Car insurance is one of the biggest recurring costs of owning a vehicle, and premiums have risen sharply in recent years in many states. The good news is that drivers have more control over their rate than they think. Here are twelve proven ways to pay less without giving up the protection you need.
1. Shop around every year
Insurers price risk differently, so the same driver can receive very different quotes for identical coverage. Compare at least three quotes at each renewal, and always compare the same limits and deductibles.
2. Bundle your policies
Buying auto and homeowners or renters insurance from the same company often unlocks a multi-policy discount.
3. Raise your deductible
Moving your collision and comprehensive deductibles from $500 to $1,000 can lower your premium noticeably. Only do it if you have enough savings to pay the deductible after a claim.
4. Ask about every discount
Common discounts include safe driver, good student, defensive driving course, multi-car, anti-theft device, paperless billing, automatic payments and paying the full term upfront.
5. Try usage-based insurance
Telematics programs track driving habits such as mileage, braking and time of day through an app or device. Safe, low-mileage drivers can earn significant savings, but risky driving can raise rates with some insurers.
6. Keep a clean driving record
Accidents, speeding tickets and DUIs can raise premiums for several years. Driving carefully is the most reliable long-term discount.
7. Improve your credit
In most states, insurers use a credit-based insurance score to set rates. Paying bills on time and reducing debt can help over time. California, Hawaii, Massachusetts and Michigan limit or ban the use of credit in auto insurance pricing.
8. Choose your next car wisely
Insurance costs vary by model. Vehicles with strong safety ratings, lower repair costs and low theft rates are usually cheaper to insure. Get a quote before you buy.
9. Drop collision and comprehensive on an older car
If your car is worth little, the cost of physical damage coverage may exceed what you could ever receive from a claim. A common guideline is to reconsider it when the annual cost exceeds about 10 percent of the car’s value.
10. Review your mileage and usage
If you now work from home or drive less, tell your insurer. Lower annual mileage can reduce your rate.
11. Add a teen driver carefully
Teen drivers are expensive to insure. Ask about good student and driver training discounts, and assign the teen to the least expensive car on the policy if your insurer allows it.
12. Do not cut liability to the minimum
Liability coverage protects your savings and income if you cause a serious accident. Reducing it to the state minimum is rarely a smart way to save. Cut costs with discounts and deductibles instead.
The bottom line
Combine two or three of these strategies, especially comparing quotes and asking about discounts, and most drivers can lower their premium. Learn more in our auto insurance guide.
This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.
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