Of all of the moving parts of a car insurance policy, it’s the deductible that has the biggest impact on your premium. Your deductible is the part of an insurance claim for which you are financially responsible, so, obviously, the higher your deductible is, the lower your premium will be.

Coming out-of-pocket for an insurance claim is something most people want to avoid, so the idea of paying a “few dollars” more for a low deductible, seem like a more appealing option. But what they fail to consider is that, over time, the additional premium can add up to hundreds of dollars a year, and thousands over a longer period, for an added feeling of comfort that wasn’t even necessary. If you do your part by driving safely and defensively, you should let the insurance company do its part in that rare event when you might need them.

Your best course of action is to choose the highest deductible and save the difference you would have paid on a low deductible in an emergency fund. This should be a default strategy if you buy an older model. If you create your own deductible, you keep the money working for you. The insurance company is already making enough profit on your premium. .