How to save over $1,000 a year on auto insurance

My first new vehicle was a red Jeep Wrangler Bigfoot Edition. It. Was. Tall. My auto loan required me to get car insurance within a few days.

Nervous and worried about the time crunch I called the first company in the yellow pages I found. I bought insurance that was $260 / month. The insurance was more than my $250 / month Jeep payment.

Please don’t miss these tips and be one of those people that wish they had listened sooner and done this. I wish I had this information years ago!

You could potentially save $1,000 or more per year on your auto insurance by following these tips. Wouldn’t that be sweet?

1. Shop around for a new provider

Some people go years and years and never check their coverage or shop around for lower rates. When was the last time you shopped around for better insurance rates?

Car insurance is very competitive. You’ve seen the t.v. ads, right?

Are you in good hands?

15 minutes could save you 15% or more?

Your credit score, your education, what you do for work – they all factor into your insurance rates. The differences you can find between insurance carriers may be more than double for the exact same coverage for the same person.

You could save $100 or more per month just by spending 15 minutes by shopping around.

You can shop online to compare rates and get free quotes at:

Avoid poorly rated insurance companies

While you shop around price is not the only thing you should consider. A highly-rated insurance company is also important.

If you are with a highly ranked insurer and you find a quote that isn’t much less from a lower rated company, stick with the better company even though it costs more.

According to Consumer Reports, the top insurers are

  1. Amica Insurance
  2. USAA Property & Casualty
  3. New Jersey Manufacturers Insurance Company
  4. Auto-Owners Insurance

The lowest rated auto insurers in the country are

  1. Allstate Insurance
  2. Farmers Insurance
  3. Travelers
  4. Metlife Auto & Home

Ask your existing insurer for a discount

If you’re happy with your current insurance company but find a lower offer from another insurer, ask your current insurer to match the deal you found.

If they’re smart, they will match the rates to keep you as a customer.

If they aren’t, it’s time for you to change and save some money.

2. Raise the deductible on your auto insurance

How much should you have for a deductible?

First you need to make sure you have enough money in your emergency fund to cover the cost of your deductible in case of an accident. If you haven’t started your emergency fund, it doesn’t make sense to increase your deductible to amount you don’t have readily available.

For the best savings on auto insurance, a deductible of $1,000 will allow you to have lower premiums.

Additionally if you get in a minor fender-bender your better off paying out-of-pocket. If you make a claim for a small amount to your insurer your rates will probably increase. Having a higher deductible avoids you submitting small claims.

3. Drop collision insurance

When is the last time you checked your auto policy for what types of coverage you have?

If you are driving an older car or a junker, consider dropping the collision coverage. The general rule is if your car is worth less than 10 times the annual collision and comprehensive insurance you’re better off dropping the insurance.

If your car is in an accident, the cost of repairs would probably exceed the value of the car. The insurance adjuster would declare the car a total loss. After your deductible, you wouldn’t collect an amount equal to your payments.

4. Use one insurance company for your autos and residence

By keeping your home/auto/renters insurance with one company, you’ll get a 10–20% discount.

Question: Have you tried shopping around for insurance lately? If so, please share your results in the comments below.

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