website offers these gems. First, car insurance companies will often give discounts to students who have a “B” average or above. Statistically speaking, these students tend to have fewer car accidents, so auto insurance rates are cheaper for them.

Secondly, a student’s good grades can even garner that student’s parents better insurance rates, so it pays to ask. (Literally) To get this discount, college students and their parents should shop around to find insurance companies who participate in such a program. The requirements may vary. Criteria may include grades and/ or enrollment requirements, such as being a full-time student.

2. Do a Quote Comparison

This was already touched on in the paragraph above, but it bears repeating. Shop around for your insurance. The price of insurance can be drastically different between companies - by as much as a thousand dollars. If you’re not sure which company might work for you, then take a look at their advertising. Consumer Affairs point out that each insurance company has an ideal consumer in mind when they advertise.

Companies like GEICO and Progressive charge less because they cater to consumers who need to look at the bottom line. However, Liberty Mutual and State Farm fall on the other end of the spectrum because they are all about offering superior customer service, which costs drivers more in the end.

Additionally, don’t settle for a one-time price quote. Ideally, you should be doing a cost comparison of your insurance rates annually. Rates can change over time. This can affect you even if you’ve been with a particular insurance company for a while. That said, even if you find that your particular company still offers the best rates, there are ways you can save even more money: Ask your insurance company if it gives a loyalty discount to long-time customers.

Finally, when comparing prices, you should ask about full coverage versus liability insurance. This is especially true if your car is older: It’s probably paid for already and too old to justify paying full coverage auto insurance. If you do wind up paying more for insurance for an old car, you may actually wind up paying more in insurance than the car is worth.

3. Capitalize on Your Good Driving Record

When talking to a potential insurance company, be sure to ask if that company offers discounts to drivers who have a good driving record. For some insurance companies, the savings will be automatic. For others, it may come with strings attached, like not being involved in an accident for a certain period of time. By having a safe driving record, you could potentially save up to 10% on your car insurance.

Some insurance companies keep track of a safe driving record by having you plug a device into your car to measure your driving habits. Along the same lines, taking a defensive driving class can also garner you a discount. Again, when you are shopping around for insurance, be sure to ask if there is some sort of a discount for safe drivers.

4. Increase the Right Things

When it comes to insurance, you may actually pay less by increasing instead of decreasing something. For one thing, if you have your car insurance with one company, your renters or home insurance with another, and your life insurance with still another, you may be paying way too much for insurance overall. However, if you bundle all of these insurance needs up and take them to just one company, you may get a discount.

By increasing the number of insurance policies you have with one company (and getting rid of the others), you’ll not only save yourself the hassle of paying three or four different companies each month, you’ll also save yourself some cash. On a related note, if you have more than one vehicle, you can increase the amount you save by increasing the number of vehicles you insure through the same company. Keep in mind that vehicle is a broad term here. Your motorhome and your motorcycle qualify as vehicles, too.

Another way you can increase to decrease is to raise your deductible rate. For example, raising your insurance deductible from $500 to $2000 can save you up to 16% on your monthly auto insurance bill. Also note that if you live in Wyoming, Kansas, South Dakota, North Dakota, or Massachusetts, you’ll get better savings from your deductible as well.

Finally, one other way to save in this category is to look at your credit score. It turns out that increasing your credit score may net you more than just a premium credit card deal. Raising your credit score can also save you money on your car insurance, too.

5. And Decrease the Right Things

Not all car insurance can be decreased by the increase, so to speak. If you don’t drive your car very often, then ask about a per-mile rate. If you don’t drive your car very often, then mention this to your insurance rep. Driving less means being at less risk for a collision, which can save you money.

6. Membership Has Its Privileges

Sometimes being a member of a certain group or company, like AARP, AAA, Sam’s Club, or Costco, can net you some car insurance savings as well. Being a member of the military is also a way to save money on auto insurance. Be sure to check your memberships to see if this discount applies to you.