Creative ways to reduce your auto insurance: Part 1
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Many consumers rely on their vehicles for transportation to work, medical appointments and a variety of family needs. Vehicles can be costly to run due to fuel, maintenance issues and for most drivers, state-required auto insurance. While many drivers are savvy in comparing fuels prices (i.e. www.gasbuddy.com) and finding coupons for routine auto maintenance (i.e. online coupons, mailers, etc.), many are unaware of how they can reduce their auto insurance premium.
This article will highlight four things that may help you decrease your annual auto insurance premium:
- Compare insurance costs per vehicle type: Before you purchase a vehicle (new or used), be sure to research how much insurance will cost. Many things affect premium’s including: the car’s price, repair costs, safety record and the likelihood of theft. Visit the Insurance Institute for Highway Safety for additional tips on how to select a vehicle.
- Compare insurance quotes: Research recommends getting three price quotes before making a final decision. Information can be found online or by calling insurance companies. Keep in mind that insurance can be sold directly from companies, agents or independent agents. The Insurance Information Institute recommends that you contact your state insurance department for price comparisons and to inquire if they provide consumer complaints about companies that you are considering. For Michigan residents visit Department of Insurance and Financial Services. It is also worthwhile to assess the financial stability of companies. You can obtain company rating information at A.M. Best or Standard and Poor’s. Lastly, do not forget the value in seeking recommendations from family member and friends.
Tip: Be sure to consult your monthly budget to see what you can actually afford. If you do not have a current budget in place, visit MI Money Health for a variety of financial tips, including how to develop a monthly budget.
- Purchase multiple insurance policies with the same insurer: Often, insurers will give multi-policy or multi-vehicle discounts and some will even offer discounts to long-time customers. So it pays to ask questions. However, keep in mind it still might be cheaper buying different insurance policies from multiple companies versus all from one, so do your homework before making your final selection.
- Ask if low mileage discounts are offered and if you qualify: When comparing companies, ask if they offer this type of discount. Some companies will offer reduced rates for consumers who drive less than average per year or who utilize car-pooling to and from work.
For additional ways to reduce your auto insurance premium be sure to look for the second article in this series: Creative ways to reduce your auto insurance: Part 2.
Michigan State University offers money management and homeownership classes. For more information about classes offered in your area visit, MI Money Health.
