Auto insurance is designed to protect you in the event you have an accident or some sort of liability when operating your motor vehicle. Every state has its own set of laws and regulations, but in general, the main goal is to protect you in the event of an accident and replace or repair auto body damage that may have occurred in a crash. If you're under 25 and are getting ready to purchase an auto insurance policy all on your own, there are a few factors that definitely come into play, when it comes to getting the cheapest rates.
Combine Other Policies
When you search online or in your local Yellow Pages, there is definitely no shortage of insurance companies that claim to offer the best rates. While it can be daunting and time consuming to find a company that will match your needs, start by asking if they combine policies. If you currently have boat, RV, rental, or some form of life insurance, see about combining all of the policies onto one plan. This can offer a significant discount and make your policy premiums a little more affordable.
Improve Your Credit Rating
Obtaining an auto policy requires filling out an application. It's a binding legal agreement between you, the state you live in and the insurance company. One thing that is likely required on the application is your social security number. The underwriter will then run your credit report to ensure that it is satisfactory. The higher your FICO or credit score, the better insurance rates you'll be offered. Make sure you that have all of your existing credit accounts in good standing and nothing is in the collection process. This will help improve your overall creditworthiness with the company and make your policy more affordable. Other factors go into the application as well, such as, your driving record, age and length of time that you've been covered under an auto policy.
Pre-Pay For Your Policy
Many people choose to make payments on their insurance policy to stay within their household budget. While this option is available to most people, you can also chose to pay the premium off in one lump sum. In many cases, this will lower the overall amount of the premium and you'll be paying less. Ask your agent about an affordable policy that you can pay off in advance.
Look For Personal Discounts
As your agent is helping you with the insurance application, ask about any personal or professional discounts that may apply to you. Examples may include:
- College or school affiliation discounts
- Clubs or community service organization memberships
- Specific banks or credit unions that you belong to
- Work affiliations
In some cases, companies offer insurance discounts just because you work or go to school there, so it's important to check further into any existing clubs you belong to. You may also qualify as a rider under your parent's auto insurance, resulting in a much cheaper rate. It's important to ask your agent as well as your parents about this.
Keep in mind that if you have to have a loan to secure your vehicle, you'll need a more expensive, full coverage policy. Having standard collision is cheaper and more affordable. Contact your local insurance company today to discover the best rates for you and your driving lifestyle.