4 Mistakes That'll Drive Up Your Auto Insurance Costs

by Maurie Backman | Updated July 15, 2021 - First published on July 8, 2021

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These blunders could make your car insurance cost more than it needs to.

Whether you're new to buying auto insurance or are looking to switch to a different policy because you're unhappy with your current one, your goal should be to secure an appropriate level of coverage at an affordable price. But if you fall victim to these common mistakes, you could end up paying a lot more than you need to.

1. Not shopping around for insurance

When you're buying a home, it's smart to shop around for a mortgage so you can compare rates and find the best ones. Well, so too should you shop around for car insurance. If you go with the first quote you're given, you'll have no way to know if it's a good deal or not. Instead, gather a few car insurance quotes from several insurance companies. And when comparing those quotes, make sure you're paying attention to all of the details. It could be the case that one quote comes in higher than another for a reason -- say, because it offers more comprehensive coverage or other benefits you won't get with a different insurer.

2. Buying the cheapest used car you can find

Because older used cars don't have a very high replacement cost, you might assume that buying one will help you score a discount on your auto insurance. But actually, an older car could end up costing a driver more as far as insurance goes -- especially if the insurer decides it's not a particularly safe vehicle to drive. Rather than assume that a cheap, aging car is the way to go, aim for a used car in good condition -- ideally, one that hasn't been in any major accidents. You can use a service like CARFAX to gather those details.

3. Opting for too low a deductible

Having a low car insurance deductible (the amount you'll pay each time you submit a claim against your policy) can come in handy if you get into an accident. Motorists with a lower deductible pay less out of pocket before their insurance company picks up the tab for their auto repairs. But the lower the deductible is, the higher premiums are likely to be, so be careful when choosing too low a deductible. Keep in mind that if you get into an accident that another driver causes, you generally won't have to pay your deductible.

4. Not bundling your policies

If you have homeowners or renters insurance but use a separate company for car insurance, you may be losing out on savings. Often, people can score a discount on their insurance policies by bundling them -- meaning, getting multiple policies from the same insurer.

Owning a car can cost a lot of money thanks to auto loan payments, maintenance, and the ever-rising cost of fuel. So the last thing you want to do is spend more money than necessary on auto insurance. The good news is that there are several steps you can take to keep your insurance costs down -- and avoiding the above blunders could help make your premiums more reasonable so they're less of a strain on your budget.

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