After getting the big lecture warning against driving without insurance, how can you lower the price tag for such a basic necessity? Thankfully, there are several ways to cut costs. While the methods below are not going to prevent you from paying through the roof, they are proven cost-saving methods that could cut hundreds of dollars off your car insurance premiums:
- Drive an older, “everyday” car. You likely won’t turn heads driving a 1993 Ford Escort, as opposed to a 2003 Corvette, but you will save a ton of cash on your auto insurance policy. Cars that are made out of steel are far cheaper to fix than sports cars made out of fiberglass. The rate of injury and theft is also lower in an Escort than a hot rod. Plus, if your car is worth $3,000 or less, you can choose to eliminate collision insurance from your policy.
- Good grades, better rates. If you make good grades in school, let your car insurance company know. Students with a “B” average or higher (3.0 on a 4.0 scale) are considered lower risk drivers. Earn a substantial discount just by presenting a copy of your report card.
- Maintain good credit. Pay all of your bills on time so that your credit score is strong. Automobile companies look at your credit history because they believe there is a significant correlation between good credit and good driving habits – and vice versa.
- Strive for a good driving record. As tempting as it is to drive your Maserati 185 miles per hour, obey speed and traffic laws. The money you save from fines and higher insurance rates is worth the “slow poke” label you may get from fool-hearted friends. Also, if you can find a driver’s education course, take the class, and let your insurance company know about it. It can save you bucks on your auto insurance premiums.
- Membership has its privileges. Let your insurance company know about any memberships in clubs or organizations. For example, GEICO offers significant discounts for fraternity membership, Golden Key National Honor Society membership, and scores of other student and alumni organizations. AAA members can get discounted rates by purchasing auto insurance through AAA’s insurance partnership with American Insurance Group (AIG).
- Drive on mom and dad’s car insurance policy for as long possible. Students who get their own policy pay more because they are listed as a “primary” driver, placing them in a higher risk pool. But, if you stay on your family’s policy and list yourself as a “secondary” driver on a car, you get the price break of your parent’s age as the primary vehicle operator and can get another cost savings from having a multi-car discount on the policy.
- Higher deductibles, lower premiums. By raising your deductible, say from $250 to $500 for liability insurance (covers medical costs caused by you in an accident), you can save several hundreds of dollars in premiums. Also, you can save by lowering the limits of coverage. So, instead of carrying 100/300 ($100,000 of coverage per person/$300,000 per accident) of liability insurance, you can decrease this coverage to 50/100 ($50,000 per person/$100,000 maximum. But make sure you carry the state-required minimums for legal operation of your car and that you carry enough insurance to adequately protect you if the worst-case scenario happens.
- If you work while going to school, let ‘em know if it is close to home. You can save money on car insurance if you work within three miles of home and primarily use your car to go to and from the workplace.
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