No matter who you are, where you live, or what you drive, there’s almost always a way to pay less for car insurance. The challenge, of course, is finding it.
Although most auto insurers look at similar factors, each one weighs them a little differently. One company might care most about your driving record, meaning you’ll get a better-than-market rate if you have no accidents or tickets on record.
Another might emphasize your auto insurance score, which, like a credit score, evaluates your financial habits. Third, vehicle age and type might be the most important.
Most insurers won’t talk about their actuarial strategy, so ask for a quote and compare. But once you find the right fit, the game isn’t over: Insurers offer a huge range of discounts that, assuming you qualify, can slice your monthly premium down even more.
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Before signing on the dotted line, ask whether the auto insurer you’re working with offers discounts for:
1. Paperless statements
Few industries involve more paperwork than insurance. Across 50,000 customers, the cost of printing insurance cards, promotional mailers, and policy documentation can top six figures. To save money, auto insurers are turning to paperless statements. In exchange for receiving updates in their inbox instead of their mailbox, insurers might knock $20 or $50 off your annual rate.
Online statements can also save you money in one more way: helping you remember to pay your bill. If you’re like most Americans, according to a Consumer Action survey published this January, you prefer to pay electronically. Why wouldn’t you want to be notified of your bill in the same place you pay it?
2. Driver’s education
Although some states require it for new drivers – which, by the way, should net them a discount — driver’s ed isn’t only for your teenage son. Because it reduces your driver risk, many insurers are willing to cut you a break when you formally review the rules of the road.
Beware that some insurers place age- and course-specific restrictions on this discount. Some insurers insist on their own programming, though they offer it for free to drivers under 25.
If you’re over 25, ask whether the insurer would accept a third-party certification, which typically requires classroom or online instruction as well as in-car practice. Sitting in class might not appeal to you, but saving 10% to 20% on your insurance premium probably does.
3. Paying upfront with an electronic funds transfer (EFT)
Snagging car insurance discounts don’t have to be complicated. Simply paying for the entire coverage period at once should net you a few percentage points back. To receive a paid-in-full credit, some insurers insist you pay with an electronic funds transfer, while others break it out into a separate discount.
Paying in full with an EFT can also net you two “discounts” your insurer may not tell you about: First, some insurers add a surcharge to credit card transactions, which adds to your monthly payment.
Second, paying in full locks in your rate for the annual or semi-annual term. That means an insurer can’t suddenly raise your premium if, say, hurricane results in a huge number of claims.
4. A vehicle anti-theft system
Your insurance company doesn’t want your car to be stolen just as much as you do. If your car is equipped with one of several theft-deterrent systems, be sure to share that information. Some deterrents are GPS-based recovery tools, while advanced systems like GM’s OnStar can actually slow the vehicle down if the thief leads police officers on a chase.
The best part of this discount? Especially if you have a new car, it doesn’t involve any inconvenience on your part. You might save as much as 10% to 20% simply by speaking up. Aftermarket systems cost between $199 and $499, which may or may not be worth what you’d save on your annual premium.
5. Continuous coverage
If you’re trying to save money, it might be tempting to go a couple of months without auto insurance. Don’t take the risk. If you get in an accident, you could face fines, lose your license, or even go to jail.
What’s more, coverage gaps cause you to pay more when you do re-insure by rendering you ineligible for continuous coverage discounts. If possible, set your old policy to expire the same month your new one starts.
If that isn’t possible, call your prior insurer to request cancellation (and a refund, if you paid in full) as soon as the new one takes effect. Paying on two policies at once will quickly eat through any discounts you managed to secure.
The bottom line on auto insurance discounts? It never hurts to ask. Insurance is an incredibly competitive industry. You might be surprised at how far discounts can drop the figure you’re first quoted.
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