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5 Easy Ways to Lower Your Car Insurance Premium

Looking for ways to lower your car insurance premium? Here are five tips on how to save big without sacrificing your coverage.

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1. Increase Your Car Insurance DeductiblePhoto: Shutterstock

Increase Your Car Insurance Deductible

Raising your deductible is the easiest (and surest) way to lower your car insurance premium. If you can afford it, raising your deductible from $250 to $1,000 could save you 20 per cent or more on your car insurance premium.

You’ll need to budget for the higher out-of-pocket costs, and the best way to do so is to bank your monthly savings and stash the cash in a separate bank account. That way you have the money you need if you get in an accident—and a nice little emergency fund if you don’t.

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2. Shop Around for Car InsurancePhoto: Shutterstock

Shop Around for Car Insurance

If you haven’t shopped for car insurance in a few years, you could be throwing money away. Car insurance companies work hard for your business, and they are always looking for ways to make coverage more attractive (read, affordable).

Do not assume that your current policy is the most economical policy being offered, especially if you have a clean driving record. Pick up the phone, go online, or shop at car insurance comparison sites. You may be able to save hundreds of dollars a year.

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3. Drive SafelyPhoto: Shutterstock

Drive Safely

It may seem obvious, but a flawless driving record is one of the best ways to lower your car insurance premiums. Insurers have a vested interest in how well you drive, and they will reward —or punish—you for your behaviour behind the wheel. (Would you believe this is the most dangerous day of the week to drive in Canada?)

Have your car routinely inspected by a professional for safety, pull out of driveways slowly and cautiously, drive with caution through the parking lots and always look all ways before leaving a stop sign or red light. These safe driving habits can not only save you an unfortunate accident—but also a whack of money on insurance.

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4. Install a Car Insurer's Monitoring DevicePhoto: Shutterstock

Install a Car Insurer’s App

Some car insurers are now using apps that automatically monitor your driving behaviour, and downloading one could cut your car insurance premiums significantly. These apps monitor everything from the speed you drive to how quickly you stop and turn—and brake. The insurance agent can give you pointers on what the apps look for and how to adjust your driving behaviour to get a lower insurance rate.

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5. Consider Dropping Collision CoveragePhoto: Shutterstock

Consider Dropping Collision Coverage

If your car is more than a few years old and your loan is fully paid off, you may no longer need collision coverage. Collision coverage is designed to pay for the damage to your car if you’re in an accident that is your fault, but the most insurance will pay is the value of your car.

If your vehicle is worth less than $2,000-$3,000, the cost of collision coverage may not be worth the benefit. The next time your insurance policy is up for renewal, contact your agent and ask for quotes with and without collision coverage. That will allow you to make an intelligent and informed decision.

Next, check out five car insurance myths—busted!