If you are planning to buy a car, you need to consider purchasing auto insurance for it. While it is albeit an expensive decision, the legal hassles for not carrying a policy are heftier. So, are there any ways to reduce car insurance costs?
Auto insurance is mandatory for all car owners in Canada. Whether you have a personal car or a commercial vehicle for your business, carrying a policy can help you in innumerable ways. However, it can be challenging to find a readily available affordable auto policy. The secret here is to make it cost less while providing near-full coverage to your vehicle.
This article will discuss some guidelines to lower your car insurance cost while making 0 dents on the policy’s utility. Meanwhile, if you are looking to gain more financial knowledge on how auto insurance works, Surex is the right place to learn about and to purchase your first car policy.
1. Raise Your Policy Deductibles
A deductible is an amount you pay from your pocket before your insurance claim kicks in. In Canada, deductibles are available for collision coverage and comprehensive coverage.
Increasing your deductible can help lower your premium rate. For example, when a company sees that you are ready to carry a major chunk of your car maintenance expenses, they will discount your monthly payments.
It is imperative to note that you can increase your deductible only when you:
- Can afford to pay higher deductibles
- Can drive safely to avoid road mishaps that call for insurance claims
2. Maintain a Clean Driving Record
Being an experienced driver can help you deter accidents and road-related risks. Before buying a vehicle, make sure you take professional driving lessons. Having a clean driving record can prompt insurers to discount your insurance premium based on your responsible steps.
As a potential auto insurance customer, your driving record speaks volumes about your driving habits. If you have:
- zero impaired driving charges
- zero parking violation tickets
- zero hit & run cases
It makes you a star customer with a lesser need for frequent claim submissions. This point alone can lower your premium rates. Hence, before looking for cheap policies, assess your driving history and train yourself on optimum road awareness.
3. Opt for an Affordable Vehicle
The cost of your vehicle is the prime factor that determines your auto insurance rates. If you have an expensive car, it may be more prone to theft, vandalism, and higher maintenance cost. Meaning, the insurance company is bound to charge you a higher premium rate.
However, if you own an affordable vehicle with minimal maintenance charges and theft risk, the premium can be less due to reduced expenses. Therefore, if you wish to cut down on your policy expenses, make sure you own a vehicle with lower maintenance charges.
Working with discount auto providers like Freeway Insurance can save you considerably.
4. Install Security Devices on Your Vehicles
Installing security devices can help make you a more responsible driver. Security installations for cars can come in handy when filing claims and help you stay safe during an accident.
For example, a GPS tracking system can help track down stolen cars or the location of an accident. Similarly, surveillance camera recorders with timestamps can help you provide concrete proof of road mishaps, especially if your vehicle sustained damages from a 3rd party.
In addition to being a responsible driver, installing such devices demonstrates to your insurer that you are a responsible car owner. It equates to you not needing frequent claim submissions as you know how to handle your vehicle’s safety. These reasons alone can lower your premium rates and make your insurance affordable to maintain.
5. Maintain a High Credit Score
A good credit score speaks volumes. According to Equifax, a good credit score in Canada ranges from 660 to 724. Anything higher is an excellent credit score and shows that you have a clean financial record.
It can be helpful to lower your policy rates. For example, if you have a high credit score, you can avail discounted premium rates on your auto insurance. The discount you receive is a sign of trust that you shall pay your premiums on time to maintain your insurance.
A high score reflects your prompt repaying habits and responsible spending history. So if you have a high score, insurers see you as a less risky investment.
However, if you have a low credit score, use the following tips to improve it before looking for insurers:
- Clear all your pending debts
- Try to pay your bills on time
- Purchase something cheap, and pay using your credit card
You can steadily raise your score and increase your chances of getting discounted premium rates.
6. Ask Your Insurer About EFT Payment Options
The EFT or electronic funds transfer system can deduct premium payments from your account and transfer them digitally to the insurance company. It is a nifty computer-based system that can help you pay your premiums on time. Many insurance companies reduce their rates if you opt for an EFT payment system to transfer your premium in installments.
7. Reduce Your Annual Kilometer Range
During the pandemic, it is quite probable that you were using your car less. This can be a fine point to update your insurer, as it helps lower your premium rate. Your vehicle’s annual kilometer count is listed on your policy.
By informing your insurer that you are barely using your vehicle, you can cut down on your premium payment rates for a substantial period. Doing so can help you budget during these financially straining months. However, once the pandemic recedes, make sure you update your insurer that you are back to using your vehicle to cover the same distance as before.
All in all, these 7 tips can make your car insurance more affordable while providing you with a plethora of coverage. As it is mandatory coverage for car owners, the best way to afford it is to reduce its premium rate.