Some of us are control freaks, especially when it comes to spending money. By using coupons and shopping sales, we can control how much we spend on food and clothing. By turning down the thermostat and switching to energy-efficient appliances, we can control our utility bills. And, by shopping smart we can control how much we spend on our cars. We can even control how much we spend at the pump by watching how and how much we drive.
But, there's one aspect of car ownership that seems out of our control: car insurance. You are required to have it, but deciphering what you get and why it costs what it does can be confusing. Is there any way you can take control?
As it turns out, there is. Check out these steps for taking control of -- and saving money on -- your car insurance.
1. Shop Around
When you get that first car, it's tempting to just go with the insurance company that your parents had. But, as nice as your mom and dad might be, just because they happen to work with a particular insurance company doesn't mean it's the best deal for you. Lots of insurance companies offer quotes online, which makes it easy to compare policies.
Shop around for insurance just like you would any other product or service. Even after you find a company you like, it makes sense to periodically check what others are offering -- especially if you've had some events in your life, like changing jobs or getting married, that may affect your rates. At the very least, shop around for insurance every time you get a new car. The difference in rates may surprise you.
2. Take on More Risk
A car insurance policy is basically a bet. You're betting that you'll get into an accident, and the insurance company will pay up. They're betting that you won't, and they'll get to keep collecting money from you without ever having to pay out. If you take on more of the risk -- that is, if you agree to pay more of the damages in the event of an accident -- you can lower your insurance payments.
For example, let's say you drive an older car that's not worth too much. Dropping your collision insurance can be a great way to save money because it will lower your insurance premiums. Just know that you'll be on the hook for damage to the car if you have an accident. But, since it's an older car, you could end up spending more on insurance than the car is actually worth, which doesn't make much sense.
Another way to save is by increasing your deductible. Your deductible is the amount of money you agree to pay in the event of a claim. If the costs are higher than that amount, your insurance kicks in. By raising your deductible, you lessen the amount of money your insurance company has to kick in if you have an accident. Before you raise your deductible, though, make sure you have enough cash on hand to cover your portion of the damages if you get in an accident.
3. Drive Less
Depending on where you live, you can save a lot of money on gas, as well as wear and tear on your car, if you take public transportation to work. But you can also save a lot on your car insurance. Many car insurance companies offer low-mileage discounts to drivers who drive less than a set number of miles each year. That's because the less you drive, the fewer opportunities you have to get in an accident. If you don't drive much, check with your insurance company to see if you can get a low-mileage discount.
4. Combine Coverage
Chances are, you have more than just a car to insure. If you combine car insurance coverage with your homeowners or renter's insurance, some companies will offer a discount. So long as the coverage being offered on both policies suits your needs, getting multiple policies from the same company can be an easy way to save some cash.
5. Ask About Discounts
If you don't ask for anything, you won't get anything. That's especially true for car insurance. There are discounts out there, but you need to ask for them. Some insurance companies offer discounts if you take a driver safety course, if you're a member of a group or association (like AAA), and even if you're a long-time customer. If you've never had an accident or ticket, ask about safe driver discounts. And, some companies even give discounts for good grades for teenage drivers in the house, or even drivers who are in graduate school.