6 Ways to Reduce Your Auto Insurance Premiums

Posted by: Dan on 28/04/2016

Category: Maintenance

6 Ways to Reduce Your Auto Insurance Premiums


Auto insurance is a necessity, but it need not be expensive. With the right knowledge, you can lower your premiums in a number of ways, leaving you insured and covered but with more cash in your pocket. Here are 6 of the most effective ways to lower your auto insurance premiums.

1. Don’t claim minor things

One of the most common mistakes drivers make is filing claims on too many things on their insurance. Insurance is there for a reason – but it should only be used when you really need it. Of course, if you’re involved in a major car crash that resulted in significant damage to your car, go ahead and file a claim – that’s what insurance is for.

But if you have a small amount of damage, such as a scratch in the paint or a sideswiped mirror, you’ll probably be much better off if you visit a mechanic or just fix it yourself. While this means you’ll need to pay for the repair out-of-pocket, it can be cheaper than claiming on insurance, only to find that your premium goes up the next time you renew, making it more expensive overall.

2. Change the type of vehicle you own

A Ferrari costs more to insure than a Toyota. This is commonly known and understood, but if a driver really loves their ride, they may be happy to pay a higher insurance premium and think it’s well worth it for the enjoyment they get from driving their car.

So, if you have a car you love now, there’s no need to trade it in, but just keep in mind when it comes time to buy your next one that it makes sense to consider the cost of insurance along with the purchase price.

Meanwhile, ask your insurance company if there are any ways you can reduce the premium by changing your vehicle’s features, such as getting rid of that very expensive stereo in the car that you actually never use and swapping it out for a basic CD player. Doing so could reduce the overall worth of you car – and thus the expense of insuring it.

3. Actively show you have a good driving record

While most motorists know making claims on your insurance due to accidents will drive up your premium, fewer know that speeding tickets and many others factors play a part, as well. As insurers assess a wide variety of factors when providing an insurance quote, it’s useful to actively ‘sell’ your good driving record to your insurance provider.

Along with avoiding accidents and police attention, completing a driver safety programme that addresses dangerous habits and helps you brush up on your driving skills may offer you a chance to cut down on your premium costs. Also, since insurers often provide a better rate to people who are married (many insurers regard married people as statistically less likely to get into a crash), be sure to notify your insurer of any change in your life circumstances that may help you reduce your premium.

4. Look for an insurance company that adjusts premiums based on when you drive

If you only use your car on weekends to drive to sporting events or church, you are statistically less likely to be in an accident than someone who drives daily in peak rush hour. This means your insurer shouldn’t be charging you the same premium that they do for a city commuter who keeps their auto parked on a busy (and therefore higher-risk) city street each day while they’re at work.

Be sure you have an insurer that is flexible across the board. While expecting a change in your premium each month would be unreasonable, if you have recently started parking your car in a garage instead of on the street, you should expect to see your premiums reduced in light of that increased safety measure. So, if you hear it will take a year until your premiums are reduced? Consider changing insurers.

5. Park somewhere safe and secure

Unless you have a driving job, most of the time your car will actually just be sitting idle outside your home. That means that putting some thought into its storage while it’s sitting there is essential to reducing your premiums. In addition to keeping your car locked in a garage at night to decrease chances of damage and theft, it’s a good idea to install a car alarm and even to put a steering wheel lock on as a further deterrent to thieves. Essentially, the more difficult and unattractive your car looks to thieves, the more likely you are to get a reduced premium from your insurance provider.

6. Ask for reduction

There is fierce competition among insurers in Australia, so much so that the industry has grown 2.5% as a whole between 2011-2016. So, if it's been awhile since your last claim, call and ask for a rate reduction. If you find that your insurer isn’t willing to consider a reduction, don’t be afraid to mention a competitor's offer. If another insurer can provide you with the same service and coverage for less, it’s more than reasonable to ask your current insurer to match the better rate – or even do better.

So, remember that there are a variety of ways to lower your auto insurance premiums. Just make sure that your insurer meets your needs by providing appropriate coverage at a fair and reasonable price. Follow our 6 tips, and find yourself on the easy road to good and affordable insurance coverage.

What other ways have you found to reduce your auto insurance premiums? Do you know any other insurance tips? Let us know in the comments below:

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