Auto insurance is a type of insurance on which a large amount of money can be saved. There are various ways of saving money.
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| How to save money on car insurance |
Comparing insurance quotes
The first way of saving money on auto insurance is to shop around for quotes. There are many people who will simply renew on their existing policy. Although there are times that this will still be the cheapest policy on offer, it does not make any sense to refuse to compare quotes. If using a broker it is always a good idea to ask for a quick comparison. Read also: Discount Auto Insurance – is it right for you?
Another way of saving money on car insurance is to pay for the policy at one time. Insurance companies will allow for insurance policies to be paid by installment. However the companies do not like this and this is reflected in the price that is paid. The interest that is charged on auto insurance installments is often higher than that charged on an overdraft, and it is quite a good idea to pay the overdraft interest in order to pay the auto insurance in one hit.
Insuring what needs to be insured
Another way of saving money on auto insurance is to only insure what needs to be insured. This does not necessarily mean the bare legal minimum of insurance, in many cases the policy holder will need more insurance if they could not afford to replace the car that they are driving. However if they can afford to pay for the car then in the long term minimising insurance premiums will pay off.
By qualifying for certain discounts and looking online for different insurance providers, anyone can save hundreds per year on car insurance. Read also: Choosing Insurance Company and Finding Savings.
Another way to cut down on auto insurance costs by cutting down on what is insured is to increase the excess on the policy, if this is allowed. A policy’s excess is the amount that is first paid by the policy holder in the event of a claim. Insurance companies like this for two reasons. Firstly it cuts down on the amount that is being paid per claim and secondly it cuts down on the numbers of claims that are made, as people are less willing to make claims as either it is more than the excess or slightly less than the excess. This means that companies will encourage a larger excess through the cost of the insurance.
There are other, longer term ways of driving down the price of auto insurance. Firstly there is good driving, which means that a person will be cheaper to insure. Secondly the cost of insurance should be considered when buying a car or renting a new house.