What are some of the easy or not-so-easy ways to save money on car insurance?
The best thing you can do is shop around, and tell your current company that you're shopping. I had been with GEICO for years and recently discovered (while shopping for renter's insurance) that AllState offered the same coverage for a few hundred dollars less. When I called GEICO to cancel, they offered me an additional discount (for being a member of a credit union) that I hadn't received before. I still switched, but was sad that I hadn't been getting that extra discount just because I never asked if there were other discounts I might qualify for.
This article by ChristianPF talks about some changes you can make to reduce auto insurance costs.
I came across the following post from Nov. 5, 2009 on the Mint.com blog: 10 Things That You Can Do To Lower your Car Insurance Premium. See their post for details, but here's a summary of the tips:
- Switch Vehicles
- Pay Up Front
- Drive Like an Angel
- Cut your Miles
- Improve Your Credit Score
- Reduce your Insurance Levels
- Buy a Vehicle with a Theft Device or have one Installed
- Same Insurer, Multiple Policies
- Be a Loyal Customer ¹
- Increase your Deductible
¹ I'm not so sure about the suggestion to be loyal. I'd still shop around as JCarterRN suggests, but give my current company the opportunity to do better before I'd jump ship.
One that isn't typically mentioned: move. Rates are often higher in certain zip codes where there are more accidents and/or thefts. I cut my insurance nearly in half by moving. If you're looking at moving anyway, it's worth considering.
Most of this advice applies to the UK, where I work in motor insurance pricing for a large personal lines insurer, but a lot of it is more general.
A loyal customer is usually an overpaying customer. The guiding priciple most financial services companies go by is that there's no point rewarding loyalty except to create it where none exists, i.e. by giving massive discounts to desirable new customers.
Shop around every time your policy comes up for renewal, and whenever your circumstances change. Never allow your policy to automatically renew - you may be charged a higher premium by default if you do! Phone up your current insurer and haggle to see if they can beat the best quote you find - their agents will usually be able offer a discount.
If applicable in your country, use price comparison websites. Use at least two - different insurers sometimes offer different rates on different sites, competing harder on some than on others, especially if the price comparison website happens to be owned by one of the insurance companies that quotes on it. One example of this is http://www.confused.com, which is owned by RSA group, a major insurer.
If there are no price comparison websites for your country, try purchasing your policy through a broker. They'll get quotes from a panel of insurers and offer you the cheapest. They can be especially helpful if you have a problematic driving history, e.g. drink-driving convictions, as many mainstream insurers will decline to quote for such people.
Chris Rea's answer is a good starting point, but I would disagree about cutting back on cover. In the UK at least, many insurers often charge an equal or greater amount for lower levels of cover, because the people who choose these policies tend to be worse risks.
Re switching vehicles - a cheap old car will not necessarily be much cheaper to insure than a new expensive one, as you can still injure people with it or crash into other people's cars, and the newer car will probably have better safety features. However, a less powerful and smaller vehicle typically poses less of a threat to others and will therefore be cheaper to insure.
Another tactic not mentioned so far is 'reverse fronting'. 'Fronting', where the main driver poses as an additional driver and nominates a less risky driver as the main driver, is illegal, but the reverse - adding a less risky driver as an additional driver - is legal and can sometimes reduce premiums. This is because only one of you can drive the car at any one time, and sometimes it'll be the less risky one. So, especially if you're male and aged < 25, see if adding your safest parent as a named driver makes a difference.
If you have the choice of storing your car on a driveway or on the street, get quotes for both and see which is cheaper. If you live in an area where burglary is commonplace, thieves are more likely to steal cars left on driveways, as they can break into the owner's home and steal the keys. If not, the driveway is better, as it reduces the risk of a collision.
If you have previously driven another vehicle (e.g. motorbike or moped), or if you've been insured as an additional driver on someone else's car, call up insurers directly and ask if they can offer you a no-claims bonus for this. Quotes from price comparison websites tend to limit you to the numbers of years of no-claims you've accrued as a main driver, and may not reflect your full available no-claims bonus.
Some insurers give you the option to install a tracking device in your car that can tell them various things, e.g.
- How fast you drive / are you speeding?
- What time of day/night you drive
- How sharply you brake / corner
- What distance you drive
- Where you drive
Some people may be uncomfortable sharing this much information with their insurer, but for particularly risky drivers (I'm looking at you, males < 25) it can sometimes result in a substantial saving. One insurer that offers this is http://www.insurethebox.com/.
Finally, if every insurer you can find is quoting in excess of £10,000 for a year's cover, you may find it cheaper instead to purchase a vintage agricultural vehicle and get it covered on a specialist farmer's policy: