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car insurance discounts
13 Jul 2018

Your Complete Guide to Car Insurance Discounts

The cost of car insurance has been increasing since 2007. Also, the average cost of owning a new car is about $8,469, as of 2017.

As a car owner, this means you’re going to fork out money every month to keep your car running and safe. However, the cost doesn’t need to be a burden, particularly when paying your car insurance premiums.

With a few tips, it’s possible to qualify for car insurance discounts that can significantly lower your premiums. In this post, we’re going to explore some of the available discounts and how you can get them.

Without further ado, let’s get right to it.

Types of Car Insurance Discounts

The types of available discounts vary from one insurance company to another. Identifying them is the ideal way to know those that you’re eligible for now and those you can work to earn in future.

In this section, we’ll cover three categories of discounts that help to lower your premiums.

1. Driver Discounts

These are common discounts that almost every insurance company offers. The discounts are based on driver’s age, professional organizations, student status, driving history, and the overall car use.

Good driving history will certainly score you a discount. Most firms usually expect you to have at least three consecutive years that are free of accident claims.

Being a good student in school is also a good thing. Your grades should prove it, and you need a B average or higher. Also, if you graduated recently, some insurers are likely to reduce your premiums.

Your job, location, and driving habits also matter. You should be low-risk as this means you’re unlikely to get involved in accidents. If you live and work in safe areas, you can also add that to your applications.

Insurance plans for people living or working in crime-prone neighborhoods are relatively high. If you drive less to work, you’re also an ideal candidate for discounts.

Taking advanced driving training and courses, such as defensive driving course, can help.

2. Vehicle Discounts

Your vehicle can also net you discounts if you have installed security and safety features. Some of the things that insurance companies consider include:

  • Anti-theft devices such as alarms and cameras
  • Anti-lock brakes
  • Automatic seatbelts
  • Airbags

Having a new car also means your risk is low, so you can get some savings while buying your policy. Using alternative fuel or driving a hybrid vehicle are also eligible for discounts.

3. Policy Discounts

You also need to give an incentive to your insurer to offer you certain discounts. For example, insuring several or all your vehicles using the same insurer can slash your overall insurance cost. This is an excellent opportunity for businesses and people with two or more cars.

How is your budget? Do you feel you can pay your entire premium up front?

If you can do so, your insurance provider will more than likely offer you a discount. Also, if you stick with the same insurer for a certain number of years, you can qualify for loyalty cost cuts.

Bundling your homeowner’s policy and car insurance is a great way to scoop another saving. Some insurance companies also run referral programs. These programs allow you to earn points, which you can redeem to reduce your premiums.

How to Qualify for Insurance Discounts

Well, now that you know some of the available discounts, let’s see how you can get them. Keep in mind that certain factors can disqualify your from these discounts, for example, a poor credit score.

Let’s explore them.

1. Switch Your Insurer

Don’t assume your insurer is the cheapest. Or, if you feel like your insurer’s premiums are a bit high, then switching providers will undoubtedly be a great move.

Simple online price comparison can help you get reasonable quotes from multiple insurers. Some companies are eager to win you and will offer irresistible new client discounts that you can easily leverage.

Some car owners can easily save $400 to $600 a year for switching their insurance company.

2. Pay Your Bills On Time

As noted before, your credit score can impact your chances for earning specific car insurance discounts. In most states, except Hawaii, California, and Massachusetts, your credit score can be a significant factor in insurance quotes.

Insurers claim that car owners with good credit scores are less likely to file claims in the event of a dispute. This means that a poor credit score can easily increase your insurance rates.

So, pay your bills on time and reduce your debt to maintain a good credit score. If you do need to take out a loan, it might make sense to look at no credit check loans, where there is no hard credit check that can further hurt your credit score

3. Renew Your Policy Early

In most states, it’s against the law to go without insurance coverage. The law requires that drivers should have liability coverage. So, when your plan has expired, don’t wait too long to renew it. If you need to, you can take out a small loan to help cover those premiums when they are due.

In fact, if you renew it early, you’re likely to get a discounted rate. Also, some companies offer incentives to new customers who switch companies before their policy expires.

4. Get a Usage-Base Insurance

Another way to get a reduced insurance plan is through buying a usage-based or pay-per-mile car insurance plan. This is great for those people who don’t use their cars regularly. May you use public transportation to go to work and a bicycle to shop.

You can work with an insurance company that offers such programs. If you enroll, you allow your insurance company to track your driving. This will enable you to qualify for discounts based on when your drive, how much you drive and how well you drive.

Car Insurance Discounts – Final Thoughts

Are you ready to cut your overall insurance cost? If so, this post covers enough to help you get started.

Take the time to review your driving habits, install safety systems or even take an advanced driving course. These are some of the things that will impress your insurer to offer your car insurance discounts.

Keep in mind that reducing your car insurance cost is one of the ways to take control of your finances. Identifying ways to boost your savings can go a long way towards securing your financial life.

Do you want to learn more about personal finance? We have a learning center just for you, with independent advice on products like bad credit loans and installment loans for bad credit. Make sure you read our tailored advice before you make your next move.