Auto insurance may seem like a burden – both of one’s time and one’s pocket – but is a necessity. Many consumers do not give adequate attention to buying auto insurance, if they do at all. However, careful selection of the insurance provider can go a long way in saving money.

Broaden your Options

You should always look around^[1] when it comes to auto insurance. With a plethora of providers in the market, along with intense competition, you may be surprised to see the large variation in premiums that companies charge for the same make and model.

Consumers can target companies that sell through their own agents, companies that sell through independent agents, and companies that sell directly to customers for quotes. It is also important to note that cheapest does not necessarily mean best.

Increase your deductible

When buying auto insurance, there is a mandatory deductible that is charged to all customers. Deductible^[2] is the amount of damage which the customer would pay for himself post which he can claim the insured amount to the tune of the damages. This mandatory deductible is usually a small amount. However, customers have a choice to increase this deductible. By doing so, they can decrease their insurance premium.

Given that a small voluntary increase in the deductible can take care of minor damages to the vehicle, not raising it is tantamount to buying insurance that one does not need.

Maintain a Good Credit History

While a good credit score is essential in securing a loan, it can help in reducing insurance premiums as well. Apart from banks and financial institutions, insurance companies also use credit information to provide a quote for auto insurance. This is so because some studies have shown that consumers who maintain a good credit history tend to make fewer claims than those who have a poor credit score. The potential of making lesser claims than others leads to companies quoting a lower amount for the same insurance cover than they would for others.

Car Features can Impact Insurance Premium

Not only can one’s credit and claim history impact the insurance premium, the vehicle in question can also have a bearing. A car which has a higher safety rating will require a lower premium than others. Thus, when buying either a new or used car, it is important to consider options (in the same vehicle segment) which are deemed to be safer if one intends to pay lower auto insurance than otherwise.

Make Use of Discounts

There are certain discounts^[3] that one can make use of in order to reduce the outgoing auto insurance premium. For instance, if there is an anti-theft device installed in the vehicle, insurers tend to ask for a lower premium than otherwise. There are also discounts on being a member of automobile associations and also if one belong to a certain profession that is considered ‘safe.’ Some insurers may also offer a no-claims bonus.

Keep a check on Add-on Covers

While getting a ^[4] for auto insurance, a provider may ask you to add covers to your policy like accident insurance, road side assistance, engine protection, and protection for electrical and non-electrical accessories, apart from others. While adding a few of these covers may make sense, too many add-ons will just keep adding to the premium amount. Thus, choose only those add-ons that may make sense to you to reduce premiums.

^[1] https://www.iii.org/article/how-can-i-save-money-auto-insurance

^[2] https://www.cnbc.com/2017/04/22/five-ways-to-save-more-on-car-insurance.html

^[3] https://www.thepennyhoarder.com/life/ways-to-save-money-on-your-car-insurance/

^[4] https://www.kbb.com/car-advice/articles/10-ways-to-save-money-on-auto-insurance/