You may have recently noticed the steep cost of car insurance policies.
Experts blame it on inflation, supply shortages and expensive auto repairs. But AAA says you can save money by enrolling in a telematics program through your insurance company.
Telematics programs offer insurance companies more insight into a driver’s habits to better assess risk by recording data from your car and can be used to provide discounts to drivers who avoid accidents and other dangerous situations, according to Bankrate.
“So that basically is when you have a device put on your vehicle that allows or basically sends data back to your insurance provider regarding your driving behaviors,” said Ragina Ali, manager of AAA’s public and government affairs in Maryland and D.C.
“People who drive safely and don’t have sudden stops, don’t tailgate, abide by the speed limits, this is certainly a great option for them,” Ali added.
She suggested other ways to save big bucks on high auto insurance rates.
“You can also take a defensive driving course,” Ali said. “Many providers also offer good student discounts, teen driving discounts.”
She also recommended investing in a multi-policy plan through your insurance carrier.
“If you can incorporate your home policy, your life insurance policy, your auto insurance policy all under one policy, one carrier, there’s certainly significant discounts for that, as well as if you have multiple vehicles,” Ali said.
Some other options to save money include paid-in-full discounts, paperless billing and automatic payments.
The AAA study found that the average cost of owning and operating a new vehicle has significantly increased in 2023, with car owners paying $12,182 a year or $1,015 a month.
“This is a sharp increase from 2022,” AAA outlined in a press release. “When the average yearly cost was only $10,728, or $894 monthly.”
The overall average manufacturer’s suggested retail price (MSRP) of the new vehicles in their 2023 “Your Driving Costs” study is $34,876, according to AAA. That is is $1,575 (4.7%) higher than last year.
The release also noted that the MSRP does not always correspond to a car buyer’s actual purchase price; that price tends to depend on product demand.
“Furthermore, a higher sticker price directly impacts finance costs,” AAA said, “With this year’s vehicles boasting an average annual finance charge of $1,253 — a staggering 90% increase from the previous year.”
