DRIVERS have been inundated with increasing car insurance rates, but experts say some small changes can save thousands.
Americans are paying an average of 18% more on car insurance as crashes become more costly and frequent – but some drivers said they saved up to $800 a month.
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Insurance companies calculate the risk each driver carries when they take on the road.
Motorists who travel less than 10,000 a year may be able to report their low mileage to insurance companies.
The average American drives over 15,000 miles per year.
Because low-mile drivers carry less crash risk, companies may be able to save hundreds, according to Jacksonville CBS affiliate WJXT.
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If drivers travel more than 10,000 miles, there are several other ways to save money on insurance.
However, some of the cost-cutting solutions come with massive trade-offs.
Owners should consider the value of their vehicle, the station said.
If collision and comprehensive insurance cover more than the vehicle’s value, it may not be financially sound to keep paying for the extra cost.
“As a general rule, when you’re premium is more than 10% of the car’s value, it’s time to consider dropping collision,” Chuck Bell from Consumer Reports told the station.
Bell also said it might be wise to drop comprehensive coverage on a vehicle if the car’s value decreases.
However, if a driver gets into an accident without collision or comprehensive insurance, they must pay the upfront cost to acquire a new car.
Drivers can take defensive driving courses to save some monthly cash.
Some safe-driving courses can save drivers up to $200 on their annual insurance rate.
Courses can take a few hours and normally cost $25.
However, some insurance companies accept online safe-driving classes.
Expert Advice on Leasing a Car
Ray and Zach Shefska, the father-son duo making up CarEdge, spoke to The U.S. Sun Motors Reporter Kristen Brown in an exclusive interview on their top tips before signing a lease agreement on a new car.
Leasing a car can be a more viable option for some instead of financing with an auto loan.
Leasing a car for 24 to 36 months can be attractive to many because monthly payments are typically lower than loan payments, though there are some restrictions, like mileage allowances.
At the end of a lease, people can either buy the vehicle out at a reduced price, or they can return the vehicle to the dealership and lease another car.
Before jumping into a lease, Ray gave his top tips to consider, stemming from his 40 years of experience as a sales manager for several dealerships:
- Learn the interest portion of the lease – or the “money factor” – to understand how much interest you’ll be paying and how much it equates to overall.
- Negotiate the selling price before discussing the monthly payments – the cheaper the selling price of the car, the cheaper the payments.
- Accept the premise that you will always have to make a payment, so you can either have a nice car for a cheaper payment, or a lesser car for a higher payment.
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Drivers can also lower their rates by allowing insurance companies to monitor their driving.
Safe drivers may benefit from up to $800 yearly savings with driver monitoring tools.
However, some drivers complained that the technology requires too much data.
Motorists complained after insurance companies monitored their driving without their knowledge.
Several legal moves, like hard brakes, fast accelerations, and swerves, forced drivers to pay more on their rates.
A driver reported paying 22% more after insurance companies monitored his driving.
