10 Easy Ways to Lower Your Car Insurance Costs
By KBB Editors 01/13/2022 12:02pm
Car insurance can be a hefty monthly expense depending on various factors, some of which are out of your control. However, as with most things involving your vehicle, there is a way to reduce this monthly or annual expense. From good driver discounts to advance payments, read on to find ways to lower your car insurance costs.
How to Save Money on Car Insurance
In order to find the best car insurance discount, you will need to do some scrolling. But there is a discount for you. Try these ways to reduce your car insurance costs if you think you’re overpaying for coverage. With a few easy hacks, you can lower your premiums and reduce your monthly bills.
Ways to Lower Your Car Insurance Costs
1. Choose the Right Coverage
One of the biggest factors influencing your car insurance premiums is the type of coverage you have. Check with the laws and requirements of your state because you will pay less for a bare-bones policy than you will for collision and comprehensive coverage. You can also choose a plan with a higher deductible to lower your car insurance premiums.
Choosing a different plan is a great way to reduce your costs, but remember that reducing your coverage or switching to a high-deductible plan can also increase your risk. If you take this approach, understand that you may have to pay more out of pocket if you make a claim.
Don’t forget you can compare car insurance rates from various companies before you decide on a policy.
2. Pick the Best Vehicle Insurance Provider
The easiest way to save money on your car insurance is by comparing insurance providers before choosing your plan. Each car insurance company uses slightly different pricing models, so the best provider for you will depend on how well-matched you are to the insurance provider.
For example, one company could have better rates for new drivers while another company could be better for a high-mileage driver.
3. Bundle Insurance Together
You can get better rates by bundling multiple types of insurance. Ask your insurance agent about how much you can save by combining auto insurance with homeowner’s insurance, renter’s insurance, or even small-business insurance.
Each type of coverage will remain a separate plan with its own deductible. However, using the same provider can lead to overall savings across your plans.
4. Pay Car Insurance Premiums in Advance
You can typically get a discount by paying for the entire insurance term in one lump sum rather than in monthly installments. Keep in mind that this is only a good idea if you have the available funds.
If you need to use a credit card and carry a balance to cover the total cost, you’ll likely end up paying more in credit card fees than you’d save on your auto insurance discount.
5. Take a Defensive Driving Course
Another easy way to lower your car insurance costs involves just a small investment upfront for a multi-year premium deduction. Many insurance companies provide discounts for drivers who take an approved defensive driving class. This can be a helpful way for drivers who have been in an accident to reduce the points on their license, and it can also lower the rates for drivers who have a clean driving record.
The specifics can vary significantly by state and insurance provider. For example, in New York, a 6-hour course can cost about $30, and drivers can get up to a 10% insurance premium reduction for three years.
6. Get a Low-Mileage Discount
Insurance companies offer discounts to those who drive less. If you’re retired, live close to work, frequently take public transportation, or don’t drive extensively, a low-mileage discount can help you avoid overpaying for car insurance.
Check with your insurer to know if you qualify for this easy way to lower your car insurance costs.
7. Improve Your Credit Score
When you get your insurance quotes, insurance providers may consider your credit score if it’s legal to do so in your state. This can mean that improving your credit score will help you to lower your base rates.
The first step to improving your credit score is to check your credit report. Resolving any issues or inaccuracies can be a quick fix that can have a big impact on your insurance rates. Also, take steps to gradually improve your credit score through financial practices such as paying your bills on time.
8. Opt-in to a Usage-Based Insurance Program
Some providers offer discount programs based on your actual driving habits depending on the state where you live. These programs typically use a telematics device installed in your car to track driving behaviors such as hard braking, the amount of driving, and the time of day you drive.
For example, State Farm uses Cambridge Mobile Telematics and Progressive offers Snapshot. GEICO offers the DriveEasy program and Allstate, Drivewise.
Usually, there’s a discount for signing up. Check the details to find out what exactly is being monitored by your provider and the qualification requirements. It’s also a good idea to double-check that your rates won’t increase if you’re classified as a risky driver.
9. Find Other Available Discounts
You can also access insurance discounts through your affiliations, car features, and behaviors.
Ask your agent about:
- Safe driving discount
- Anti-theft device discount
- Digital statement discount
- Good student discount
- Military discount
- Workplace or organization affiliation discount
10. Choose the Right Car
Insurance rates are also influenced by the type of vehicle you insure. If you’re serious about reducing your car insurance rates, you could trade in that sports car for something more insurance-friendly. Expensive cars with high damage risk are less likely to get a cheap rate. The cheapest cars to insure are usually standard model vehicles that are least likely to be stolen and have top safety features.