The following is a guest post from Carol Montrose. She shares how you can save on your auto insurance needs.
How to Cut Costs on Car Insurance
No matter what type of car you own, you are likely shelling out more than a few clams for insurance coverage. But with the global recession stretching into a third year, you may be starting to think that you’ve exhausted your resources when it comes to tightening the belt. You’ve stopped dining out, you cut back to basic cable, and you even remember to turn off lights and electronics when you leave a room (if only your parent could see you now!). But with yearly bonuses and raises becoming nothing more than distant memories at this point, and more companies looking to lay off employees rather than increasing head count, you might be scrambling to find even more ways to cut back on your bills. And one area that you may not have considered is car insurance.
You might be wondering how this is possible when you are still paying off a car loan (since the bank requires you to have a full-coverage insurance policy). But even if you can’t reduce your coverage you can realize some amount of savings. For one thing you can increase your deductible, which should lower you monthly payment. Of course, there’s an even better way to secure a reduction on your rate and that’s by getting a different car.
The higher the value of your automobile, the more you’ll pay for insurance. This is because your provider is basing your rate on what they might have to pay out in the event of an accident. This is also why your rates go up when you get tickets, since you are at higher risk for having an accident when you fail to follow the rules of the road. In any case, you may want to talk to your insurance provider in order to ascertain the bracket of car value you’d have to be in to get the insurance rate you want to pay. Then you’ll have to think about getting rid of your current car in order to downgrade. Remember also that sports cars, convertibles, and most two-door vehicles are going to come with higher rates.
Finally, you may be able to reduce your insurance payment by installing a theft-recovery system like Lo-Jack in your car. Since this early-warning system often leads to swift retrieval of a stolen vehicle, resulting in far less damage (and payout for your provider), you might see a good deduction in your monthly bill by adding this security measure. Just make sure to call your provider first as some companies do not offer any compensation for this extra.
And of course, once you have paid off your car loan and the title is in your hot little hands, you can switch to a plan with less coverage, such as liability (which is the standard minimum mandated by law in most states). If you really want to cut back on car insurance, though, you should think about scrapping it altogether. Disclaimer: this is not a call to drive without insurance! Rather, you should consider relying on public transit for a while, registering your car as “non-operational”, and cancelling your insurance policy until such time as you can afford it again. It’s not ideal but it will sure save you a ton of money.
Carol Montrose is a writer for The Truckers Report where you can read the latest trucking news, speak with other truckers in the international truck forum and freightliner forum, or learn more about engines like the Cummins ISX.