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Big-Time Saver: Financially Savvy Tips to Get the Best Cheap Car Insurance Rates

on 24 Jun, 2019

Transportation costs can run a middle-class family up to 20% of their net income. Is your car insurance raising your transportation costs?

Finding cheap car insurance is possible. But you also need to have enough coverage in case of an accident. 

How do you balance affordability with financial protection?

Making small changes to your vehicle and your auto policies can lower your rates. Even small drops add up over time.

Explore these 10 ways to get the cheapest car insurance and start saving money on your transportation costs.

1. Shop Around

When was the last time you shopped around for new car insurance? Sticking with one company may pay off with lower rates. Some companies may offer you lower rates for your loyalty.

But you might be surprised that other companies can offer you even cheaper rates.

The rates aren’t the same from one company to another. Check with other companies every time your policy is up for renewal to make sure you’re still getting the best rate. 

You can switch your insurer at any time. So you don’t have to wait for your next renewal if you’re paying too much for insurance.

Using an auto insurance broker can help with the shopping process. Brokers work with lots of different insurers. They can give you quotes from several companies and once instead of you applying individually to multiple insurers.

When comparing policies, make sure you’re comparing the same coverages. One company may be cheaper, but do you get as much coverage as a policy that costs a little more? 

2. Customize the Coverage

Your car insurance has to meet the mandatory minimum coverage for liability based on Canadian and provincial laws. Many people choose higher coverage than the minimum to make sure they’re protected.

Being underinsured could cost you a lot if you’re responsible for an accident. You can be held financially liable. In the long run, it costs you more if you don’t have enough coverage.

You can adjust your insurance coverage to save a little money without being underinsured. If you have the highest possible coverage now, reducing it a little can cut your premium.

If your vehicle is on the older side, you might get rid of comprehensive and collision coverage. If your vehicle isn’t worth much anyway, it might not be worth it to pay the deductible for those coverages.

3. Look for Discounts

Insurers often give discounts for having more than one policy with them. If your family has more than one vehicle, you may get a multi-car discount. 

You can also get a bundle discount for having other types of policies with the same insurer. The most common are homeowners or renters insurance. You might get a discount for bundling boat, RV, motorcycle, or other types of insurance with the same company.

If you have multiple types of insurance policies, get a quote for all of them from different insurers. You may be able to lower your overall insurance costs by switching.

Another potential source of discounts comes from your professional or personal membership or affiliation with certain groups. You might get an alumni discount for graduating from a particular college. 

Some employers may have discount options with certain insurers. You might also get a discount if you’re a member of a certain professional organization.

The Canadian Nurses Association offers preferred insurance rates. You can also get discounts if you’re a member of the Ontario Bar Association, Chartered Professional Accountants Ontario, or Professional Engineers Ontario. If you’re a member of any professional organization, check on potential insurance discounts.

4. Change Your Car

Are you in the market for a new car? Willing to trade in your current vehicle for something cheaper?

The make, model, year, and safety rating of your vehicle all go into the pricing for your insurance. Trading in your vehicle for something that’s cheaper to insure drops your rates.

Higher priced cars cost more to insure. If anything happens to the vehicle, it costs more to repair or replace it. Going with a cheaper car saves on your car payment and on your insurance premium.

Look at the safety ratings of vehicles when you’re shopping for something new. Safer vehicles cost less to insure. Vehicles with good crash ratings and lower instances of theft may qualify for cheaper rates.

Before you make a purchase, contact your insurance agent or broker to get a quote. They can tell you the price change of your insurance based on the new vehicle. If the vehicle you’re considering will increase your rates, consider looking at other vehicles instead. 

5. Pay Upfront and On Time

Did you know that the way you pay for your insurance can affect the total you pay? Insurers typically let customers pay monthly to divide up the total premium. That’s easier on the budget, but it may cost you more.

Companies often charge a small fee to make the monthly payments. If you pay in full, you may get a discount. You also avoid those monthly fees.

If you can’t pay all at once, look into fewer payments. Maybe you can pay half of the premium now and half in a few months. You’ll still get rid of some of those monthly fees.

No matter how you pay, always make your payment by the due date. Late payments usually come with fees. It may not seem like much, but even a $5 late fee every month adds up to $60 every year that you don’t need to pay.

6. Show Responsible Habits

Being a responsible driver and person, in general, helps you get cheap car insurance. A clean driving record shows you’re less of a risk. That means you’ll likely cost the insurance company less, so they give you better rates.

If you already have a few tickets on your record, don’t worry. They’ll fall off after three years, which helps lower your rates in the future. Stick to safe, responsible driving now to reach that three-year mark faster.

Continuous insurance coverage also shows you’re a responsible person. Going without car insurance for any length of time not only puts you at financial risk, but it may also raise your insurance rates. 

The insurance company sees the gap in insurance as risky behavior. When you start a new policy, expect to pay more because of that gap. Keeping consistent coverage can help keep your car insurance lower overall.

Even your credit score affects insurance rates. Poor credit shows poor decision-making in the eyes of insurers. It makes you look risky overall, which means you might make risky decisions behind the wheel.

Check your credit score and report. Make sure everything on the report is accurate for the best possible score. Focus on improving your credit score so your insurance rates might improve over time.

7. Raise Your Deductible

If you have comprehensive and collision coverage, look at the deductibles. Increasing your deductible can save you a significant amount of money.

Say your current deductible is $250. Raising it to $500 or $1,000 could decrease your annual premium. Just make sure you can cover that deductible amount should you need to make a claim. 

8. Try Usage-Based Insurance

Insurance companies make assumptions about how you drive to get your rate. But what if you drive differently? Maybe you don’t drive very much or you brake and accelerate slowly and responsibly.

Usage-based insurance, or telematics, uses technology to track your driving habits. A wireless device tracks how you drive, including distance, time of day, and acceleration and braking. 

The insurance company looks at that data to assess how risky you are as a driver. You can reduce your premium based on those driving habits. 

9. Add Safety Gear

A safer vehicle is cheaper to insure. Adding various types of safety equipment may lower your insurance premiums.

Anti-theft devices, such as engine immobilizers, car alarms, and steering wheel locks, cut down on the chances of your car being stolen. A stolen vehicle is expensive for your insurance company. They’re willing to cut your rates a little for devices that prevent that from happening.

Putting snow tires on your car in the winter can improve your safety. It may also decrease your car insurance, especially if you live in Ontario.

All insurers in Ontario are required by law to offer a discount for customers for using snow tires. The discount can vary, but it’s usually up to 5%. For the typical Ontario policy, that savings is about $80 per year.

Insurers can offer different discount rates for snow tires. This is another good reason to shop around for rates. You might find a bigger discount with a different insurer.

If your vehicle already has safety features built into it, make sure the insurer takes them into consideration when creating a quote. 

10. Take a Driving Course

Taking a safe driving course may earn you a discount on your auto insurance. This can be especially helpful if you have a young driver on your policy. 

A driving course improves your driving skills. In theory, you’re a safer driver after the course. Your insurance company may reward you for that safer driving with a discount.

Get Cheap Car Insurance Now

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