When you factor in car payments, fuel, and maintenance along with insurance, auto expenses can easily become one of the largest budget categories.
Several factors contribute to this rise, with two major ones being the complexity of modern vehicle technology, including sensors, and the escalating cost of parts. Additionally, the average cost for a collision claim has reached $6,000.
For example, my own car’s bumper was tapped at just 5 miles per hour, and the repair bill exceeded $8,000.So, what can drivers do?
There are several strategies that may help reduce your insurance rates.If you're considering purchasing a new car, research the makes and models with higher insurance premiums, as costs vary significantly between vehicles.
Raising your deductibles can also lower your premiums, and you can reduce add-on coverage, such as rental car benefits while your vehicle is in the shop. Driving less reduces your risk of accidents, which in turn can lower your insurance costs.
Be sure to ask about available discounts, and if applicable, bundle your car and home insurance. In some states, completing a defensive driving course can also result in a premium reduction.
Accidents and violations typically remain on your record for 3-5 years, so if this applies to you, exercising patience may help in the long run.Many companies factor in credit scores when determining premiums.
While some claim they use a model based on credit behavior rather than an actual score, many people remain skeptical of this disti nction.This ties back to the importance of maintaining a strong credit score, which we covered in episode #40.
In conclusion, while you can't control the overall cost of automobiles, you do have several options to help manage your insurance expenses.
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