Buying a new car can be stressful, but once you find the vehicle of your dreams, it suddenly becomes fun. That is, until you remember that you now have to find affordable insurance that will cover everything you want covered in case anything should happen to your new ride.
Many people don’t really know how best to go about shopping for vehicle insurance. So they too often end up purchasing plans that don’t offer enough coverage, cost too much, and simply aren’t adequate for what they need.
Don’t put yourself in this situation when you buy a new car; take the six tips below into consideration.
1. High-deductible plans
A high-deductible plan is a great way to save money if you have a healthy-sized emergency fund. But if you lack the cash on hand to pay for your deductible in case of an accident, you might not want to take this option.
High-deductible plans are less expensive up front, but the cost can be significant if you are involved in an accident with your vehicle.
2. Opt out of rental-car options
Most small rental cars are extremely inexpensive. Many rental agencies will let you rent an economy car for less than $15 a day. However, you’ll pay as much as $40 to $50 per year for your car rental option on your insurance plan. If you’re looking to minimize your monthly payment, don’t choose this option.
3. Know what you’re buying
Don’t assume that buying a family sedan will cost you less to insure than a big SUV. Too often, it’s just the opposite. Most insurance companies decide on the cost of your coverage based on the kind of damage your vehicle might sustain.
Since SUVs are bigger and generally safer, the cost to insure one might be a lot less than the cost to insure your little sedan. Of course, the cost to insure a convertible or sports car is almost always more expensive because they’re so small and easily damaged.
4. Pay in advance
If you can pay your premium in full every six months, do it. This is going to save you as much as $5 a month, which is the typical fee for insurance policies. It might not sound like big savings, but over time it represents $60 every year in auto insurance savings.
5. Drive safely
When you take the time to obey the law and drive safely, you’re going to have a much less expensive insurance policy. Safe drivers are far more likely to receive a smaller deductible, a better plan with more coverage, and a smaller payment than unsafe drivers.
Obey the speed limit, wear your seatbelt, and always use caution when driving. It’s the best way to make sure you stay safe on the road and keep your insurance premiums down.
6. Compare prices online
One of the best ways to save on car insurance is to compare quotes online. This allows you to see what a variety of different insurance companies are likely to charge, what they offer in each plan, and what you can get for your money.
Insurance is mandatory if you buy a new car and finance it. It’s not mandatory if you own your car outright, but it’s always a good idea. The cost of repairing a damaged vehicle that’s been in an accident can be extensive. Most people can’t afford to pay those fees, which is why insurance comes in handy.
However, you should never overpay or let yourself be underinsured. By comparing plans and rates, you can be certain that neither happens to you.