If you've just bought a new car or even a second-hand vehicle, then you are legally obligated to get insurance. Insurance is a tricky subject because there are a lot of variables that go into determining how much it will cost you annually and how well you will be protected in the case of a car accident or theft. With a more comprehensive plan, your insurance can also be used to cover the expenses of the other party in the case of an accident.
Depending on the vehicle type and the year of manufacture, you might need to get a certain kind of insurance. So, to help you better negotiate a car insurance policy, here are 8 tips that will help you get a better deal under any circumstances.
1. Install Security Devices:
Insurance is meant to protect your vehicle from all kinds of threats and if you are taking proactive measures to enhance the security of your vehicle, this can count towards your insurance policy. Things like a GPS tracker, an anti-theft security system in the ECU, or even a standard key-fob security system, could help you reduce insurance costs. The security system itself is an investment but it saves money on insurance. The better the security the device or service provides, the more it will reduce insurance costs.
2. Maintain A Good Credit Score:
Credit scores are very important in any kind of financial service and insurance services are no exception. Insurance companies will look at your credit score when determining the premium you have to pay on the insurance policy. Having a good credit score will not only reduce your premium amount but might even make you eligible for special programs. This way you can get a much better insurance plan for the same amount that other people will get a standard package.
3. Make Timely Payments:
In most cases, insurance policies will be annual. If you’re buying a brand new car or opting for a special insurance policy, it could take 3 to 5 years to pay off. In the case of annual plans, making timely payments will save you a lot of money. According to Australian insurers at Youi
, if the policy period elapses then you will need to restart the policy the following year, which involves additional costs; just like the first time, you signed up for the policy. When you pay beforehand you continue without any additional renewal costs and you might even get a discount for maintaining a good payment history.
4. Minimize Additional Insurance Services:
When you buy insurance, it provides you with some basic services such as financial aid in the case of an accident or theft. You can also add on certain services, for instance, getting a replacement car in case your car has to go for repairs or breaks down. However, these additional services come at a premium price. Consider whether or not these additional services are really worth it for you because they will be a part of your recurring insurance costs. You might be able to get a discount on the insurance policy itself but these additional services are sold at full price.
5. Good Driving History:
Just like your credit score, your driving record is also important. If you have a history of aggressive driving, lots of fines, accidents, and generally reckless driving habits, it will inflate your insurance costs. You become a higher risk for the insurance company and regardless of which policy you go for, it will be more expensive than what it would cost someone with a clean driving record. The only thing that will change this is responsible driving history.
6. Avoid Car Upgrades:
When you upgrade your car, install a high-end stereo system or get expensive rims and tires, for instance, it increases the car’s value, which in turn increases the value of the insurance. While getting a GVM upgrade for a commercial vehicle is well within your rights, unless you really need these types of things, your best bet is to keep your vehicle as close to factory condition as possible. This will help keep your car value down and allow you to pay more affordable insurance rates.
7. Higher Deductibles:
Some insurance companies will give you the option to pay deductibles. For instance, if your vehicle is involved in an accident and now needs repairs, the deductible is the amount you will pay out of your pocket and the rest will be covered by insurance. So you might be paying 20% as a deductible and the rest is covered by insurance. Having higher deductibles in your policy will help reduce the total cost of the insurance policy since the insurance provider has to provide less coverage.
Similarly, paying zero deductibles means that a problem with your vehicle will cost the insurance provider more money so, naturally, the insurance policy will be more expensive.
8. Compare Before Finalizing:
When you buy a new car, the showroom will most likely offer you insurance right then and there. They will have some kind of affiliation with the insurance company they are promoting and it's not necessarily the best deal you can get. Similarly, if you buy a second-hand vehicle, it will have an ongoing insurance policy.
There are countless automobile insurance products in the market and it's best to talk to a consultant to choose the right one for you. Find out exactly what you need in the policy and then look for something accordingly. Use online tools to compare premiums before you finalize your decision.
Insurance is a legal requirement but it is also a very necessary service for an asset like a vehicle. If you use your car for commercial purposes, specifically, then having insurance is critical. Without insurance, you can fall into a number of legal problems and this only adds to the cost of owning the vehicle. Discuss the insurance policy with an expert and have it customized according to your needs. This will not only reduce the cost of the insurance but will also ensure you are getting the best coverage possible and the most value for your money.