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UPDATED: Apr 2, 2020
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It’s always nice to save money. It’s even nicer to save money regularly on something like your car insurance.
As you probably already know, auto insurance is one of those things that you can’t avoid buying. Individuals who own their vehicle outright and have a clean driving record may be able to get away with paying low premiums, but borrowers and lessees don’t fare so well.
Full coverage requirements from lenders and past infractions can lead to high premiums for extended periods of time. Fortunately, there are ways to save money off of your premiums if you’re familiar with all of the discounts that insurers offer.
One of the easiest ways to save money on car insurance is to compare rates and find the best one for your situation. Enter your ZIP code into our free comparison tool above to see how much you could save.
Before you say no to the LoJack you’re offered in the finance office at your dealership, make sure you know how this vehicle feature can reduce your premiums:
What is a LoJack?
There are so many different types of alarm systems being offered by dealers that all of the terms can easily get jumbled together.
It’s important that you can differentiate between a LoJack system and another type of anti-theft system before you make a large investment into your car.
A LoJack system isn’t necessarily a theft deterrent like many other passive and active alarms that are offered to new car owners.
Instead, it’s a vehicle theft recovery system that’s meant to be used to locate and recover a vehicle after it’s been reported stolen.
The device that’s installed into the car will work with police to send a signal showing the car’s current whereabouts. Cars installed with a LoJack device have a 90 percent recovery rate.
How much does a LoJack system cost?
How much you’ll pay for your LoJack system depends on where you buy it and what type of system you have.
The standard Stolen Vehicle Recovery System has a price tag of $695 for the initial installation. If you buy the advanced program with Early Warning features, you’ll pay $995.
Some dealers will waive certain fees. Unlike some other security systems, LoJack only requires a one-time payment.
If you elect to pay the fee to install LoJack in your vehicle, there will be benefits beyond just know that your car will be recovered quickly.
For taking a step to mitigate losses before anything even happens, you’ll be rewarded in the form of a discount. Not all insurers offer reduced premiums for LoJack, but a majority do offer discounts as an incentive.
If you’re not quite convinced that paying nearly a thousand dollars is worth it, it’s important that you research how much you’ll save.
It doesn’t make a lot of sense to purchase the LoJack strictly for the discount because the price reduction isn’t that significant. The discount will typically save you between five and 10 percent off of some of your coverage options.
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The Discount Isn’t Off of Your Total Premiums
If you would save up to ten percent on a $1500 annual premium, you’d be saving nearly $150 per year for having a LoJack system.
Unfortunately, this is a common and dangerous assumption that many consumers make. The mistake that you’re making is the assumption the discount is applied to each and every coverage option that you carry.
When you have a LoJack system installed in your car and your carrier offers a discount, the discount that’s being advertised by your insurer will only reduce your comprehensive premiums.
It won’t reduce any of the following coverage options on your policy:
- Any other coverage
What is the average annual savings for having LoJack?
While average premiums vary significantly from state to state and person to person, looking at nationwide averages can help you estimate how much you’ll save.
On average, you will pay around $143.45 per year on comprehensive coverage alone, with a $500 deductible. If your carrier offers a seven percent discount, you’ll only be saving $10 per year.
Why don’t you save on other premiums?
If you’re only investing in LoJack to save money on your insurance, the price reduction isn’t big enough to make the investment.
You would have to have your car for 70 years just to make up for the cost of the device. Some consumers are shocked that a LoJack only saves them money off of comprehensive coverage, but it does make a lot of sense.
Having a stolen vehicle recovery system doesn’t make you a safer driver.
Since it doesn’t change how you drive or your likelihood of having an accident, it won’t affect your liability and collision premiums. The only thing that the system does is reduce the time it takes to recover a stolen car.
Since the car is recovered quicker, settling the claim will cost the insurer less money. Comprehensive pays for theft losses and therefore that’s where the discount is applied.
Can you stack policy discounts?
Insurers don’t offer just one discount per policy. You’ll be given all types of incentives to install alarms in your vehicle, stay loyal to the insurer, and keep a clean driving record.
Most discounts are stackable but you probably will only be able to take one type of alarm discount. That limit means you can only save for an active, passive or LoJack system.
If you’ve asked around and found that the LoJack is the right system for you, ask the installer to give you a certificate. This certificate can be presented to your agent so that your discount can be added immediately and not at your renewal.
Buying a car with LoJack will save you, but the savings isn’t huge. The best way to save money off of your premiums is to shop around.
Use our rate quote tool to compare premiums with the leading insurers in your area and you’ll have the power to find the best rate. Enter your ZIP code below to get started.