3 Tips to Save on Car Insurance As Inflation Rises
Tired of hearing about how inflation is affecting everything on the planet? (And so are we.) But it’s a massive train wreck, and we can’t seem to take our eyes off it.
Inflationary pressures are rising to unprecedented levels. And the majority of us have never had it hit our budgets in this way before. Food. The cost of gasoline. The price of that stuffed animal for your 3-year-old niece.
The grim reaper of inflation has now arrived at car insurance premiums.
But, before you panic and abandon your gas-guzzling car in favors of an old-fashioned horse, there’s some good news. You may be able to pay less for car insurance and keep more of your money in your pocket by employing a few simple strategies.
What Exactly Is Inflation?
Inflation occurs when the cost of goods rises. Remember that candy bar that used to cost 25 cents at your neighborhoods gas station? Is it now $1.50? That’s what inflation is.
In America, the inflation rate had risen to 7.9% in the previous 12 months as of February 2022. This is Guinness World Records material: the largest inflation increase in nearly 40 years. And, of course, drivers’ wallets are shrinking as gas prices and car ownership costs rise.
Why Are Car Insurance Premiums Increasing?
Cars are more expensive, whether used or new, electric, hybrid, or diesel-guzzling trucks. They’re all there. A new car costs 12% more than it did a year ago, according to the Bureau of Labor Statistics.
Ouch. “But no worries,” you say, “I’ll just buy a used car.” You absolutely should! The bad news is that used cars are now 41% more expensive than they were a year ago. Double yikes.
Microchip shortages and fewer auto workers are to blame for lower car and truck inventory—and rising car prices. Furthermore, the scarcity of parts is driving up the cost of vehicle repair.
All of this leads to a 10% increase in car insurance rates in 2022.
All of this adds up to a triple whammy for your transportation budget: you’re paying more at the pump, more for a car, and more for car insurance. The majority of this is beyond your control. But there is something you can do
3 Ways to Save Money on Car Insurance
There are several ways to save money on car insurance; here are three of them. (Also, check out our free checklist for even more money-saving ideas.)
1. Cut Add-Ons
Consider ordering a dessert at a restaurant but knowing you won’t be able to consume it. Alternatively, purchasing something online that will never be delivered. Purchasing add-ons to a car insurance policy is similar. With a fully funded emergency fund, you can forego extras such as roadside assistance or rental car reimbursement and keep more money in your pocket. You can even forego collision coverage if you own an older car that has been paid off and have enough savings to purchase a new one.
2. Bundle and Save
It’s an old cliche, but it’s true. You can actually save money if you combine your car insurance with your homeowners or renters insurance.
3. Go Shopping!
No, we’re not talking about a new purse or smartphone. We’re talking about comparing auto insurance rates. This is one of the most effective ways to reduce car expenses.
You could do it all on your own, staying up late comparing quotes and researching companies. However, this may simply put you to sleep, and you will still not have a new rate.
There is an alternative.
Allow our independent insurance agents to do the shopping for you. They’ll run like a hound dog in search of the best policy at the best price with just a little information.