Increase Your Gas Mileage – Adjusting Your Car Insurance?

Can this be true? Sounds about as good as the “run your car on water” scams out there today. Actually, making adjustments to your auto insurance won’t increase your gas mileage one bit. But, if you make the right changes, you could save more money on total cost of ownership (the amount you pay for EVERYTHING about the car) than you ever could by squeezing an extra mpg or two out of the gallon.

• Carry responsibility only. Do you drive an older car? Is it worth $3,000 – $4,000 or less? Find your insurance policy (or call your agent) and see if it has comprehensive (comp) coverage and collision, towing, windshield replacement, or other similar coverages. If you’re currently paying for any of these items, the cost could far outweigh the benefits. In my case, my 1994 Taurus is worth about $1,500; compensation and collision would cost about $600 a year. It doesn’t take a genius to figure out that in less than three years you would have paid much more than the car’s value in insurance premiums. Better to put that money in a savings account. A word of warning: don’t skimp on liability (the insurance you have if you harm others). You may have a cheap car, but you may have only added a $200,000 Mercedes. You will still have to comply with the Merc even if your insurance ends at $25,000.
• Shop for the best insurance deal. There really is no reason not to change your insurance company IF you can save a dollar or two (or more). It’s like getting a mortgage on your house: get the cheapest total money you can get. But be sure to consider the TOTAL cost package. As long as the insurance is comparable and the company is licensed to do business in your state, you could be a winner. Be sure to read the fine print, as some companies charge an up-front “application” fee that could turn the switch into a non-profit deal. And yes, reputable online insurance companies are a good way to go, as long as the dollars work.

Okay, I admit this can be accounting sleight of hand. But the savings are real, and if you add up all the insurance premiums you’ve paid over the years, you might be shocked to realize exactly how much that car is really costing you.