Invest

how to invest

Live

career, food, travel

Save

saving, credit, debt

Protect

insurance, security

Retire

401K, IRA, FI, Retire

Home » Auto Insurance, Save Money, Summer of Saving, Transportation

How to Save on Auto Insurance: 11 Auto Insurance Discounts to Look in to

Last updated by on 7 Comments

Do you Need Auto Insurance?

If you’re not going to get rid of a car, you need auto insurance on it.

Just about every state requires at least some type of auto insurance coverage. At a very minimum you may be required to have some legal liability coverage, but just how much varies by state.

Most states have publications on purchasing auto insurance available, which many times will run comparisons on prices over a wide range of insurers. Your state probably has a publication printed, courtesy of your tax dollars as well. Search for your state’s official website (i.e. michigan.gov) + auto insurance.

auto insurance discounts

Auto Insurance Savings: Rule #1

When trying to save money on auto insurance: Don’t try to take pictures from the driver seat of a passing Toyota Scion that’s styled in memory of the majestic A-Team van while driving on a four lane highway, as seen to the right.

Why Should I Focus on Saving Money on Auto Insurance?

Everyone needs auto insurance and competition is high – so why worry about getting the lowest price for coverage?

Because it is pricey. The mean auto insurance coverage costs $1,047 per year per 2-person household.

And the price you pays can vary wildly by insurer.

Auto insurance is certainly one expense that you have to budget for where doing a little research and making some calls can pay huge dividends in both the short and long term. With little time invested, you can potentially save hundreds a year and tens of thousands over your lifetime.

There are a lot of choices when it comes to auto insurance and each insurer may offer you different discounts at varying levels. We’re going to cover some of the big ones. Once you know all of the discounts that you may be eligible for, you can shop around.

The Most Important Variable in Determining your Auto Insurance Premium

Before you take a look at all the discounts that may be available to you, let’s first discuss the one factor that will allow you to pay the least for auto insurance: the car you buy.

When you buy a newer, sportier, or more luxurious car – you not only pay more for the vehicle – you also pay more for the auto insurance premium to cover the vehicle. This rule never fails.

Nobody other than you really cares what vehicle you drive and most vehicles end up being worthless over time, so why not get a vehicle that is cheap to insure?

Setting your Deductible

The next biggest variable is going to be the deductible that you choose. The higher your deductible, the lower your insurance premium. Your deductible is the amount you must pay when filing an insurance claim for repair/replacement. You’ll need to figure out what deductible amount you are comfortable with based on the age/make of your vehicle and your financial situation.

Auto Insurance Discounts

When it comes to corporate profitability, insurance is a game of numbers. If you’ve had five heart attacks, the odds of you finding a company to insure you and cover your medical expenses for the sixth are highly improbable (until next year, that is). Similarly, auto insurers have run all kinds of mathematical models in which they have been able to discover indicators that point to certain characteristics or features that lead to more or less of a risk for them to insure you.

Insurers want to attract and reward safe drivers who have a low probability of getting in an accident. They have no problem offering discounts for indicators that tell them that insuring you will be of less risk than the average driver. The following are 11 auto insurance discounts that you may be eligible for that will help you save on auto insurance:

  1. College degree or alumni discounts: Many of the big insurers will give you a discount just for graduating or being an alumni of certain educational institutions. That makes the thousands in student loans you owe almost worth it, eh? Some insurers even offer discounts for high G.P.A’s.
  2. Employee discounts: Those in certain professions have proven to be better drivers than others (i.e. teachers, engineers, scientists) and as such, they can get discounts. Some companies may offer a discount based on profession, others will offer it based on employer.
  3. Good driving record discount: Most major insurers will look back at either your 3 or 5 year history in terms of accidents and traffic violations. This can come into play if you have had either circumstance happen between the period of 3 to 5 years ago. If this is the case, you may be able to get a better price from a company that only looks at the last 3 years time. Similarly, if you had violations when signing up with a company but they have since gone over that time threshold, you may now be eligible for a better rate. Don’t expect to get this automatically. It pays to ask.
  4. Short commute or low mileage discount: Some companies will give you a discount for living closer to work or for being an infrequent driver. Makes perfect sense, right? The less you drive, the less likely you are to get in an accident.
  5. Safe vehicles discount: If your car has a security alarm or theft deterrent system, it is less likely to be broken into. This could get you an added discount. Additionally, you may be able to find discounts for anti-lock brake systems, automatic seat belts, airbags, and other types of safety features.
  6. Age discount: You can usually get a good discount if you’re 55 and over or have an AARP membership. I realize that this isn’t the demographic for this site, so file it away in your back pocket for a few decades.
  7. Military: If you were one of the few and proud, you are probably also going to save some cash on auto insurance.
  8. Multiple vehicle discount: If you live in a two, three, or dare I say, four car household, having multiple vehicles on the same policy may warrant a discount.
  9. Multiple policy discounts: Just about all of the major insurers will give you discounts if you also are insured, or become insured through them for other types of policies, including life, home, and disability. It might be worth the time to see if you’d be paying less overall if you took the cheapest coverage for each type of insurance or went with the same company for all.
  10. Pay up front discount: Some companies may offer you a discount if you pay your yearly premium up front versus paying separately each month. If you can afford to do this it might be worth it. Don’t worry, if you find a better rate and want to switch, you are entitled a return for the remainder of the year.
  11. Good credit discount: Yes, your credit score can come back to haunt or benefit you once again.

Auto Insurance Discount Pages for All Major Insurance Companies

I have included the discount pages for many of the major auto insurers, below:

Getting the Lowest Rate

Now that you know how much insurance you need and what discounts you might be eligible for, you’ll basically need to get to work. I do not recommend using any of the comparison quote sites out there as they generally are lead generation based services that collect and sell your information. You’re better off spending an evening on the phone with all of the big-name insurers to get multiple quotes to compare. Here’s what you can do:

  1. Settle on exactly how much insurance coverage you need to get comparative quotes. You will want to provide exact dollar amounts to get a fair comparison between insurers.
  2. Call all of the major companies and probe for all eligible discounts.
  3. Have them tell you and then email or fax their quote.
  4. Compare offers and choose the insurer with the best price. The major players all seem to have similar stability and benefits coverage – so really, all that matters is price.

How to Save on Auto Insurance Discussion:

  • What insurer offered you the lowest price on auto insurance?
  • What do you pay per year?
  • What kind of discounts have you been able to receive on your auto insurance?

Related Posts:


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


7 Comments »
  • Michelle says:

    I always try and get as many discounts as we can. We both have brand new cars and pay less than $100 per month altogether for full coverage. People always think we are lying!

  • Pam says:

    “I realize that this isn’t the demographic for this site, so file it away in your back pocket for a few decades.”

    Your demographic might be larger than you suspect, despite the name of your website. We all are interested in saving money!

  • Kim says:

    As a 2-car couple, we unexpectedly saved a ton of money by combining onto one policy when we got married – it dropped our costs by around 30% for just that small administrative change.

  • Steve says:

    While I agree with your statement, “I do not recommend using any of the comparison quote sites out there as they generally are lead generation based services that collect and sell your information.” there are other services out there that will actually find you the best rate and sell it to you themselves. Examples are Consumer United, Answer Financial, and Esurance. While none of them find you rates for *every* company, it can save you a lot of time talking to them and figuring out which company is cheapest.

    The trick is then to buy directly from that particular insurance provider, since doing so will save you from paying the commission to the third-party. Many providers also offer discounts for buying online, since it gives customers incentives to not waste company resources and call paid sales agents.

  • Mission Viejo says:

    With a little bit of effort, one can indeed save up some money on one’s car insurance. It may take a bit of your time in finding the right car insurance agency and a good insurance agent to guide you, but it should be totally worth it.

  • James Shaffer says:

    Go through a local independent broker. Ask around to find one you can trust. I have used the same broker for about 30 years. I have had policies with a number of different insurance companies. The broker I use only deals with A+ rated companies. We have always had great customer service from these companies when filing claims. Any time I have taken the time to check with the big name insurance companies, my rates were always far, far below anything they had to offer.

    The best part is that once your broker has all your info, they will do the legwork for you to check rates from multiple companies. All I have to do is call or email my broker periodically and ask if there are better rates available. If so my broker does all the paperwork, then sends it to me to sign and return. My time to check for better rates and change insurance companies is about 10 minutes.

  • Now, the page you are despatched to, via the link, is used to give you valuable information. Here are
    3 guerrilla marketing strategies you can use to generate leads
    and keep your ‘sales funnel’ constantly full.
    These include driving traffic to high converting squeeze pages where potential customers are asked to provide their contact information in exchange for information or products they desire.

SPEAK YOUR MIND

Enter your:


Home | Sitemap | Terms | © 20somethingfinance.com