If you’re like most people out there and wondering how to get cheap car insurance, don’t worry, you don’t necessarily have to sacrifice quality in pursuit of a good deal. There are several way that you can get cheap car insurance without putting yourself at risk for an extremely high deductible or payment, or even worse, not being covered in the event of an accident. These range from some of the more obvious methods that you have likely heard about, to some strategies that may not have crossed your mind.
The classic answer to the question of how to get cheap car insurance is simply to raise your deducible to the highest level you think you will be able to afford in the event of an accident. If you have ever looked at an insurance price chart, you’ve realized that the more risk you’re willing to take on in this regard, the lower your monthly premiums become. It doesn’t take a genius to figure out why this is, just a little logic. You see, insurance agencies make money by taking the money that you “lend” them in premiums every month, and then investing in a variety of ways. As long as your premiums and the money they make off of those investments comes in higher than what your insurance claims will be over the course of your life, then the insurance companies make money. By keeping more money in your own pocket, you can basically run your own little insurance agency for yourself. The best solution is to take what you would have been paying in premiums and invest it on your own behalf. The basic idea of investment returns almost guarantees that you should make more than enough off those investments to cover your increased deductible, as long as you don’t have exceptionally bad luck and need to cover that deducible multiple times.
When looking at how to get cheap car insurance, it becomes much easier in most places if you have a good credit score. If companies believe they will never have to worry about your premium coming in on time then they are usually willing to give at least a 30% discount over someone with a negative credit history. Make sure you check your credit score with the major credit agencies before heading into the insurance company to negotiate. This can be a valuable tool in your negotiating tool belt.
“Do you really need that luxury sports car?” This is a common question that I often ask people that come to me asking how to get cheap car insurance for their brand new speed demon that cost them upwards of $40,000. It makes no sense to me as someone who has never derived much enjoyment from their vehicle. For me, driving is merely an activity to get from point A to point B and back again. Naturally then, I have never owned anything other than a solid, dependable, non-head-turner of a car, and consequently, I have never paid much extra in insurance premiums because of my automobile choice. The bottom line here is that the more expensive your car, the more expensive your premiums will be as well, so make sure to factor that into your financial calculations when determining if you can afford a vehicle. Most people forget this little factor when the dealer is sitting right in front of them shining up the hood, or when they feel the power of the car underneath them. One other thing to note, sports cars have the highest crash rates specifically because of the clientele that generally purchase them, and the temptation to drive them recklessly (without the skill that professionals have). Insurance companies and their actuarial math wizards have obviously realized this, and they are going to make for driving that vehicle choice specifically.
Perhaps the best advice that I can give you in terms how to get cheap car insurance is to shop around and compare prices. I know this sounds elementary, but so many people avoid the chore of getting quotes from a number of places, and then it ends up costing them a fair amount. For maximum results, don’t merely shop around the first time you buy car insurance either. When it comes to re-upping at the end of every year, check out what competitors would offer to switch over. There are many insurance companies who look at the relevant statistics and realize that they should put any extra sales money into bringing in new clients with special deals or “teaser” rates, because after you get them to sign on the dotted line once, sheer human laziness will probably drive most people to just stick with that company. It is interesting to note that many companies have loyalty programs and will probably honour most price-match situations if you have been a solid customer for them. They want to keep your business and you should use this to your advantage if one of their competitors is offering a great deal. Remember, everything is negotiable if you try hard enough.
When in doubt about where to look for getting the best deal in car insurance, take a look and see if your State or Province has a 3rd party review in place. Many of these can be accessed online, and they generally do a good job of rating the performance of insurance agencies. In the world of insurance, bigger does not always mean better, but generally the larger companies can get away with offering products at lower profit margins because of their sheer economy of scale (think Wal-Mart vs the ma and pop corner store). Sometimes the sacrifice in customer service just isn’t worth it however. When looking at how to get cheap car insurance remember that the absolute cheapest option is rarely your best deal. Instead, a great mix of quality and value should be your overall goal.