Auto Insurance Rate — Ways To Get Cheaper
If you elect to pay your premiums monthly, you will pay higher rates. Notwithstanding the fact that this alternative is often less stressful, it is more expensive for some reasons..
If you do transactions with banks you'll agree with me that each check you process is regarded as transaction which attracts a certain charge. For 12 payments (that is, your monthly premiums) you will have a sum of 12 transactions. This implies that transaction costs would be 12 times more for people who pay monthly.
There are also administrative costs to your insurer that are due to monthly payments. For instantce, it costs insurance companies millions of dollars yearly to mail payment notices..
These and more are then added to your rate thereby making it more than if you paid yearly.
The longer you stick with the same insurer the more you stand to gain for two reasons: The long term discount and accident forgiveness. Most insurers will give you a discount of about 5% if you stay with them for up to five years (some will give you once you stay for up to three.
Most insurers will also not raise the rates of a long standing policy holder if they make only just one claim. It makes sense for the insurer as it is cheaper to give discounts to existing policy holders than to acquire new ones.
But it will only be right for me to also point out that in spite of these incentives, you might actually gain more if you switch to another insurer.
If you want to keep your rates down, do NOT "pimp your ride." If you want to impress your friends with those extra special features like bigger types than the manufacturer's specification, then be prepared to pay a lot more.
It's a known fact that young drivers attract high rates. More so, the younger an under-25 driver, the more they'd have to pay. That is why teenagers pay a lot more than 22-year olds.
This means that you'll help keep your rates down if you do NOT have a teen driver on your policy. It will have an adverse effect on your rate. You can discuss with your agent about signing an exclusion form so that your teen driver can have his/her own auto policy.
If a teen is keen on driving then then should be made responsible for at least the cost of their auto insurance. Teens who pay for their own auto insurance are more willing to take steps to bring it down. Your teen will also be safer as the steps that will bring down his/her rates will make her a more responsible behind wheels.
There are useful extras and there are those that do nothing but just inflate your rate. A good example of the later is adding a towing service to your policy. Do you know that your credit card company might have already given you towing as an extra benefit?
Even if yours does NOT add this kind of service, a dedicated towing service from a third party will serve you better and save you more than adding towing to your auto insurance policy.
And...
You can reduce your auto insurance costs by asking for and comparing quotes from at least five good quotes sites.
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Filed under: Car Insurance