Auto insurance is expensive insurance yet necessary. It is a shield against damage or theft that you cannot manage without.
Paying a car insurance premium can be very tricky, especially if you have taken on debt. A large number of people use car finance options to buy their car.
When you keep up with auto debt payments and insurance premiums, it becomes more challenging to keep a tight rein on your finances.
You will cover all the bases to ensure that you manage to pay the premium without falling behind the debt payments. Still, apart from basic steps like budgeting and cutting back on spending, you should take the following steps when buying or renewing your insurance to avoid paying over the odds.
Shop around
Undoubtedly car insurance adds to the total cost of your car, but the good news is that you can manage to save a lot of money on it by putting in the extra effort. Note that insurance prices vary from company to company so that you can save hundreds of Euros with little research.
There are generally two types of insurance companies – the one that sells insurance through agents and the others that sell directly to their customers. You should ask for quotes from both types of companies and a couple of companies in each category.
You will find a lot of differences in quotes. This is an amazing way to pick the coverage that meets your needs without breaking the bank. The lowest prices cannot serve as the basis for decision-making. You will have to take into account the reputation of the company. This is why you should try to:
- Read reviews and search online for what other people have to say about these companies.
- Ask your friends and relatives if they can recommend the best company or help you choose the one from the list you have prepared.
Increase your deductible
A deductible is a sum of money that you are to pay out of your pocket in case of damage or theft. Your insurer will deduct this sum at the time of giving you the claim payment.
Although there are several factors largely responsible for determining the size of the premium, the deductible can truly affect the cost of your insurance.
There higher the deductible, the lower the premium. When you raise it, it shows you are taking up the responsibility of bearing the damage.
However, it is suggested that you should choose the amount that you are comfortable with. Since this amount is to be deducted from the claim payment, it can be quite challenging to keep up with payments of car finance in Ireland.
A rule of thumb says that you should slightly increase the deductible, so you do not end up paying a lot of money in premium, nor do you suffer in case of any unfortunate events.
Maintain a good credit score
Insurance companies look over credit scores to decide how much they should charge. However, these credit scores are not that lenders use to sign off on your application.
These are credit-based insurance scores that are calculated based on your credit report maintained by credit reference agencies.
Insurers use these scores to determine whether you will likely file the claim. Note that these scores are just only one factor.
If you pay all your bills on time and do not make default in the payment of your loan or credit card bills, you will likely get the insurance at a much more affordable cost.
Avail yourself of using no-claim discounts
You should try to keep your car in good condition if you want to get no-claim discounts. Insurance premiums can go down over a couple of years if you keep your car as safely as possible.
Insurers find those people less risky who do not make any claims. The more years you manage to go without claims, the more money you will save. You can use no claim discount tools to get an idea of how much discount you can be offered.
If you are young, especially a student, you should take a defensive driving course because this can make you eligible to get a discount.
The discount can be from 5 to 15% depending on the location you are living in. Such discounts can help you manage your debt payments, especially if you are on car finance for the unemployed in Ireland.
This kind of car finance deal is usually more expensive than the standard auto loan. In this scenario, it becomes more essential to cut down your cost on premium.
Stick to the one company
It is always suggested that you should research properly at the time of buying insurance because it can benefit you in the long run.
Even if you have a scope to switch to another insurer when you are stuck in an expensive deal, it may not let you get offers. If you stick to one company over time, you can get benefits. The insurer can take some money off the premium.
You will likely get more discounts if you have bought a couple of insurances already from that company. Seeing your credibility, the insurer can allow you to enjoy benefits in the form of discounts.
The takeaway
Auto premium can undoubtedly add a burden to your finances. This is why it is recommended to shop around carefully. Prices vary from insurer to insurer.
Do not make a decision based on the lowest prices. There are various other factors, including fees and the reputation of the insurer, that affect the overall cost of the premium.
Well, whether you have bought a new car or an old car, make sure that the debt payment and insurance premium are not taking a toll on your finances.
Caleb works as a senior content writer at Financealoan for the past 3 years. He is a writing enthusiast and invests a good time in exploring and writing about financial trends. His keenness in exploring a topic to create a research-based piece is simply unmatched. He believes in including a texture of authenticity with real-time examples and facts.
Caleb’s blogs and articles reveal deep-seated knowledge and expertise. His educational qualification forms the base of his excellent command over the industry and Jargon. He is a postgraduate in Finance and is currently involved in exploring the world of the stock market.
