This is part 1 of a 2 part series teaching you how you can save money on your auto insurance. When you’re buying a car and trying to determine how much you can afford, many forget to factor in the cost of auto insurance. If you’re not ditching your old car you still have to pay for insurance on the old one and the new one too. Then you factor in the unexpected auto repair expense and you can see why people can default on their car loan. If you want to get the lowest insurance premium possible, follow these steps.
Buy a used car
Car insurance rates on new cars are much higher than on used cars. Not only that, but when you finance a new car from the dealer they will require you to get full coverage insurance. This monthly payment can be so high it rivals your actual car payment. If you want a low cost insurance option, buy a used car and opt for only liability insurance.
If the law requires you to be insured at all times, find out what the legal minimum is and only get that one. In California, for example, the minimum is $15,000 for a personal injury, $30,000 maximum personal injury per accident and $5,000 is the total coverage per accident for property damage.
Don’t be young
Younger people (under 25) pay a lot more in car insurance than older people do. Younger people should be added as additional drivers on a car, then moved to a primary driver once they are over 25. The highest insurance rates go to young drivers of sports cars who don’t have good driving records. So avoid that combination at all costs.