Usage-Based Insurance Discount
Your provider may lower your monthly premium if you opt into a telematics insurance program. Also known as usage-based insurance, these programs use plug-in devices or providers’ mobile apps to track your driving habits while you’re behind the wheel. Many programs track your speed, how hard you brake, how long you drive and more. Depending on your driving, some programs may increase your premium.
Drive Safely
The best way to pay less for car insurance is to drive safely. Insurance costs for motorists with speeding violations or DUI convictions are much higher than rates for drivers with good driving history. Make sure to always go the speed limit, be aware of your surroundings and limit your phone use while driving.
Drop Unnecessary Coverage
Reducing your coverage is a great way to bring your car insurance premiums down. If you have an auto loan or lease, you’re likely required to carry both comprehensive insurance and collision coverage. However, if you own your vehicle outright, you can drop these coverages to significantly reduce your insurance costs.
If you have an older vehicle, maintaining comprehensive and collision coverage could be a poor investment. If your annual premium is more than 10% of your car’s total value, it’s definitely time to consider going without these types of policies.
Improve Your Credit Score
If you have poor credit, you’ll likely pay a lot more for car insurance coverage than someone with good credit. Work to improve your credit score and your car insurance premium will decrease.
Ways To Boost Your Credit Score
It takes time and consistent effort to raise your credit score.
The following tips will help you improve your standing with the major credit agencies:
- Read your credit report. Accessing your free credit report at AnnualCreditReport.com is a great way to understand the issues that are dragging your credit score down. Although this report won’t show you your actual credit score, it’ll give you valuable insights for improving your overall financial health.
- Pay bills on time. Setting up automatic payments is one of the best ways to avoid the damages late fees can have on credit.
- Create payment plans. Some creditors may let you set up payment plans if you’ve fallen behind. This is an excellent way to show that you’re responsible and serious about shoring up your financial situation.
- Limit new credit applications. Every time you apply for a new credit card or loan, it triggers a hard inquiry into your finances. If you have several of these inquiries in a short period, it can make lenders view you as a bigger risk.
- Keep old accounts open. Even as you pay down debt, it’s a good idea to keep old accounts open. When you close a credit card, it brings down the average age of your accounts and raises the percentage of available credit you’re using.
- Maintain low credit utilization. It’s best to use as low a percentage of your available credit as possible. Reduce spending on credit cards and work on paying down your balances if you’re using more than 30% of your credit limit.
- Use various types of credit. Having multiple types of credit is good for your overall score. As long as you make payments on time, having a secured credit card, mortgage and auto loan helps your financial standing.