The cost of car insurance can seem a very inexplicable thing; you could take out a particular policy only for a friend to reveal that they are paying much less for effectively the same kind of insurance. What is their secret? Well, it could be one of the following obscure facts about how car insurance costs can be trimmed – sometimes significantly. Read and absorb these little pearls of wisdom, and you could end up as that friend who reveals how surprisingly low their insurance costs are.
Allow your insurer to see how well you drive
As a general rule, the less of a risk you appear to pose on the road, the less that an insurer will charge you. However, in a typical situation, there are rather limited means by which an insurer can discern how safely a customer of theirs really does drive. That insurer can't, after all, always be sat in the car whenever that customer drives and then judge, from there, how risk-averse the driving is.
Numerous leading insurers have circumvented this problem by introducing what have been referred to as “telematics” programs. Sign up for one of these, and you will be given a piece of electronics that can sense and record how safely you drive. It could collect data about, as Fortune reports, your speed and braking; that information can then feed into improving savings.
Stick to used, rather than new, cars
If your teen has passed their road test and now wants to regularly use your car, there's good reason to be concerned about the implications for your insurance costs. Teens are pricier to insure than adults because they have many more accidents.
Of course, it isn't strictly inevitable that your car, with your offspring inside, will indeed end up involved in an accident. However, you can still help lower your current insurance obligations by allowing your teen to drive a car that is used instead of brand new. In this situation, if the vehicle does incur accidental damage, the loss to you will be less expensive.
Good things don't always come in small packages
One myth recalled by Yahoo! Finance is that a smaller car typically brings a smaller insurance bill. However, there are good reasons why compact vehicles can actually be more, not less, risky. For example, the materials from which they are made can be relatively low in quality.
Therefore, should one of these cars collide with something else, they could incur especially heavy damage. Also remember that, if the car is hitting a bigger vehicle, the latter could easily be heavier and, therefore, likelier to inflict damage on the smaller vehicle than the other way round.
Consider taking out short-term or temporary insurance and shopping around
If you have access to a car but use it at infrequent and sporadic intervals, then opting for a year-long policy could be financially wasteful. A much more cost-effective alternative could be short-term or temporary insurance; this can be left in place for anywhere between 1 and 28 days at a time.
This kind of insurance could strongly appeal if you don't actually own the car, but instead occasionally borrow it – for instance, to go on vacation or meet up with a geographically distant relative. Companies through which such insurance can be obtained include the United Kingdom-based Call Wiser, a broker that can, for each of its customers, quickly compare various policies to find one representing especially good value.
If this isn't an option for you, your next best bet is to shop around for a new policy every year as rates frequently change. Compare car insurance policies, rates, and even companies to ensure you're getting the best deal.
See if you are eligible for a “distant driver” discount
The subject of your teen possibly using your car for the first time has already been brought up. Nonetheless, if – shortly after they are added to your insurance policy – they are preparing to set off for college, you could soon be eligible for what has been called a “distant driver” discount.
This price cut is largely self-explanatory; it applies at times when one of the policy's drivers is a significant distance away from the insured car. Usually, however, that driver has to be a hundred-mile distance from both their non-semester home and that car for the policy to be valid. Through diligently researching, you could soon uncover even more methods for saving insurance costs.
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