Have you ever asked yourself or your friend if your car insurance goes down after 6 months? Well, you are at the perfect place to find the answer to such a question.
Car insurance is one of those necessary evils. We all have to have it if we want to get out and about on the roadway, however, the inconsistent, ever-changing rates, new insurance companies popping up every few months, and state-level legislative changes keep it in a constant state of flux.
So, does car insurance go down after 6 months? Yes, your car insurance rates will go down after six months only in certain situations. If you already have a good credit history and no previous lapses, it might not. Much of it just depends on your status at the time of your policy purchase.
Insurance companies are more than happy to sell you a “dream come true” policy, only to renege on that monthly payment after you’re well into the policy.
They’ll make all kinds of arbitrary claims as to why, however, it all boils down to more money for them in the event that they “might” have to cover an accident.
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Why Do Insurance Rates Sometimes Drop After 6 Months?
It’s basically a risk period or, you could consider it as a probationary period that usually applies to customers who are new insurance policyholders, such as drivers who are young and just got their license, those who haven’t been covered in a while, and those who have bad credit.
After six months have passed, an auto insurance company will generally calm down and accept the fact that you are making your payments on time and your reliability rating improves with them, lowering your overall cost.
If you purchase a new insurance policy, however, and you already have a positive, reputable history that includes good credit, not missing payments, and no lapses on your history, then the odds are against you for getting a lower rate after six months.
Why Do Auto Insurance Rates Fluctuate All Of The Time?
Another one of the irritating things about car insurance is that the monthly payments you make are constantly changing.
A lower rate in six months is just the tip of the iceberg and that’s only available for some.
State Laws Change
The legal requirements for insurance—since most, if not all states now mandate liability coverage at the very least—are constantly changing. In some states, the minimum requirements are more or less than others.
Much of it depends on what happens in the state throughout the year, increases or decreases in accidents on the highways, lawsuits, no coverage accidents, and so forth and so on.
There’s always causation for every new reality when it comes to shifting auto insurance rates.
Insurance Companies Change Policies All Of The Time
Auto insurance companies change their rates all of the time of their own volition. They base it on the same things that legislative bodies base their changes on.
An insurance company will take a look at the previous year’s trends and they’ll look at them from the perspective of seasonal changes and how they affect drivers on the road.
They will base their coverage increases on that, rather than whether or not you’re accident-free and pay on time.
Claims In Your Zip Code
Believe it or not, other people’s bad behavior, mistakes on the roads, and how many claims are filed can affect your rate. It’s an unfortunate side effect of business that insurance rates are determined by group dynamics, not by your personal choices.
Your zip code means a whole lot more to your insurance company than how many customers they have there.
If accidents increase in your area, your rate is likely to go up in response.
How To Decrease Your Auto Insurance Rate
First and foremost, maintain a clean driving record. Even something as insipid as a parking ticket can cause your insurance policy to skyrocket.
If you’ve maintained a clean driving record, the likeliness that you’ll get a rate decrease at the end of six months increases.
- Shop around when necessary
- Raise your deductibles
- Reduce your coverage when your vehicle is paid off
- Bundle your coverages
Any time you have an increase in your policy, you should start looking around.
You can play the little game of insurance hopping so long as the policy terms don’t force you into higher expenses for shorter timeframes.
Raising your deductible is risky since it means you will pay more out-of-pocket expenses if you get into an accident. But it will lower your monthly costs to something more manageable.
Some auto insurance companies have a limit on how high you can place your deductible, so be sure to do your homework beforehand.
When you pay off your vehicle and you are the sole owner, you can switch from full coverage insurance to liability only, significantly reducing your monthly insurance bill.
Like raising your deductible, there is some risk involved, as liability doesn’t cover your own damage if you’re liable.
When you bundle home and auto insurance—or maybe a boat, RV, or renter’s insurance—you can typically save between 5% and 25% on each policy that goes into the bundle.
While it means a higher monthly payment, it also means you’ll pay less than you would individually.
What Else Causes Car Insurance To Go Down?
Just like there are a lot of situations that will cause auto insurance rates to go up, there are also several scenarios that will drive it down as well. Insurance rates may fluctuate upward more often than downward, however, it does go both ways.
- Aging Vehicles
- Turning 25
- The vehicle is paid off
Many insurance agents will tell you that it costs more to insure older cars than newer ones because older cars lack the safety features and innovations that come with a brand new vehicle.
Statistics say the exact opposite, so don’t listen to them.
Older cars are often far less costly to insure simply because older cars depreciate or have depreciated enough that there is less risk insuring an older car than there is a new one.
Vehicles depreciate on average up to 40% of their original value in just five years.
Marriage will also lower your monthly auto insurance bill.
Marriage is seen as a sign of stability and responsibility, so insurance companies factor that into the overall risk analysis that goes into your monthly premium.
Turning 25 years of age, like marriage, is also a risk factor that’s proven through statistical analysis. Up until the age of 24, people get into more accidents.
However, that number falls off beginning with 25, so prices for an auto insurance policy are cheaper.
A paid-off vehicle tends to lower the price as well. Not only because you can switch to liability but it also raises your credit score and a higher credit score means a lower insurance premium.
Plus, it’s another sign of responsibility and stability, which is a significant factor in determining your rate.
All Things Considered
You may be one of the lucky ones that get a rate decrease when six months is up, however, you shouldn’t count on it.
Also, if there is a decrease, it’s probably not going to be anything spectacular.
Usually, those decreases are based on a certain type of customer with a history.
That doesn’t mean you can’t decrease the overall cost of your policy in many different ways.
The thing about auto insurance is that there is a lot of options out there. If you don’t like your current one, drop them and move on.
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