If you’ve just purchased your first car, it might also be the first time you’ve been in the market for car insurance. This necessary purchase can add up to a major expense if you don’t know how it works – and how you can save money. If you’re not sure where to start, learn more with this beginner’s guide to saving money on car insurance.
Understanding Your Coverage
It’s important you understand what types of coverage are legally required in your province for a couple of reasons. First, failure to properly insure your vehicle could result in a fine of up to $50,000, a license suspension, and vehicle impoundment.
In addition, you could save money on your insurance by dropping unnecessary coverage. For example, it could be more expensive to buy collision coverage for your older car than it would be to just replace it if you were in an accident. In that case, dropping your collision coverage and putting your money towards saving up for a new vehicle might be the right option.
Factors Affecting Your Insurance Rate
Your insurer will calculate your premium based on a variety of factors, some of which you’ll be able to control so you can secure a lower rate.
Your personal driving history is one of the most important factors affecting your insurance, so maintaining a clean record is vital to keeping your premium low. A few speeding tickets can double your rate, and more serious offences, like driving under the influence, could void your policy.
The make and model of your vehicle will also affect your insurance rate, so it’s something to keep in mind when buying a new car. For example, models with a higher safety rating will be cheaper to insure, and models that are frequently stolen will be more expensive to insure.
Finally, your demographics matter when calculating your rate, including age, gender and where you live. You might be surprised that some insurers will even lower your premium if you get married or retire – so it’s important to communicate any changes to your insurer.
Changing Your Payment Plan
Did you know that a simple change to your payment plan could save you up to 9 percent on your overall cost of insurance? Ask your insurance provider if there is a discount for paying your premium in one lump sum at the beginning of your term, rather than in monthly installments.
Also, agreeing to a higher deductible – the amount of money you agree to pay if you were to make a claim – could result in a lower monthly premium. This way you’ll save money in the long run even with a higher deductible. If you choose this option, make sure you have enough money in the bank to pay your deductible if necessary.
Choosing the Right Insurer
The most important way to save money on your car insurance is to choose the right provider. Different insurers will offer different prices and plans, even for the same car and driver. This means that you need to review quotes from multiple providers before purchasing your policy. Luckily, there are many websites that will allow you to quickly and easily compare multiple options – meaning there is no excuse for not doing your research.
When checking out your different options, keep in mind the factors mentioned above. Are you willing to go with a slightly more expensive option if it means better coverage? Do you qualify for any discounts with each insurer based on your demographics? Will one insurer offer a discount for an annual payment, but another won’t?
The more you know about your insurance coverage, the better you’ll be able to understand your options and choose the best policy for you and your car. As an added bonus, you’ll also know how you can save money on this necessary expense.