We Millennials get a bad wrap for being irresponsible and killing industries. But all we really want is to get the most out of each dollar we spend. And if you’ve taken a look at your car insurance rates lately, you might be wondering if that’s even possible. If this sounds like you, read on.
Too many of us live in a world with strict and defined costs where you pay what people tell you to pay. But if you are reading this article, you are different. Maybe you know that everything is negotiable, and you’re totally comfortable with haggling and asking for discounts. But even if you’re not, we can show you how to get cheap car insurance, even as a much-maligned Millennial.
How is Your Car Insurance Rate Calculated?
Car insurance companies take several factors into consideration. A few of the main ones include:
- Driving history
- Type of car
- State/City of Residence
Even if we can’t change your age, there are still steps you can take toward getting a more favorable rate.
1. Be a Safe and Responsible Driver
Think about the consequences of breaking the rules of the road. You have a higher chance to get in an accident. You have to spend valuable time and money paying off speeding tickets. And of course, your insurance rates will be higher.
This one is a no-brainer. If you avoid running red lights and don’t get any speeding tickets, insurance companies will consider you a lower a risk. Less risk translates to cheap car insurance.
2. Become a Loyal Member of Your Insurance Company
Companies want to make money. They also always want new customers, but do you know what is better than new customers?
New customers cost time and money. They have to learn about a company, learn about the plans, and then compare those plans with other offers. Returning customers only have to do one thing: renew their insurance plan. Because of this, companies are willing to offer discounts to long-term, loyal customers. Once you’ve found an insurance company that meets your (and your wallet’s) needs, stick with them, if possible.
3. Use the Cheapest Insurance Providers
If you are going to become a loyal customer, you might as well choose the best provider possible the first time you get car insurance.
The Simple Dollar surveyed 250 insurance quotes from 50 states and found the three cheapest providers of car insurance. Here are yearly premium quotes from the survey:
Title tag: simple dollar insurance quotes
Alt tag: simple dollar insurance quotes
The leading providers are GEICO, Allstate, and State Farm. Of course, everyone will have a unique quote and may find different results.
4. Negotiate at 25 Years Old
Drivers at this age are considered to be among the safest. By this time, you should have a long enough driving history for insurance companies to judge your risk level from.
However, if you are not 25 yet, you still have other options for better rates:
Option A – Join your parents’ plan. Bundling your insurance with your parents’ plan can lower your costs because it disperses overall risk across each person on the plan. Keep in mind, however, that your parents might have to pay a higher premium as a result.
Option B – Get good grades. Many companies are willing to lower your rate if you are successful in school.
Option C – Shop around. As a young person, you are a prime specimen to milk money out of. No offense, but at this point, you are not as knowledgeable as someone who has already experienced the rigamarole of insurance. This is not to say insurance providers are trying to rip you off, but younger customers aren’t as likely to negotiate or take the time to shop around for insurance. Think twice before accepting a deal.
5. Buy a Safe Car or Used Vehicle
The type of vehicle you buy will affect whether or not you can get cheap car insurance. Is your car filled with safety features? Good, it can help you lower your rate. Does it have a powerful engine? If so, you will be considered a higher risk customer (and therefore have higher rates).
Also, keep this in mind:
If you buy a new car, then you are most likely taking out a bank loan.
Many auto lenders require borrowers to pay for a full-coverage insurance plan that covers the full cost of the vehicle. And if you’re buying a brand-new car, that cost is going to be quite a bit more than if you’re buying used. That translates to higher insurance premiums. If you have the money, that’s fine. But if you are trying to save, getting a bank loan for a new car might not be the best way to go. Instead, opt for buying a used car you can afford out-of-pocket.
Lastly, if you buy a fancy car, insurance companies will charge you higher rates because you are more likely to speed in this type of vehicle. Also, the vehicle is at a higher risk for theft.
Want cheap car insurance? Choose your car carefully!
6. Improve Your Credit Score
Beginning to see a trend?
The more responsible choices you make in life, the more leverage you have for negotiating cheap car insurance rates. This doesn’t mean that improving your credit score, getting good grades, or a paying your premiums on time will lower your insurance automatically, though. You have to bring them to your insurance company’s attention!
Improving your credit score is out of the scope of this article, but here are a few tips to get you started:
- Take out a prepaid credit card from your bank if you have bad credit.
- Never use credit unless you have the money in your bank account to pay it off.
- Pay your bills on time!
- Set up automatic payments on your credit cards (missing a payment hurts!)
- Find more advice about improving your credit score here.
7. Increase Your Deductible
You have a choice:
Pay more when an accident happens (higher deductible), but pay LESS on your monthly premium.
Pay less when an accident happens (lower deductible), but pay MORE on your monthly premium.
If you have the liquid funds in your bank to cover higher deductible costs, it could save you money on your monthly costs. But don’t do this unless you are sure that you can afford it in time of emergency.
8. Park in a Garage or Off the Street
Cars parked on the street are at higher risk for theft and other accidents.
A simple way to lower your premium is to park in a garage or off the street. Of course, this can be unfeasible for some people. Just keep this in mind. In the future, you might find yourself in a situation where this is possible, and it might be something to keep in mind if you’re looking for a new place to live. And just like many of the other items on this list, if you don’t show your insurance provider your parking information, you won’t receive the proper discount.
It can seem as if the insurance companies have us by the necks. Insurance costs a lot of money, but we’re legally required to have it. So we pay it and live our lives. But you have more power over your premium that you might have previously thought. Cheap car insurance is within reach.
Drive responsibly, get multiple quotes, and let your insurance company know about any behaviors that might make them consider you a lower risk. If you’re looking for a used vehicle that screams, “Responsible Driver,” check out the inventory at TRED. With a 150-point inspection and CARFAX on every vehicle we sell, we can help you find a safe and sensible ride that you (and your insurance company) will love.
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