How to Lower Your Car Insurance the Right Way
Everybody wants to save more money. What better way to do that then to lower your car insurance premium? The average American driver pays around $889 per year for their car insurance. However, there are a lot of factors that can determine whether you’re paying more or less than this average.
The best way to understand how to save money on your car insurance is to first understand all the factors that affect your policy. Join us as we share the top eleven tips for lowering your auto insurance rates.
11 Best Tips for Lowering Your Car Insurance
- Lower Your Limits & Raise Your Deductibles
- Compare Car Insurance Quotes
- Look for Car Insurance Discounts
- Improve Your Driving Habits & Behavior
- Improve Your Credit Score
- Add an Auto Theft Device
- Buy a Less Expensive Car
- Move to a Different Area
- Bundle Your Home & Auto
- Consider Pay-Per-Mile Car Insurance
- Consider Group Insurance as an Option
Adjust Your Coverage, Limits, and Deductibles
If you have the means to do so, raising your deductible can be a great way to reduce your car insurance costs. Raising your deductible reduces how much you pay in monthly premiums, but it also means that when you do need to file a claim, you’ll have to pay more up front before insurance pays the rest of your claim. If you don’t have the financial means to pay $500-$1,000 for repairs, then this may not be the best option for you.
Another way to reduce your overall premium costs would be to lower your coverage limits. Most states have a minimum requirement to meet when it comes to liability coverage limits so if you already meet the minimum, then you can’t legally go any lower. If you do have room to reduce your liability limits, then this is an option. Proceed with caution though! If you lower your limits too low, you may put yourself at risk of being under-covered. If you get in an accident and you surpass your policies limits, you will be responsible to cover those costs. This means the other party involved could sue you if you were at fault.
Yet another option would be to drop coverages that you feel may not be needed. If you currently have collision, comprehensive, personal injury protection, or uninsured motorist coverage, dropping these could lower your car insurance. This comes with the same caveat that lowering your liability limits brings. You become more at risk when an accident does occur so weigh out your options. Keep in mind that if you are currently paying off a loan for your car or leasing the vehicle, you are most likely required to hold a certain amount of collision and comprehensive coverage. These coverages levels are established by your car loan lender.
Compare Car Insurance Quotes from Different Companies
This seems simple enough, right? You don’t really know how much you can save unless you compare quotes from multiple insurers. With hundreds of companies out there that all do the same thing, there must be someone with cheaper rates.
To properly compare rates, make sure each quote has the same coverage limits and deductibles. This way you will get an apple to apple comparison. If you want to save time by comparing rates, side by side from 60+ companies all at once, then try out our comparison tool below. You’ll only need to put in your information once, instead of putting in your information each time for every insurer. We return real-time, locked-in rates from multiple reliable carriers, all at once.
Look for Auto Insurance Discounts
Don’t forget about the car insurance discounts. It’s basically free money that you are just leaving on the table if you’re eligible for it and not taking advantage of it. Talk to your agent to find out about any discounts that your insurer offers. We have gone ahead and listed a few of the most popular ones.
Car Insurance Discounts List
- Good Student Discount
- Good Driver Discount
- Senior Citizen Discount
- Low-Income Discount
- Online Payment Discount
- Paperless Discount
- Low Mileage Discount
- Accident-Free Discount
- Driver Affiliation Discount
- Customer Loyalty Discount
Improve Your Driving and Obey the Law
If you’re a bad driver with lots of tickets and multiple accidents, it makes sense that your car insurance will be directly affected by higher policy coverage rates. To start reducing your insurance costs, you must start improving the way you drive.
It can be challenging to start bettering your driving behaviors but one great place to start is by taking a driver improvement course. This may not help directly lower your rates, but it will put you in the right direction. If you just got a speeding ticket, sometimes you can have the ticket reduced or removed from your record by taking one of these driving courses. Speak with the judge to see if this is a viable option.
If you feel like you drive too fast or brake too abruptly, there are also phone apps out there that can help track your behaviors. You can review how you drive and work from there to improve upon. Many companies, like Allstate, are now actually providing telematics devices that you can plug into your car to track your driving behavior. If you obey the laws and drive safely, you can lower your premium. Let’s make our roads a safer place!
Raise Your Credit Score
Yes, your credit score can affect your car insurance premium. In some states, using your credit score as a pricing factor is not legal, but in most states, it’s commonly used. Many insurance companies use your credit score to leverage out risk by its correlation with financial stability. If you have a bad credit score, you will have more expensive rates.
Improve your credit score by paying off debt, paying your bills on time, keep your credit card balance low, avoid opening multiple credit cards, and keep long-standing credit card accounts active. If you don’t have a credit card and your credit score is low, consider a secured credit card to help build your credit.
Install an Auto Theft Device
By installing an auto theft device in your vehicle, you reduce the risk of it being stolen. This reduces the chances of having to make a comprehensive claim which will reduce your overall risk as a customer. By taking these preventative measures, you may decrease your premium. Some popular theft prevention devices include an audio alarm, video surveillance, GPS tracking systems, and kill switches.
Drive a Cheaper Vehicle
The value of your car or truck will directly reflect the premium you pay. If you drive a newer, more expensive car, you would expect to pay more for car insurance. The cost of repairs and parts are also becoming more expensive which may increase your coverage premiums. If you’re having trouble paying your monthly premiums and you want to lower your car insurance costs, drive a cheaper car.
Move to a Safer Neighborhood
The location of where you live can affect your auto insurance rates. Different cities have different driving patterns, weather patterns, accident rates, and theft rates. All of this affects the risk involved of driving and owning a vehicle in that area. You can expect higher rates if the area you reside in has higher crime levels, higher traffic, more accidents, and if it is more prone to natural disasters like flooding, tornados, or hurricanes.
Bundle Your Home & Auto Policies
Many may consider this to be a car insurance discount, but we feel that this should have its own spot on this list. If you own a car and a home, there are many insurance companies that will incentivize you to bundle your home & auto insurance policies by offering a discounted price. Before committing to bundle your insurance policies, make sure to shop around from many insurers. You may find a better deal at another company, or that not bundling at all is a cheaper solution. Do your research by comparing.
Is a Pay-Per-Mile Insurance Company Right for You?
How much do you drive throughout the day? Do drive less than 10k miles a year? If so, you may want to consider a pay-per-mile insurance policy. This concept is a recent innovation within the insurance industry that seems to be taking off with great success. Check out companies like Metromile and Esurance for the latest on their pay-per-mile programs.
Are you Eligible for Affinity Group Insurance?
You may be eligible for greater cost savings if you belong to an organization that offers a group auto insurance plan. An affinity group could be a business, fraternity, sorority, club, or other groups like AARP or AAA. These groups offer discounts for joining their internal insurance programs. Check to see if any organizations you belong to offer this. You may be able to lower your auto insurance premium.
Remember These Insurance Saving Tips
These insurance savings tips are intended for you to carry on with you throughout your driving career. Situations change that may directly affect how much your insurance costs so it’s important to stay up to date on how much you’re paying. Don’t forget to check back in to make sure you’re not paying too much for your car insurance.