STATEPOINT -- When it comes to saving money, it helps to cut out smaller expenses that add up over time -- such as frequent lunch dates, unused gym memberships or online subscriptions. But if you really want to make a dent in your budget, you need think bigger.
How big? Well, consider that after a home, a car is the single most expensive thing many people will ever buy, and cars need insurance. And you need that insurance if, for example, you injure someone in a crash or damage their car, or your own car is stolen or damaged in bad weather. Should such an incident occur, you'll likely consider it money well spent. But that doesn't mean you should pay more for it than you need to.
Here are three ways to reduce car insurance expenses:
1. Purchase safe car models. The cost to insure a particular car depends on several factors, but one is safety. The auto industry and the National Highway Traffic Safety Administration test cars to determine their safety ratings, and insurance companies build on that information by reviewing customer claims data to see how the vehicles perform over time in the real world. The result? Safer vehicles tend to be less expensive to insure.
2. Keep it clean. Insurance companies use information about you to determine your likelihood of having a crash and filing a claim. One thing they consider is your driving history, because they have found that past performance can help predict what will happen in the future. If you've had speeding tickets, accidents or other violations within the last few years, your auto insurance rate may be higher than if you have a clean driving record. Research has also shown a correlation between good credit and good driving. Certain credit information may predict future insurance claims, so some insurance companies may use credit history to help determine the cost of car insurance.
3. Take advantage of discounts and special programs. Just about every insurance company offers discounts, so be sure to ask your insurance agent which ones apply to you. For example, you may be able to get a multi-policy discount if you insure multiple cars, or a car and a home with the same company. And depending on what type of car you drive and its features, (factory-installed airbags, anti-theft devices, anti-lock brakes) you may be eligible for discounts.
Also explore unique and out-of-the-box programs that can save you money. For example, Erie Insurance has a program for their customers called YourTurn that gives drivers rewards in the form of gift cards just for doing something many people already do -- drive safely. Drivers just install an app on their phone that measures factors such as speeding, hard braking and phone usage and provides scores and feedback to encourage better driving habits. Based on the score, they can earn rewards that they can redeem for gift cards or donate to charity. Besides the financial benefit, the app has been shown to reduce risky driving behaviors, which can lead to safer roads for everyone, and ultimately lower insurance costs.
When it comes to having more money in your pocket, don't overlook the bigger opportunities like getting the most value from your car insurance.