Purchasing a new vehicle costs money. With gas prices soaring, affordable auto insurance has never been more important. According to the U.S. Bureau of Labor and Statistics, the average cost for auto insurance rose 33 percent between the years 2002 and 2011.
After purchasing a new hot-rod, insurance quotes can now top more than $110 per month ? entering newer cars into a quote comparison engine, like the one on Kanetix, tends to be spitting back a higher number for newer vehicles.
However, insurance costs remain a necessary evil because the coverage that they provide is imperative. Auto insurance claims peaked at $117 million in 2011, so new car owners cannot afford to go without good insurance; if car owners forfeit strong insurance policies, they risk losing the money that was invested into their new car.
Fortunately, there are ways to limit auto insurance costs while maximizing policy coverage.
The Right Car
Before investing a plethora of money into purchasing a new car, buyers should know how vehicle models affect insurance premiums. Insurance companies gauge a car?s risk of being damaged when assessing insurance premiums and coverage.
For example, red vehicles attract more attention, distract adjacent drivers, and ultimately lead to higher collision rates.
This rule applies to any high-profile vehicle. The odds of a new, slick sports car being stolen are much higher than the odds of a minivan being stolen. There is a general rule of thumb: the more expensive a car, the higher its insurance premiums run.
By picking a practical car that has excellent safety features and high gas mileage, you can save thousands of dollars in fuel and insurance premiums. Avoid brightly painted cars or expensive sports cars.
The Right Coverage
Auto insurance exhibits the same diversity as any other type of insurance. Finding the best policy can save considerable money on car insurance. If you acquired a loan to purchase the car, then you will probably be required to have a full-coverage policy.
Full-coverage and liability typically are not an option for new car owners, but other policy options are available to the policyholder.
One important example is the medical coverage policy. If you already have great health insurance, then you may not need medical coverage by your auto insurer. Avoid double coverage of health insurance, life insurance, and disability insurance.
These types of insurances may provide coverage for the same scenarios, so review your various policies and only pay for a specific type of coverage through one type of insurance.
Higher Deductibles
A deductible is how much upfront money policyholders must pay before insurance providers will cover an accident. Higher deductibles can substantially lower monthly insurance premiums. Raising a deductible by only $300 could reduce the cost of coverage by up to 30 percent. Increasing a deductible from $200 to $1,000 could lower the insurance premiums 40 percent.
Clearly, higher deductibles are ideal for limiting the cost of auto insurance on new cars.
Driving Records
Driving records reflect an individual?s personality and are demonstrative of the individual?s risk-taking tendencies. Maintaining good, clean driving records will show insurance providers that you are a safe, low-risk driver. Collisions, DUIs, citations and other traffic violations insinuate risk tendency in a policyholder and contribute to higher premium rates.
Young adults and teenagers pay more for insurance because they are considered to be at high-risk for accidents.
Local and state governments usually offer free drivers? education courses geared toward young or inexperienced drivers. By taking a drivers? safety course, you lower your risk to insurance providers and inadvertently lower insurance costs. This rule applies for new and old vehicles.
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