3 simple steps to save money on auto insurance
Let’s face it, we love and need our automobiles, but they aren’t cheap to operate. The average family spends over $500,000 over a lifetime to maintain two cars. About $50,000 of this can go into auto insurance. Fortunately, there are a few steps you can take to reduce this cost:
1. Shop around. It’s easy to get a quote on the web from companies like GEICO, AIG and Progressive. You can switch or share this quote with your current insurance company to see if they are willing to give you a discount.
2. Raise your deductible. The deductible is the amount of money you pay out of pocket for each accident. Raising the deductible to $1000 or whatever you can afford can cut your insurance costs by 25%. With some companies, it’s not worth your time to make small claims as they can cause the cost of insurance to rise.
3. Get rid of collision and comprehensive coverage on older cars. These types of coverage only cover damage to your car by collision and by other events, like a tree falling on your car (this is why it is called comprehensive). The payout is what your car is currently worth, so if your car is only worth, say, the deductible plus ten times the premium for these coverages, consider dropping collision and comprehensive. Edmunds.com can give you a rough idea of how much your car is currently worth.
