March 22, 2010

Getting A Guaranteed Rate For Your Vehicle’s Auto Insurance Policy

We all want to save money on auto insurance. But what happens when that six-month teaser rate on the policy you just bought runs out? You are left scrambling to come up with the new higher auto insurance quote at renewal. When you are on a budget, having fixed costs is essential. The best way to manage your car insurance budget and get a good rate on your insurance is by purchasing a guaranteed rate policy. Offering a lower rate for new customers is an age-old practice for car insurance companies. They attract long-standing customers away from other insurance companies with low car insurance quotes, hoping the new policyholders will stay even after they hike the rates back to the standard auto insurance premium.

It’s true you may pay a little bit more for auto insurance with a guaranteed rate of a one-year term. But you may be able to get a big discount by staying with one company for a long time, bringing the auto insurance quote even lower than that teaser rate you saw. Customer loyalty and accident-free rewards can save you as much as 40% when you stick with one company for three years or so. Before jumping ship, ask your insurance company what sort of rewards you might gain by staying. When you tell them you are thinking of switching, they may lower your car insurance quotes to get you to stay. Add customer loyalty and other discounts to that equation and you are really saving some big money. Teaser rates can sometimes come with hidden fees too. You may be charged $3-$5 each month for making installment payments, costing you another $36 to $60 on your insurance. Make sure you have factored in any such fees when you examine any auto insurance premium.

There are additional ways you can bring down your guaranteed rate to the same cost as a teaser rate. This lets you save money and stay on budget throughout the year. The first option is to choose a higher deductible. Save up a small nest egg and leave it in your savings account in case there is an accident. Then you can carry a higher deductible, save money on your auto insurance and earn interest on the savings. If there is more than one car in your household, keep them both on one policy. You will almost always get lower car insurance quotes this way. If the company also sells home insurance, see if you can get a lower auto insurance quote for adding your homeowner’s insurance into the mix. If you can, pay the full auto policy premium in advance to avoid installment fees.