8 Ways to Lower Your Car Insurance Premium Costs
Oh, car insurance. We don’t like to pay for it every month, but we also don’t want to be without it when we need it most. Fortunately, there are plenty of ways to get coverage without spending more than you have to on your monthly premium—and we’ve got them all.
Want to make sure you’re getting the best deal possible? Stick with us as we cover the smartest ways to lower your auto insurance rates for good. Here are 8 ways to lower your car insurance premium costs:
Top Ways to Lower Auto Insurance Costs:
1. Buy an Insurance Cost-Friendly Car
Insurance companies don’t care how cool your car is, but they do care how much of a risk it presents. And that’s why the type of car you drive can directly impact how much you pay each month. Typically, cars with the lowest rates fall into the following categories:
- They’re inexpensive to repair or replace
- They’re driven by mostly safe, experienced drivers.
- They’re highly rated for safety features such as anti-theft devices, airbags, and anti-lock braking systems
Three of the least expensive vehicles to insure in 2020 were the Honda CR-V, the Subaru Outback, and the Jeep Wrangler, but your insurance company can give you a full list of options to suit your specific budget and lifestyle.
2. Ask About Auto Insurance Discounts
If you haven’t had any accidents or moving violations for a number of years, you’re in luck. Most major insurers give discounts based on your driving history, vehicle features, policy choices, and many more. Want to make sure you’re saving as much as possible? When you’re shopping around to find the best provider, ask about these tailored discounts that can help ease rates even further.
- Antitheft devices
- College students away from home
- Defensive driving courses
- Drivers ed courses
- Going paperless
- Longtime customer
- No accidents in 3 years
- No moving violations in 3 years
- Student drivers with good grades
3. Shop Around for a Better Rate
Car insurance prices vary widely by company, state, and even neighborhood—which is why shopping around is one of the smartest ways to lower your premium. Get at least three price quotes from different companies to ensure that you’re receiving all potential discounts—and the best rate possible. To make the most of your savings, do your comparison shopping on an annual basis, each time your policy is about to renew. It is smart to compare the best auto insurance rates online.
4. Increase Your Deductible
A deductible is what you pay before your insurance policy kicks in. When you increase your deductible, it means you’re agreeing to pay more up front in the event of a claim. In return, your provider offers a significantly lower monthly premium. But there’s an important caveat to keep in mind. You’ll want to be careful not to make your deductible too high. Increasing your deductible is a smart way to reduce your costs right away, but if you get into an accident, you don’t want to be faced with paying more out of pocket than you can afford.
5. Reduce Your Coverage
There are two ways that you can save on car insurance by reducing coverage. First, you can lower your policy limits. The second option is to take a close look at the details of your policy to determine if you can drop unnecessary types of coverage:
- Collision or comprehensive coverage: If you have an older car that’s worth little more than the deductible, this coverage type may not be cost effective—especially since you’ll still have to pay a deductible if you make a claim.
- Rental car coverage: No longer commuting to work? It might benefit you to drop the coverage that includes a rental car when yours is in the shop for repairs.
- Gap insurance: Also known as loan/lease gap coverage, this helps pay your auto loan if your car is totaled or stolen and you owe more than the car’s depreciated value. However, if your car loan is paid off or the balance is minimal, you can probably say goodbye to gap insurance.
When it comes to reducing your auto insurance coverage, make sure that you are still complying with your state’s insurance laws, as well as any coverage requirements from your lender.
6. Drive Less—and Get Paid for It
Insurance companies are in the business of calculating risk—and they use it to determine your monthly premium. If you drive a lower than average number of miles per year, you may get a significant discount from some carriers. Low mileage discounts can also apply to drivers who carpool to work, or to the recently retired who no longer have a daily commute. You may also want to opt for usage-based insurance, which includes:
- Pay-per-mile:This type of program creates a rate depending on how many miles you drive, and the discount varies from company to company.
- Pay-as-you-drive: These programs use electronically monitored technology to track your driving—via a mobile app or device that plugs into your car’s diagnostic port—which calculates your customized rate.
The price break you’ll see on your rate varies depending on your insurance company, but it can save a lot—especially when paired with other discounts. You may also be interested in learning about what factors affect car insurance rates.
7. Improve Your Credit
Research shows that the more effective you are at managing your credit, the fewer claims you’ll make—which is why insurers consider it when they calculate your rate. In fact, drivers with no credit pay 67% more for car insurance than drivers with excellent credit.
By gradually improving your credit, you’ll eventually start to see a drop in your insurance premiums. To establish a solid credit history, pay your bills on time, limit your credit use only to what’s necessary, and keep your credit balances as low as possible. You should also regularly check your credit score to make sure that it’s accurate—and report any potential errors.
8. Combine Your Insurance Policies
Most insurance companies will offer savings to their customers who buy two or more types of insurance—also known as “bundling”. A typical bundle combines auto and home insurance. However, some insurers will provide a discount for adding boat, RV, motorcycle, renters or life insurance to their auto policy. You may also see a drop in your rate for insuring more than one vehicle with the same company.
Watch Your Premiums Drop With Affordable Car Insurance
Looking for the best auto insurance rates possible? You’ve come to the right place. Thanks to our fast and affordable online auto insurance quotes, you can choose a plan and get your coverage in just minutes. Get yours today and join the other drivers who have lowered their monthly premiums!