10 ways to lower your Car Insurance Rates

Insurance rates are based on formulas that estimate your risk of causing accidents at any given time. Therefore to lower your premiums, you need to simply to lower your perceived risk of being involved in accidents.  Here are 10 tips that can help you to lower your premium rates.

1. Change your Car Model

In relation to the car model, the following factors are considered in calculating insurance rates:

  • Crash test rating – a car with good crash ratings considered safe thus lower rates.
  • Cost of the vehicle – expensive cars will cost more in insurance.
  • Cost of spare parts- cars with readily available cheap spare parts will cost less in insurance.
  • Horse power-weight ratio – stable cars are safer.
  • Carjacking rates in relation to the specific model.

Your insurance company should not have a problem in sharing how each of the above car-model- related factors affect your rates.

2. Pay in one Installment

Most insurance companies are flexible on when and how the client should pay the rates. You will get discounts if you pay in a single installment compared to when you pay in monthly installments. If you pay in a single installment and then decide to change insurers along the way, your current insurer will give you a refund.

3. Cut your Miles

If you spend less time on the road, your accident risk level is lowered marginally. If you cut the miles you travel everyday, your insurance rate will be reduced. You can do this by moving closer to your workplace or working from home for a couple of days a week. Information on how much you save by reducing the miles travelled can be provided by your preferred insurer.

4. Improve your FICO Score

Good financial management skill is related to responsibility even on the road. Prove good financial management skills to your insurer by improving your FICO score.

5. Install Safety Devices

More often than not, anti-theft systems as well as other safety features in your car will get you a discount from insurers.

6. Have all your insurance needs catered by one company

Insuring with one company may end up saving rates on all your policies such as home, life, health, personal accident cover, auto insurance among others.

7. Be loyal to your Company

The cost of “buying” a new customer is high and ever increasing. Insurers would want to reduce this cost by giving discounts to its loyal customers.

8. Evaluate your Current Policy

Look at your current policy and decide if meets your needs. If you are being covered for risks that do not apply to current situations, then lower your level of your insurance.

9. Shop and buy your Policy Online

Buying online not only gives you a chance to compare different quotes but also attracts a discount from the insurer. This discount is due to the fact that processing a policy online is cheaper than doing it manually.

10. Drive Safely

This is probably the wisest move if you want to lower your insurance rate. Insurers will look at your safety record on the road to as far as 3 years back. Needless to say, good safety record attracts lower rates.