Car costs got you down? Between maintenance, gas, and insurance coverage, having a personal vehicle is no small expense.
Well, the inimitable Suze Orman offers up ten tips for keeping car insurance costs down. These are especially helpful in a world where gas prices and maintenance expenses continue to climb.
Here’s the short version:
Boost your deductible
Keep cash on hand for emergencies, or call it partially self-insuring. Either way, raise that deductible as high as you’re comfortable and as high as your funds will allow.
This will keep your monthly payments down — and you can earn interest on that money instead.
Get less mileage out of your policy
Driving less than 10,000 – 12,000 miles yearly can often qualify you for an insurance discount. The less you’re on the road, the less likely you are to be a risk for the insurance companies.
This translates to lower premiums each month. You can also drive for “pleasure” — instead of “commuting” or driving for “business” — and often snag a discount. This is another benefit of working from home.
“Home in” on a discount
Yeah, yeah, that’s a bad pun. But the point remains: if you include your home insurance with the same company that provides your auto insurance, you might qualify for a discount.
Toss in a number of other policies, if needed, and you’ll save even more. For instance, I carry USAA coverage for two vehicles, two homes (my residence and a rental property), life insurance, and personal property.
Bundling these products together through the same company saves me a ton. It’s also easy keeping everything straight when I need to file a claim or get help.
Couple up on your policy
Two heads in one policy are better than one… policy for each head. You could get a 30% discount by joining forces to combat evil.
If you and your significant other are still on your own policies, get a quote for combining the cars into one. Chances are, you’ll save a few bucks.
Sometimes, taking a defensive driving course will lower your premium. Sometimes, it’s also incredibly boring.
Call and ask your insurance company if they’ll offer a discount for the successful completion of this course. If so, those few hours of your time may be well worth the savings. This can be particularly helpful if you have a teenager on your policy.
Put your degree to work
I told you an advanced degree was worth it, and here’s the proof.
Give your insurance provider a list of your lettered qualifications. Depending on the company and your accomplishments, this may very well translate to a monthly discount.
Suze suggests you look to your affiliated organizations, like alumni groups or teachers’ associations. They may provide special rates.
Of course, being a member of an organization like AAA is almost always a surefire way to snag another discount.
Think “slowpoke”, not “Speedy Gonzalez.” Take your foot off the gas and avoid those speeding tickets in order to reduce your auto insurance rates. Companies only look at the last three years, so it won’t take too long to clean off your record from an insurance rate perspective.
Here you can also consider Snapshot from Progressive and similar technologies. Your insurance company sends you a device that you plug into your car. It tracks several factors, such as hard braking, miles driven, idle time, and night driving. Based on the results, you could save on your car insurance.
Give yourself credit
Insurance companies look at a number that is similar to your credit score when configuring your policy. So, make sure that you don’t declare bankruptcy or default on loans. Either of those could negatively impact approval for coverage and the cost of premiums.
Note that some states have outlawed the practice. California, Hawaii, Massachusetts do not allow insurance companies to consider credit scores, according to Consumer Reports.
Make the grade
If you’re a younger driver, keep your nose to the books. A 3.0 GPA in high school or college often reduces premiums.
Suze also suggests being vigilant about how kids are assigned to cars. My father solved this problem very simply, but in a way that I found disappointing: when I reached driving age, he sold his Porsche.
It may have been older and purchased used, but the combination of “16-year-old” and “Porsche” on the same policy had our insurance company seeing dollar signs. So, my dad nipped that in the bud by selling his weekend fun car.
Instead, he picked up a Nissan Maxima to add to our family Subaru station wagon. The practical (much less fun) car was both safe and less valuable — and less likely to be a tempting speed machine for a new driver. This meant lower premiums for the family.
Dad was ahead of the ball game. Darn.
Do you have other tips for saving money on auto insurance? Share them below, in the comments!
Published or updated July 28, 2017.