How to Lower Car Insurance: Top Tips for Saving Money on Auto Insurance
Car insurance is a necessary expense, but that doesn’t mean you have to overpay. Many drivers wonder, “How can I lower my car insurance?” Fortunately, there are multiple ways to reduce your premiums while still maintaining adequate coverage.
In this blog post, we’ll explore the top strategies to lower your car insurance costs, ensuring you get the best value for your money.
How to lower your car insurance
Here are ways on how to lower your car insurance payment:
1. Shop Around for the Best Rates
One of the easiest ways to lower your car insurance premium is to compare rates from multiple insurance providers. Insurance companies use different formulas to calculate your premiums, meaning some may offer significantly lower rates than others for the same level of coverage.
Also Read: Does Progressive Have Auto Pay for Renters Insurance?
How to do it:
- Use online comparison tools to get quotes from different insurers.
- Contact local agents to inquire about discounts or special offers.
- Make sure to compare apples to apples by reviewing coverage limits, deductibles, and extra benefits.
2. Raise Your Deductible
A deductible is the amount you pay out of pocket before your insurance kicks in after a claim. Choosing a higher deductible can lower your monthly premium, but it’s important to ensure you can afford the higher out-of-pocket costs if an accident occurs.
Example:
- If you increase your deductible from $500 to $1,000, your premium might decrease by 10% to 20%.
3. Bundle Your Insurance Policies
If you have multiple types of insurance—such as homeowners, renters, or life insurance—consider bundling them with the same insurance provider. Many companies offer discounts when you purchase more than one type of coverage from them.
How to do it:
- Contact your insurer and ask about bundling discounts for auto and other insurance policies.
- Compare the bundled rate with individual policies from separate providers to ensure you’re getting the best deal.
4. Maintain a Clean Driving Record
Your driving history plays a major role in determining your insurance rate. Drivers with no accidents, tickets, or violations generally receive lower premiums than those with a history of traffic infractions or accidents.
Tip:
- Drive safely and avoid speeding tickets or accidents.
- Some insurers offer accident forgiveness programs, which prevent your rate from increasing after your first at-fault accident.
5. Take Advantage of Discounts
Insurance companies offer a variety of discounts that can help you save on your car insurance premiums. These discounts are often based on your driving habits, vehicle, and personal characteristics.
Read more: How much is auto insurance a month
Common discounts include:
- Good driver discount: For drivers with no recent accidents or tickets.
- Low-mileage discount: If you drive fewer miles than the average person, you may qualify for lower rates.
- Good student discount: Many insurers offer discounts for full-time students with good grades.
- Safety features discount: Cars with anti-theft devices, airbags, or other safety features may qualify for lower premiums.
- Multi-car discount: If you insure more than one vehicle with the same company, you might get a lower rate.
6. Improve Your Credit Score
In many states, credit score is one of the factors insurance companies use to determine your rate. Drivers with higher credit scores often receive better rates than those with poor credit. Improving your credit score can have a positive impact on your premium.
How to improve your credit score:
- Pay bills on time.
- Reduce outstanding debt.
- Check your credit report for errors and dispute any inaccuracies.
7. Drive a Low-Risk Vehicle
The make and model of your vehicle significantly affects your insurance premiums. Cars that are expensive to repair, prone to theft, or have high horsepower typically cost more to insure. On the other hand, vehicles with high safety ratings and low repair costs may come with lower premiums.
Tip:
- Before purchasing a car, research its insurance costs. Family sedans, minivans, and SUVs usually have lower rates compared to sports cars or luxury vehicles.
8. Limit Coverage on Older Vehicles
If you’re driving an older car that’s worth less than a few thousand dollars, consider dropping comprehensive and collision coverage. These coverages pay for damages to your vehicle, but if the car isn’t worth much, the insurance payout might not justify the cost of these coverages.
Tip:
- Use the Kelley Blue Book or similar resources to determine your vehicle’s current value before deciding to drop coverage.
9. Use Pay-Per-Mile or Usage-Based Insurance
If you don’t drive frequently, a pay-per-mile or usage-based insurance policy might save you money. These types of insurance programs charge based on how many miles you drive or your driving habits (such as speeding or hard braking).
How it works:
- Insurers typically provide a device or app that tracks your driving habits.
- Drivers with safe habits or low mileage often qualify for discounts or lower premiums.
10. Take a Defensive Driving Course
Many insurers offer discounts for completing an approved defensive driving course. These courses can not only improve your driving skills but also reduce your car insurance premiums.
How to get started:
- Contact your insurance provider to ask if they offer discounts for completing a course.
- Sign up for an accredited defensive driving course online or in person.
11. Review Your Policy Regularly
Car insurance needs can change over time, and what worked for you a few years ago might not be the best option now. Review your policy annually to ensure you have the right coverage at the best price.
Steps to review:
- Check for any new discounts you might be eligible for.
- Adjust your coverage as needed if your driving habits or vehicle has changed.
- Re-shop rates from different providers to see if you can find better deals.
Conclusion:
Lowering your car insurance is possible with a combination of smart shopping, safe driving habits, and taking advantage of discounts. By comparing rates, raising your deductible, and improving your credit score, you can significantly reduce your car insurance premium without sacrificing the coverage you need.
Make sure to review your policy regularly and explore options like bundling, pay-per-mile insurance, and defensive driving courses to maximize your savings. Taking the time to explore these strategies can lead to hundreds of dollars in savings each year, keeping more money in your pocket.