Car insurance is an inevitability, but it doesn’t have to be a burden.
It doesn’t pay to stay loyal anymore, so you should shop around every year. But what else can you do to keep your payments down?
Drive safely
Maintaining a good driving record is the foundation for keeping your insurance costs down. Your claims history and driving record are the basis on which you will be assessed. So slow down, observe the stop lights and generally keep a lid on it.
Also try to keep your driving to a minimum. Some providers may offer a financial ‘reward’ for keeping the odometer idle.
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Shop around
It does not pay to be loyal to one provider anymore. They will simply keep upping your premium every year. Contact a comparison business and get them to do all the hard work for you to shop around. You could easily save hundreds.
Before you buy
Check out the insurance level of a car before you buy it. Some models are catnip to car thieves and thus attract a higher premium. And some models require expensive parts and replacements if they are damaged. Once again, hundreds could be saved with five minutes’ work.
Be brutal
Some companies will give a discount if you restrict the amount of people covered under the policy, especially younger people. Don’t want your children driving your car? Restricting who can drive it could be the perfect excuse to wean them off your vehicle and encouraging them to buy their own. On your bike, kids.
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Lump it
You may be eligible for a discount if paying an annual lump sum because it avoids the extra ‘handling’ of paying monthly.
Keep it clean
Maintaining your car is vital. Follow the scheduled service regime and replace or repair any damaged areas. Your insurer may not pay out if the accident is the result of poor maintenance, say if you have an accident due to bald tyres. Try and keep everything in tip-top working order.
Agreed or market value?
Consider carefully if you want agreed or market value insurance. Agreed value is – obviously – a predetermined amount to be paid if your car is a write-off. Market value is a bit more complex and covers what the industry recognises as what your car would cost to buy on the open market, considering a number of factors including make, model, condition and how many kilometres on the odometer.
It is generally cheaper to have a ‘market value’ but there are discounts to be had with agreed value as well.
You can save money by setting a lower agreed amount than the market value (look online to see what your make and model is selling for), but it is a bit of a gamble. If your car is worth $20,000 and you agree to insure it for $10,000, your premiums will be less, but should the worst happen and your car is a write-off you will struggle to replace it like for like. However, to look at it from another angle, $10,000 goes a long way to getting another car anyway.
Agreed value may suit you better if you have a rare model kept in excellent condition that would be hard to replace.
Be very clear about what you are comfortable with before choosing either way.
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Excess
If you set your policy to the highest excess – the amount you pay out of pocket before the insurance kicks in – this reduces your upfront premiums.
Once again, set it at a price you are comfortable with. If a $2000 out of pocket bill would knock you out of your socks, decide on a level you think you could afford.
Lock it up
Some insurance providers may offer a discount if you can prove your car is being kept secure as well as extra add-ons such as an immobiliser, alarm or tracker. A good comparison site will be a help here.
Add it up
Do you really need extras such as windscreen insurance? If you only drive in a leisurely manner on sedate suburban roads, the chances of you needing a windscreen repair or replacement are minimal. Other extras to consider include roadside assistance or hire car cover. Past use may be a future indicator.
Do you have any tips for saving on car insurance? Why not let us know in the comments section below?
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