5 Ways to Save Money on Car Insurance

Can you believe July is almost over? Time is flying—and so was my window to renew my family’s car insurance policy.

For the last five years, I’d been loyal to “my” car insurance company, which made it oh-so-easy for us to renew and pay in installments.

This year, as always, we received the new policy in the mail. But unlike last time, our charges had gone up instead of down! We were not happy campers.

After getting on the phone with customer service to see if they could help in any way—unsuccessfully—we decided to shop around. We already had our starting point with the renewal bill.

Here’s what we did to pay less on our car insurance policy:

1) Compare costs. With the convenience of the Internet, this step is very easy these days. Like I had mentioned, we hadn't shopped around for so long that it was a pleasant surprise when this step took just minutes instead of hours. One word of caution: Make sure you stick to the websites of reputable car insurance companies.

2) Decide what coverage to keep if you own an old car. Our 10-year-old commuter car has over 200,000 miles on it. That said, we check its value on sites such as Edmunds.com and kbb.com. We figured out that even if we kept collision coverage we would not get what we think our car is worth. Our question, then, was why pay for something we are not going to receive a benefit from. So we kept the liability coverage but dropped collision coverage.

3) Improve your credit rating. As a couple, we have been working on paying off our credit cards, and our credit score is improving. Most companies reward good credit scores with lower premiums. If you haven't started doing this yet, don't waste any time. You'll enjoy the rewards next renewal.

4) Increase your deductible. Now, this one is not for the faint of heart. Examine your driving pattern and your finances. We are lucky: We don't have long commutes, which makes the decision a little easier. We had a heart-to-heart conversation about the worst-case scenario. Could we come up with $1,000 instead of $500? Would our finance company approve of this change? In the end, we saved about 10 percent on our premium by increasing the deductible.

5) Pay the premium in full up front. We live in the South and our policy has to be renewed every six months. Deciding to pay in full saved us about $60. We took a look at our finances and decided it was a good move to save now instead of paying later. I know it doesn't seem like a lot, but our goal is to keep the snowball rolling and keep increasing our savings.

In the end, our goal is to use the money we are saving on paying off the last of our credit card debt. Do one or all of these things, you will be paying less and saving more.

Yoly Mason writes about frugality and savings tips and tricks in her popular Spanish written blog Cuponeando.net.