One thing that many young adults face when moving out on their own for the first time is how expensive things are, including auto insurance. When you're no longer covered by your parents' auto insurance, you'll have to get coverage on your own and may become gobsmacked at the costs. There are many factors that go into how much your auto insurance rates are. Here's what you need to know.
Improve Your Credit Score
One of the factors that many people don't realize affects their auto insurance rate is their credit score in most states. However, there are several states where auto insurance companies are prohibited from using credit scores, such as Hawaii, Massachusetts, and California. If you are in any other state and would like to see lower premiums for your auto insurance, as well as lower interest rates on your vehicle loans and other loans, it's a good idea to improve your credit score.
However, sometimes, improving a credit score can take time that you may not have, especially as a young adult with little to no credit history. Fortunately, there are several other things you can do to get a lower auto insurance rate while you are improving your credit score.
Take a Defensive Driving Course
Another factor that can affect your auto insurance rate is your driving record. Since you are young, your driving record may be clean but that doesn't show the insurance companies that you are a safe driver. Your age makes you an inexperienced driver by default. Because of this, younger drivers tend to pay higher premiums for their auto insurance coverage. One thing you can do to improve how insurance companies view you as a driver is to take a defensive driving course. Taking a defensive driving course will show that you care about driving safely, which will enable the insurance companies to offer you a discount.
Avoid Double Coverage
Another way to reduce your premiums is to make sure you are not paying for coverage that you already have through other means. For example, you may have a credit card that provides towing and roadside service as benefits of using the credit card. If so, you wouldn't need to have those services as part of your auto insurance coverage. The same holds true for vehicle rentals in the event of an accident. If you're able to rent a vehicle with a credit card, you wouldn't need to have that coverage as an add-on on your auto insurance policy.