Auto insurance is a legal requirement in nearly every state, but you can cover your vehicles without it costing you an arm and a leg. Smart budgeting and shopping are the keys to finding a policy that gives you the indemnity protection you need, passes legal muster in your jurisdiction, and fits within your household budget. Not sure where to start? Whether you’re eyeing a policy for a newly purchased vehicle or you’re considering a switch to gain better savings, following some useful tips can help keep a bit more green in your wallet.
Understand Your Monthly Budget
According to CNN Money, your auto-related costs will likely make up around 10 to 15 percent of household expenses. That includes your car payment, periodic maintenance, and vehicle insurance, which on its own can total between 5 and 12 percent of your automobile’s total purchase price. It’s wise to perform some calculations and figure out your absolute spending limits before you start shopping.
Buying a New Car? Do Your Research
If you’re purchasing a new vehicle, pay attention to the make and model you buy. CNN Money advises selecting a make and model with a good safety record and a low theft rate to score lower insurance costs. Trends are always changing, but a June 2017 NerdWallet article reveals the most commonly stolen vehicles. You’ll notice that many of the cars on the current list are greater than 10 years old. Also, keep in mind that newer model years are less likely to be totaled by your insurance company than older vehicles should you end up in a serious crash.
Bundling Policies Could Save You a Bundle
You’ve probably heard that it’s a smart idea to buy multiple types of insurance from the same company. That’s because many insurers offer multi-policy discounts to reward you for doing business with them. The most common savings come with bundling auto with homeowner’s or renter’s insurance, or covering all your vehicles to get a multi-car discount. Talk to your insurance agency to discover what discounts may be available.
Many factors impact how much you’ll pay for auto insurance premiums, such as the crime stats for your neighborhood and your gender, age, credit history, and driving record. However, these costs aren’t completely out of your control. You should know your budget, and shop for a vehicle with a great safety record and low theft rates. Meanwhile, don’t forget to check out bundling options such as home with auto or multi-vehicle discounts. These wise moves can help you save on your premiums and get the best coverage for your car.