Car Insurance

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The 21st century has witnessed a significant rise in the cost of living. As such, consumers have been forced to reduce their spending on commodities and services that are considered as luxuries. Among the costs that have contributed to the rise in living costs is car insurance. In reference to the Financial Times, the cost of car insurance rose steadily in 2010 by close to seven times the inflation rate in the United Kingdom (Cumbo, 2011). This rise in car insurance, coupled with the high fuel costs has forced most consumers to seek for alternative means to cut down costs.

With this in mind, insurance firms have increased opportunities of earning discounts. To begin with, these firms have taken an initiative to advise consumers on the types of cars whose insurance cost is cheap. In an article that appeared in the New York Times magazine, Schultz (2010) argue that according to Insure.com, Porsche Carrera 911 GT2 had the highest insurance cost while smaller sports vehicles as well as minivans had the least insurance cost. Notably, the model of vehicle that one has contributes to the cost of insurance that is paid. High-performance vehicles tended to incur high insurance costs as compared to low-performance vehicles.

Apart from the model of the vehicle, another way of reducing car insurance costs is by keeping low mileage. Note that as mileage increases, risks also increase. Therefore, car insurance rates are high in cases whereby the mileage is high. In the United States, most insurance firms have begun offering pay-as-you-travel policies (Furchgott, 2010). These policies allow electronic verification of miles traveled in return for discounts on car insurance. Moreover, it was reported that people were more comfortable when they were monitored to help them reduce their car insurance costs.

There are other methods that are used to reduce insurance costs. However, it should be noted that most of these methods are discounts-based. For instance, cars owners who insure their vehicle through the Co-operative car insurance that is offered by The Co-operative Group in the United Kingdom could save up to £95 (The Co-operative Group, 2011). Furthermore, one could earn a discount by taking out car insurance online as well as up to 70% no claim discount to drivers (The Co-operative Group, 2011). In this way, most consumers are finding more and more ways of reducing their car insurance cost and as such, reduce their cost of living.

References

Cumbo, J. (2011). Car Insurance rises more than £200 a year. Financial Times. Retrieved August 10, 2011, from http://www.ft.com/cms/s/2/e838ac40-27ca-11e0-a327-00144feab49a.html#axzz1UhtaFZLI.
Furchgott, R. (2010). More Consumers Are Letting Insurers Monitor Their Mileage. The New York Times. Retrieved August 10, 2011, from http://www.nytimes.com/2010/12/26/automobiles/26INSURE.html?ref=autoinsurance.
Schultz, J.S. (2011). Cars you can insure cheaply. The New York Times. Retrieved August 10, 2011, from http://query.nytimes.com/gst/fullpage.html?res=9C02E2D81E3DF934A15752C1A9669D8B63&ref=autoinsurance.
The Co-operative Group. (2011). Car Insurance. Retrieved August 10, 2011, from http://www.co-operativeinsurance.co.uk/servlet/Satellite/1204529928544,CFSweb/Page/Insurance?WT.svl=footer.