When it comes to auto insurance, cost is a major factor, and more than a few drivers shop around for a budget car insurance policy that fits their income levels and spending habits. Insurance is a complex product, and unlike other types of purchases, there is a lot of room for changing cost when drivers shop around and compare policies. A few common strategies have helped many drivers and households to get the auto insurance they need at a cost they can afford.
Smart Coverage by Blue Book Value – Drivers who have a long term perspective on auto insurance often end up buying their vehicles with an eye toward their “insurance value.” Looking at the way your vehicles are covered can help you craft a policy that meets your budget needs.
When a car is new or only slightly used, it has a high blue book value. Drivers often purchase comprehensive and collision insurance to cover the full market costs of the vehicle in order to protect their investment. But if they are on a limited income, it makes more sense to buy an older vehicle, where comprehensive and collision coverage may not be necessary. It’s important to remember that any time a vehicle is being financed, regardless of its age or value, the lender will require comprehensive and collision insurance until the vehicle is paid off.
Deductibles – Another common way to change auto insurance costs is with a deductible. Drivers have to understand that when they raise deductibles, they pick up more responsibility for paying money on a claim before the insurance company picks up the rest of the bill. In exchange for this agreement, policies with higher deductibles have lower premiums, meaning drivers will pay less every month.
Adding Safety Features – If a vehicle is considered less “drive-safe,” the rates for a policy may be higher. Adding competitive safety and security features to a vehicle will lower the risk and make auto insurance cheaper.
Limited Mileage Plans – Today’s auto insurance companies have made it even easier for drivers to tailor their auto insurance costs to their budget. One of the newest ways to do this is with a limited mileage or “pay as you drive” insurance plan.
With these kinds of new policy options, drivers actually choose how much insurance coverage they want for miles traveled. Cutting down on the use of the vehicle cuts insurance costs. This is one of the most effective ways to bring auto insurance bills down into a specified range. However, some drawbacks do apply to a pay as you drive insurance situation, including less privacy for drivers, potentially expensive equipment, and costs of setting up observation for mileage. An alternative is to just declare a general “mileage tier” where lower mileage leads to generally lower costs.
All of the above will help drivers to get budget car insurance quotes and craft policies that meet their needs for fitting this necessary cost into a household budget.