If you’re proactive in your search for cheap car insurance, then there’s some good news. You will save money and reduce your premiums.
The worst thing you can do as a consumer – is nothing.
Every year car insurance companies increase the overall level of premiums. However what might come as a shock, is that long-term, loyal customers are the ones that get their premiums hiked more than new customers.
And there’s a good reason for this. As a long-term loyal car insurance customer – a good portion of your premiums go towards paying for the company to obtain new customers.
So if you feel like you’re getting a raw deal on car insurance, then the reality of the situation is that you probably are. Many insurers are so desperate to get your business that they claim they will beat any competitors quote. Assuming you know what you need, that’s a great way to make sure you’re paying rock bottom prices for your car insurance.
So now that you know you need to be actively seeking out the best deal each year and not automatically renewing, what else can you do to reduce your car insurance premiums?
Reduce your Excess
Most insurers will let you set the level of excess that you pay in the event of a claim. Just because the quoted price is $500, doesn’t mean that it’s going to be in the long-term best interest for you to stick with that rate.
If you consider yourself a safe driver, then you could think about increasing your excess to $1000 or more. For the most part, it’s not often worth making a claim for minor cosmetic damages that happen with the daily use of your car.
If you make a small claim, then you’ll not only lose any no claim bonus, but you’ll also be forced to pay higher premiums.
Again it comes down to your personal circumstances, however, if you’re just looking to insure your car against a major accident, then it’s a far better option to increase the excess that you’ll have to pay and save on premiums each year.
No Claim Bonus
As previously mentioned, your no claim bonus can either be a trap or a real benefit to you.
A no claim bonus is simply a discount that you receive on your premiums, for not having made a claim in a number of years. A no claim bonus can potentially save you a few hundred dollars each year.
However, there are a few things you need to watch out for. Some companies offer no claim bonus protection. If you do need to make a claim, then your no claim bonus remains intact, however, you’re getting charged a higher premium for the privilege of that added protection.
In this case, you need to weigh up whether it’s worth the added increase in premiums to warrant the extra protection.
Also just because you’ve got a no claim bonus in place, don’t think you can’t change insurance companies. It’s still worth checking around with other insurers as you might find that even with a no claim bonus, you’re able to get a cheaper rate elsewhere. Some might even match your current no claim bonus.
If you’re looking at car insurance, then you more than likely might need home insurance, home contents insurance or even pet insurance. If you bundle your insurance together then you might be able to negotiate a discount.
Not all insurers will provide a range of insurance products, but again there’s no harm in asking.
Don’t wait until you’re sitting at the dealership
If you’re in the market for a new or used car, then you will likely want to take out a new car insurance policy. However, a common mistake is getting your insurance from the dealer.
Like most things at a car dealer, you’re going to be paying well over the market rate for the same level of insurance that you could easily get elsewhere. What you should do, is be prepared and think ahead.
If you know what make and model you’re going to be looking at, then it’s in your best interest to look around before you buy.
A lot of new car buyers get nervous at thought of driving their brand new car out of the dealership are they hastily sign on to the first policy the dealer hands them.
However, if you know what you want and you’ve done your research you can quickly take out a new policy in a matter of minutes. Most insurers also have a 30 day cooling off period, whereby you’re able to cancel the policy (unless you’ve made a claim) even if it’s paid for.
That means that you can be covered from the moment the dealer hands over the keys.
Choose your Drivers Carefully
It’s common knowledge that young, male drivers are likely going to be paying higher premiums than their older, female counterparts.
If you’ve got a family policy of even one that requires that you list the drivers (most do), then if for example your kids only occasionally use the vehicle, consider leaving them off the official policy.
You’ll likely see a reduction in premiums if all the drivers listed are older.
However you need to watch out for a few things – some insurers won’t cover drivers that aren’t listed on the policy. Again this comes down to simply reading the PDS or asking when you take out a policy. More often than not, it’s the car that is insured and not the actual driver.
You might also be faced with higher excess, in the event you make a claim if the driver isn’t listed on your policy. If a young, restricted driver, is forced to make a claim, then you will likely get slugged a higher level of excess.
However, it’s just a matter of comparing the two options and seeing what’s right for you. More often than not, the increased excess will only be a few hundred dollars and you might just save that much over the course of a year, with reduced premiums.
Keep your Car Safe
Where you park your car the majority of the time, contributes to the levels of premiums that you will end up paying. If you live in a suburb where the crime rate is low then you will probably get offered a cheaper premium.
However, if your suburb is less than ideal, you might want to consider parking it off the street.
Cars that are housed in garages will get lower premiums than those that parked on the street. Street-parked cars are more likely to get damaged or even stolen and as a result, attract a higher premium.
If you don’t ask, you don’t receive
Remember the key to cheap car insurance is to always ask. Don’t blindly have your insurance premiums directly debited out of your account each year.
It’s up to you to actively compare your insurance every year. If you do, in the long run, you’re going to end up saving thousands of dollars.