Budget creep happens when monthly expenses slowly go up over time, without it being noticed. Then, before you know it you’re paying much more for the same thing you’ve had for years. Or, perhaps the cost for a particular service remains fairly static, but you miss out on a more cost-effective alternative simply because you haven’t done the research. Often, this is the case with car insurance.
You are legally required to carry insurance for your vehicle, but this doesn’t mean you should overpay for your coverage. The monthly premium your insurance provider charges is a recurring expense that will impact your budget, so it’s important to look for an affordable option.
It is possible to purchase the kind of coverage you need, protect your vehicle, and save money if you take the time to shop around and select the right provider and policy.
Start by finding out more about how much insurance you’re required to carry. There are laws specific to each state regarding how much coverage you need.
These steps will help you find a more affordable policy for your vehicle:
- Consider raising your deductible. This means you’ll have to cover a higher out-of-pocket expense if you get in an accident, but your monthly premiums will be lower. Just be sure you always have enough set aside in your emergency fund to cover the deductible.
- Drive less. Obviously, this isn’t a viable option for everyone. But, if you are able to reduce the miles you drive, let your insurance provider know if you drive less than the average individual, use public transit to go to work, or carpool. Some insurance providers will grant you a discount, since driving less means you’re less likely to get in an accident.
- Have some clauses removed from your policy. Are you over insured? Perhaps your policy made sense when the vehicle was new, but now that it’s older you may be able to lower the level of coverage you have. Go over the policy you’re interested in and ask your insurance agent to make a few changes if there is more coverage than you need.
- Update your coverage regularly. The value of your vehicle will drop over time and you might find that you’re paying for coverage that exceeds the value of your vehicle if you don’t upgrade your policy regularly.
- Bundle your policies. Most insurance providers will give you a discount if you insure more than one vehicle with them or buy a homeowner’s or a renter’s insurance policy when you insure your vehicle.
- Be a good driver. You can usually earn a discount if you have a good driving record, but you might have to contact your insurance provider and ask for a discount. Some insurance companies will give you an additional discount if you complete a driving class.
- Improve your credit score. Some insurance providers will calculate your premiums based on your credit score. Work on improving your credit and contact your insurance provider to ask for a discount once your score goes up.
- Choose a vehicle you can afford. If you are in the process of buying a new car, compare the average price of an auto insurance policy for different vehicles to find one that’s a good fit for your budget.
- Shop around. The premiums and discounts offered vary from one auto insurance provider to another. Take the time to request quotes and to compare your options before you purchase insurance.
Combine all these tips to find an affordable policy to insure your vehicle. Ensure the policy you purchase meets legal requirements and provides you with enough coverage to replace your vehicle if you get into an accident.
Don’t hesitate to talk to your insurance agent to find out more about the different discounts you might qualify for or to simply ask for a discount!