Ten insider tips to saving money on your auto insurance.
Auto insurance rates are anything but insignificant for the vast majority of drivers, but there are ways to spend less on the coverage you need.
1. Choose a car with the insurance costs in mind
The car you choose to drive is a factor in what you pay for car insurance; some simply cost more to insure. Is the car more likely to be stolen? Is it more expensive to repair? How well does it protect you and your passengers if involved in a collision? The answers to these questions are all taken into consideration and your insurance rates will reflect it.
2. Review your coverage options each year
Each year, review your optional coverages with your provider to make sure they still make sense to keep. For example, if you drive an older car how much exactly are you paying for collision coverage? Comprehensive coverage? And, given the value of the car (and the deductible) does it still make sense to have these optional coverages? Another example is the optional "Rental Car" coverage. If you no longer rent cars as much or perhaps have coverage available through your credit card, then maybe it’s time to remove this from your policy.
3. Increase your deductibles
If you’ve got collision or comprehensive coverage on your policy, consider increasing your deductibles. It could save you five to 10 per cent on your auto insurance premiums. Don’t raise them so high though that should you need to submit a claim you’ll be tight on money.
- Related Read: Five Changes That Can Lower Car Insurance Rates
4. See what discounts are available
Don’t be shy, it’s your money. Ask your insurance provider for a list of discounts because you never know what you mind find. Change your tires seasonally? Some insurers offer a Winter Tire Discount that can save you about five per cent off your premium. Have a smarty pants in the family? There’s the Good Student Discount that may be available. Is your child away at college or university? If they only drive the car when home visiting, some insurers offer a Student Away At School Discount.
- In Ontario, as of January 1, 2016 all Ontario car insurance providers must offer a winter tire discount. Make sure your insurance provider knows about your winter tires to take advantage of the discount.
5. Bundle your policies
Is your home (tenants or condo) insurance policy with the same insurer who covers your car? Insurance companies often offer clients who have more than one policy with them a discount on one, or even sometimes both, policies. The discounts can range from five to 15 per cent.
- There are other insurance policies that could qualify you for this discount; it doesn’t have to be a home and auto combination. Depending on the insurer, an insurance policy for your motorcycle, RV or snowmobile could even qualify you for the multi-line discount.
6. Pay your premiums all at once
How do you pay your premiums? If you pay your premiums monthly chances are you end up paying more than drivers who pay their premium in one lump sum. The reason is because many companies charge a little extra to cover the cost of administering payments every month, so if you can pay your premiums in full you'll avoid these pesky extra fees.
7. Consider a usage-based insurance program
You may not know what usage-based insurance is exactly but chances are you’ve heard about it. It typically involves a device that you plug into your car. The device monitors your driving habits, things like acceleration, braking, and when and how often you drive. If you join a usage-based program you can typically save five to 10 per cent just for signing up, with additional savings of up to 25 per cent for good drivers. The device itself is free and the information gleaned from it can only help you lower your rate; it cannot be used to increase your premiums.
8. Encourage the young drivers in your family to take a driver’s training course
The cost of a driver’s training course for young drivers is often recouped in the first year of having car insurance, and typically benefits new drivers (so long as they don’t get any tickets or are involved in any at fault collisions) for three years. It’s well worth the investment.
- Ask the Expert: How much does a driver’s training course actually save on car insurance?
- Related Read: Driver’s Training: Is It Really Necessary? [INFOGRAPHIC]
- Related Read: Five Tips For Getting The Most Out Of Driver’s Training
9. Drive safely
Your driving record is a driver in determining your car insurance rates. Tickets and at fault collisions add up quickly and could end up costing you hundreds, if not thousands, of dollars in extra premiums over the years it takes to clear them off your driving record.
- Related Read: Expensive Errors--Five Costly Driving Habits
10. Shop around
Chances are you’ll see the biggest car insurance savings by shopping around because rates often change and the provider who offered you the best premium last year, may no longer offer you the best deal on car insurance this year. There are a few key times you should compare your rates:
- Renewal time
- When your marital status changes
- When you move or buy a new car
- When adding new drivers to your policy, like teens
- Your driving record changes (e.g. tickets or collisions)
- You change jobs or retire