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If you are shopping for new car insurance (or updating your current policy), one of the factors to consider when getting a quote is choosing the deductible amount. It might seem enticing to pick the highest deductible since that often equates to a lower monthly premium. But saving a few bucks in the short term might mean you pay more in the long term. Let’s break down how car insurance deductibles work, with the help of our friends at The Zebra.

Your car insurance deductible is the amount of money you have to pay if something happens to your car before your insurance kicks in, after a covered event (such as a crash, theft or weather damage). For example, if your car needs $2,000 in repairs and your deductible is $500, you will have to pay $500 and your insurer will cover the remaining $1,500. Many insurance providers (including Metromile) will take the deductible out of the indemnity payment (the money you receive from a claim), or the deductible will be paid directly to a repair facility if you choose to fix your car. Car insurance deductibles work differently than other types of insurance deductibles, such as health insurance. Your health insurance deductible applies across the calendar year, but your car insurance deductible will be applied for each claim you file. So if you submit two car insurance claims in a year, you will have to pay your deductible each time.

So how do you choose the right deductible amount for your needs? If you choose a higher amount, there is less chance that the insurer will have to help pay for damage, so your monthly premium might be lower. If you choose a lower deductible, your premium might be higher, but that means you will have to spend less money in the event that something happens to your car. The Zebra advises that you shouldn’t just choose a high deductible in hopes that you will never have to make a claim. There are always things beyond our control (like vandalism and bad weather), so if something happens and you can’t pay for repairs, that’s bad news. …

This blog post was written by Scotty Abramson, lead analyst on the Earnest growth marketing team and happy Metromile customer.

I work and live in San Francisco. After one awesome car-free year, I heard the call of Lake Tahoe, Big Sur, and Napa. It was time to get a car to better explore the region.

However, I grappled with whether to lease or buy a car. First I had to figure out how many miles I would be driving per year (around 10,000), the type of car that met my current needs (a sporty hatchback), and my car budget (between $200 and $300 per month). I realized a lease was probably the best fit for me. Then I became obsessed with understanding how a car lease actually works.

When you lease a car you are essentially paying the difference between the current purchase price and the price the manufacturer is willing to buy the car back for at the end of the lease. Divide that number by the length of your term, add interest, and you roughly have your payment.

After a week of intense car-lease shopping with multiple dealers, I signed a three-year contract for a VW GTI. So far, it’s been great and I love driving it. I even learned so much in the process I wrote a detailed blog about how I negotiated my lease to get the best deal.

As I this was my first time getting my own new car, I also had to get insurance. Given my expected low mileage per year, and my preference for handling transactions through my smartphone, Metromile made perfect sense for me. So far it’s been great—it was fast to get insured, it’s the right price, I can track my trips through the app.

So if you’re trying to decide between buying and leasing, it pays off to run the numbers and then negotiate every single cent. The same mindset should apply to your insurance. Happy driving!

Shopping for a new car is exciting, but figuring out how you’re going to pay for it can be downright confusing. Pay in cash? Buy or lease? It will depend on your financial situation and your lifestyle but we have some advice to help you decide.

1. Paying in cash Very few people actually pay cash for a new car, but if you’ve been saving and don’t want the stress of monthly payments hitting your budget, paying cash can be the best option. First, paying cash means no interest costs or financing fees, which can add up. You’ll also be able to do what you want with it, and when the time comes it will be easier to sell since you hold the title. The only downside? If paying cash is a squeeze on your savings, consider leasing or financing. Cars depreciate the moment they drive off the lot!
2. Financing This is the most common payment option and basically means you’ll make monthly payments for a set number of months. Many customers finance through the dealership, but you have the option of using a bank or credit union. You will have to make a down payment which can be 10-20% of the car’s purchase price and of course, you’ll pay interest. Aside from the financial aspects, if you plan to drive a lot or anticipate a lot of wear and tear on the car, financing is probably the best option.
3. Leasing If you’re a low-mileage driver like most of our Metromile customers, or you like getting a new car every few years, leasing is a great option. Basically, leasing is like renting. You pay a monthly payment for a set time period which is often lower than financing a car and can have a lower down payment. Plus, leased cars are under warranty so almost all repair costs will be covered. You will be given the option to buy at the end of lease as well! The downsides? Since you’re really just renting the car you aren’t building any equity and if you go over your mileage, it can be costly.

No matter your payment choice, be sure to negotiate and compare prices! And, don’t forget, with every new car comes the need for car insurance. If you don’t drive a lot, you could save a lot with Metromile’s pay-per-mile insurance. Get a quick quote now to see how much.

Bells are chiming, families are celebrating; it must be wedding season! If you’ll be exchanging vows in the coming months, there are a few things to consider aside from what to pack for your honeymoon. One of which is how to handle car insurance. The seemingly simple task might be a little more complicated than originally anticipated, so we’ve compiled a list to check off following your new union. Take it from Metromiler Lauren Hartung, who recently got hitched!

1. Moving in together after the wedding? Make sure to update your address on your driver’s license and car insurance (among everything else).

2. Changing your last name? Update your information with the DMV and your car insurance provider. You’ll likely need your marriage license to do this, and make sure you’ve already updated your name with the social security office for an official name change.

3. Married people get into fewer accidents than their unmarried counterparts. We combined our car insurance to one policy and saved money on our monthly premiums – plus, it was much more convenient to only pay one car insurance bill instead of two. We signed up for per-mile insurance when we moved to the city and it is saving us about $60/month! …

Graduation is an exciting and significant milestone, but starting a new chapter in life can mean some big financial decisions ahead. Whether it is you or a family member that is sporting the cap and gown, purchasing a car is a tempting next step for a new grad. However, with newly acquired freedom comes newly acquired responsibilities. What car insurance should be purchased now that the parentals might be stepping back? Should a car be bought new or used? Leased or paid for in full?

Before you decide if purchasing a car is a good idea, assess your projected monthly income. 50% of millennials say they are living paycheck-to-paycheck and unable to save for the future, which is a slightly scary stat. Even more concerning is the 40% that say they feel overwhelmed by their debt. Most financial advisors would suggest getting your finances in check before adding another expense to the list. If the city you plan to live in has public transportation, try that out before you decide to buy a car. Your new job might even provide commuter benefits! You could also check out local carpooling programs, or car sharing services such as Getaround. And if your commute isn’t far, try investing in a less-expensive vehicle like a bike or scooter.

If you decide that purchasing a car is the right choice, buying used is probably your most economical option. Our friends at The Zebra even compiled a list of the top 10 used cars that give you a “bang for your buck”. Once you’ve found the perfect car, it’s usually better to pay in full since you won’t pay interest, but sometimes you can luck out with a favorable interest rate.

Time to tackle the next big decision: choosing your new car insurance. We are slightly biased in this area, but if you are going to be driving less than 10,000 miles a year (around 200 each week), you could find significant savings with pay-per-mile insurance. If you plan to use your car primarily for road trips, family visits or grocery runs on the weekends, per-mile insurance is for you. Our low-mileage customers are saving an average of $500 per year!