How to Lower Your Car Insurance
Shopping around, bundling your coverage, and taking advantage of discounts are just a few ways to lower your car insurance rates.
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UPDATED: Sep 27, 2022
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- Car insurance rates are based on several different factors, including driving record, credit score, location, and age
- Drivers have more control over their car insurance premium than they think
- Discounts are not the only way to save on your car insurance premium
After reviewing your driving record, credit score, location, age, and a few other things, your car insurance company will crunch some numbers to come up with your premium.
When you see the initial cost of your car insurance, it may seem unaffordable. However, you have more control over your rates than you think. Keep reading to learn how to get lower car insurance rates.
Ways to Save Money on Car Insurance
Here are some ways to save on car insurance.
Increase Your Deductible
When you purchase comprehensive or collision coverage, a deductible is attached. This means if you get into a car accident, you’ll pay a fee before insurance covers the cost of repairs or replacement.
Typically, car insurance deductibles range from $200 to $1,000, with a lower deductible coming at a higher cost. Increasing your deductible can help you shave some dollars off your insurance premium.
You just want to make sure you can cover this deductible in the event of an accident.
Look Into Discounts
All car insurance companies offer drivers various discounts. Of course, drivers must meet certain qualifications to access these savings.
For example, if you have a teen driver, which can cause your insurance to increase, with GEICO, a discount of up to $200 is available for high school and college drivers.
Visit your insurance company’s website or contact an agent or customer service to determine what discounts are available to you.
Compare Quotes From Different Insurance Companies
Insurance companies use different rating systems when calculating insurance premiums, so the cost will vary between companies. To avoid paying too much, you can switch car insurance companies.
Drivers should get quotes from various insurance companies and compare the costs. If you are considering going with the cheapest option, double-check that the policy will include at least the state minimum required insurance.
Here is a chart comparing the top insurance companies and the average annual minimum coverage rates.
You should also consider any additional coverage you would like.
Maintain a Good Driving Record
Accidents, speeding tickets, and other incidents can damage your driving record. Because this information is used to calculate your insurance premium, it can result in a higher premium.
Here's a look at how having a DUI, accident, or ticket on your record can affect your insurance rates.
Fortunately, improving your driving record can decrease your insurance premium because you’ll be seen as a safe driver rather than a careless one. Changes in your premium won’t happen overnight, but you’ll likely see your rates drop when it comes time to renew.
Enroll in a Safe Driving Program
Many insurance companies offer a safe driving program, also called usage-based insurance. Basically, drivers earn a discount for their safe driving habits. Using a plug-in device and/or mobile app, your insurance company can track your driving trips and gather data about your driving habits, including braking, acceleration, and speed.
Liberty Mutual and Progressive are two insurance companies offering a safe driving program for drivers interested in earning a discount for their good driving.
Take a Defensive Driving Course
Driving courses can keep drivers knowledgeable of the laws of the road and encourage them to maintain safe driving habits.
Of course, you’ll have to confirm with your insurance company if they offer a discount for drivers who take a defensive driving course, but if it does offer this discount, this is a quick and easy way to save some cash on your insurance premium.
Review Payment Options
Lowering your car insurance can be as easy as changing your payment method. Drivers often have a number of payment options available to them, and depending on their choice, they can save.
For example, if you pay your premium in one, two, or three payments rather than in six monthly installments, your premium will be less. American Family Insurance offers a Full Payment Discount to customers when their policy is paid for in full at the time of purchase.
Improve and Maintain Your Credit Score
Insurance companies in certain states run a driver’s credit to assess risk. The higher the credit score, the less you tend to pay, so improving your credit score can get you a lower premium.
You can start by getting a credit report and confirming your credit score. From there, do what you can to pay your bills on time, lower your debt, and watch your spending to keep your credit utilization down.
Update Your Annual Mileage
Not everyone drives thousands of miles every year. Between biking, public transportation, and carpooling, you have lots of ways to get to where you want to go.
Low mileage discounts are available for those who drive below a certain number of miles per year.
Review Your Current Policy
Your insurance coverage needs can change over the years. Graduation, marriage, or another major life event can require updating or changing your coverage.
For example, you might have paid off your auto loan, meaning you’ll no longer require full coverage or GAP insurance.
Depending on the vehicle’s age and value, you may feel comfortable only carrying liability, so dropping collision and comprehensive coverage is a change that leads to savings. In fact, with any small or big change potentially impacting your premium, taking a look at your policy can help you ensure it reflects your current circumstances.
Compare Insurance Rates for the Vehicle You Plan to Purchase
The type of vehicle you drive will affect your insurance premium. If you plan to buy a new car, shop around for rates to know how much insurance will cost for that vehicle.
If you haven’t quite narrowed down what type of vehicle you want to purchase, you can get quotes for different vehicles to help you decide which would be the ideal fit for your budget.
Bundle Your Policies
A lot of drivers find a need for additional insurance policies. For example, if you own your home or rent, you can save on insurance by bundling your auto insurance with homeowners or renters insurance.
Plus, having two insurance policies with the same insurance company makes managing the payments, policies, and more easier.
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Frequently Asked Questions
How can I quickly lower my car insurance?
There are many ways to lower your car insurance, but if you want to see a more immediate decrease in premium, try switching insurance companies, adjusting vehicle coverage, or increasing deductibles.
Why is my car insurance so high?
Insurance companies review certain factors when calculating premiums. Ultimately, this information is used to determine the likelihood of you being in an accident. If you are seen as a risky driver, your insurance will be higher.
Is there car insurance I should avoid?
Everyone’s circumstances are different. And while there isn’t one specific type of car insurance you should avoid because all options can benefit drivers in certain situations, you want to avoid purchasing insurance you don’t need. For example, paying for GAP insurance when your vehicle is worth less than what you owe on your loan balance.
Does car insurance go down at 25?
Due to their inexperience, younger drivers tend to pay higher car insurance premiums. However, once they turn 25, their insurance will likely decrease because they will have several years of driving experience under their belt.
How do I lower my car insurance after an accident or speeding ticket?
Car accidents and speeding tickets can result in a premium increase. If either event occurs, adjusting coverage, switching insurance companies or taking a safe or defensive driving course are a few ways to lower your premium. You can also inquire about any other available discounts you may qualify for.
Keep in mind that accident forgiveness will protect drivers from a premium increase, so you’ll want to confirm with your insurance company if this benefit is available and if it has been added to your policy.
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