By in Insurance, Saving



How to Cut Your Car Insurance Costs

Everyone is aware that if you own a car, you need insurance. Since insurance is one of those “what if” costs that you need, but don’t want to use, cutting insurance expenditures is a win win proposition.

As a personal finance expert, I look for ways to cut costs which will not impact my lifestyle. Here are some insurance basics that will lower your premiums.

If you drive an older car, (confession, El Carino’s new car is 8 years old, and the one I drive is 13 1/2) there may be coverage you can avoid. Even Liz Weston, from MSN Money suggests you may want to Dump the Insurance on Your Clunker.

What are Collision and Comprehensive Coverage?

Collision coverage pays to repair your own car in the event of an accident.

According to Edmunds, “Comprehensive coverage takes care of your car in the case of theft, fire, falling objects, explosions or other unexpected problems.”

What if your car is totalled?

The insurance company considers your car totalled when the car repair costs are greater than a predetermined percentage of the car’s value. For example if the repairs on your damaged car are 80% of the car’s value, and the “totalled threshold” is 70%, then even though your car could be repaired, it is considered totalled by the insurance company.

For example;

Car’s value: $10,000.00

Repair costs: $8,000.00

Totalled threshold: Any repair above $7,000.00

Even though the car can be repaired, the insurance company considers it totalled.

Edmunds goes on to say, ” If you’re driving a rattletrap, on the other hand, and the sum of your premium and your deductible are close to the value of your vehicle — or if they exceed it — you might want to consider doing without this coverage.”


One of the best ways to lower your premium is to raise your deductible. If you have a good sized emergency fund and are a safe driver, consider boosting your deductible to $500.00 or $1,000.00. This approach usually takes a big bite out of your premium.


  • Spend a few minutes on line every few years to compare rates.
  • Before buying a new car, find out the cost to insure!
  • Consider buying homowners and auto from the same firm to lower premiums even more.
  • Always ask what discounts are available. You may be able to do something quick and easy to lower your insurance costs.

What are your cost cutting insurance strategies?

image credit; Bogdan Suditu