The average cost of car insurance is $100 – $200 per month. That’s a minimum of $1,200 per year, not including other factors like state, company, age, driving history, and even gender.
But luckily, your auto insurance premium isn’t permanent. You can (and should) lower that yearly number.
We’ve come up with our top 16 tips and tricks to save you money on your premium while still getting full auto coverage.
If you have multiple cars or multiple forms of insurance, bundle it all together. You can bundle with homeowners’ or renters’ policies, boat insurance, motorcycle insurance, and even umbrella policies. Most insurance companies will offer bundling or multi-line discounts if you purchase all or most of your policies with them.
Plus, bundling makes your life simpler overall. You have less to keep track of and organize because you deal with one company, one claims system, and one monthly or yearly payment. Learn more about the benefits of bundling here.
2. Drive safely.
Customers with a record of accidents and moving violations (including speeding tickets) generally have a higher premium because they are considered a higher driving risk. In fact, Insurance.com found that even a single ticket could increase your auto premium by 22%.
Driving safely and carefully can help keep your record clean and your premiums low. If you already have moving violations, don’t worry. Most states will drop minor driving offenses after three years, so these won’t impact future auto rates.
3. Take a defensive driving course.
Taking a defensive driving course not only helps you drive safely, but it may actually help lower your rates. Many insurance companies will offer a discount to those drivers who take driving safety courses, because it demonstrates a high level of responsibility and low risk of accidents. Plus, a defensive driving course helps you protect yourself and your car if others on the road are driving erratically or irresponsibly.
4. Install car safety features.
More on safe-driving discounts. In the same way that a defensive course minimizes your risk, so do car safety features. Often cars will have a list of safety equipment you need installed in order to get an additional discount. These features can include airbags, anti-lock brakes, electronic safety controls, and automatic seatbelts. Sometimes even showing the receipt of a kids’ safety car seat can lower your premium.
5. Choose a low-risk car.
The type of car you drive can determine your policy rates. Expensive sport cars usually have exorbitant premiums because of the high risk of injury and the increased need for collision coverage. In addition, bigger SUVs tend to cost more to insure than smaller (safe) cars. New cars also have higher premiums than old or used cars.
P.S. Some companies offer a discount for driving a hybrid or alternative fuel vehicle!
6. Drive less.
The less time you spend on the road, the less of a risk you are to insurance companies; less risk means lower premiums. Many insurance companies offer “low-mileage discounts,” which save you money if you don’t drive often.
To minimize your time spent on the road, try to car-pool, take public transportation, or bike when possible. If you’re changing jobs or houses, consider your commute. The shorter the commute, the lower the premium (plus, more time to sleep in).
7. Guard against theft.
Like #4 “install car safety features,” you should install theft safety features, which can be used for an auto insurance theft-deterrent discount. Anti-theft devices like alarms and LoJacks can protect your car from theft, which minimizes your risk (and your insurance cost). Also, keeping your car in the garage, rather than in the driveway or street, can help prevent theft and lower your premiums.
8. Shop around.
Don’t be afraid to shop around and get quotes from different companies. In fact, that’s why InsuraMatch was founded! We know that comparing quotes from different companies gets you the best deals and discounts. Auto insurance companies have high competition, which means you can usually find a lot of options at competitive prices.
9. Improve your credit score.
Insurance companies take your credit score into account when assigning you a premium cost in most states. The better your score, the lower your rates. This is generally only applied at the beginning of a policy, though. So raise your credit score for the next time you go insurance shopping!
10. Avoid lapses in coverage.
If you have even a day without auto coverage, your premiums will likely go up. When you are switching insurance policies or providers, don’t cancel your former insurance until the new one has kicked in. In addition, always pay your bills on time. Even one missed payment could skyrocket future premiums.
11. Use auto-pay and fewer installments.
Speaking of payment: pay more, less often. Most companies charge a fee each time you pay a bill. This is tacked on to your standing premium. If you pay every 6 or 12 months as opposed to monthly, you’ll have to pay less billing and service fees.
Furthermore, most insurance companies will give you a minor discount if you sign up for auto-pay (EFT), where your bill payment is automatically and electronically taken out of your bank account.
12. Look into group discounts.
There are often discounts for specific groups and businesses. For example, military and teachers often get discounted rates. Your company may also work directly with a specific insurance company and provide discounts through that partnership. When shopping around, be sure to see if your professional or personal network offers any discounts.
In addition, there are other types of discounts that may apply to you. For example, students and senior citizens who have clean driving records can often get a lowered rate.
13. Ask about teen driver discounts.
Teen drivers are the most expensive factors of auto insurance premiums, because teens are at the highest risk of accidents. However, some insurance companies will offer good-student discounts, where your monthly rate will be slightly lowered if your teen maintains at least a B average.
If you want to further offset the traditional teen-driver increase, have your teen take a defensive safety course (#3). This can also help your kids be safer and more cautious on the road.
14. Move to a new state.
We’re not suggesting you pack your bags and move just for a discount. However, if you’re considering relocation for whatever reason, keep in mind that different states have different auto insurance rates and regulations.
15. Increase your deductible.
Generally, your premiums and deductibles are inversely proportionally. Your deductible is what you have to pay out of pocket before your coverage kicks in when there is a claim. The more you pay upfront in a premium, the less you have to pay out of pocket. Reversely, the less you pay in a premium, the higher your deductible.
Basically, increasing your deductible increases the amount you would have to pay out of pocket if something were to happen… but you’ll pay less in your premium installments.
Don’t increase your deductible if you have a history of accidents. Generally, unsafe driving trumps other discounts; so even if your deductible increases, your premium will stay the same if you don’t have a good driving record. Additionally, if you tend to attract disaster, you don’t want to be stuck paying more out of pocket in case of a significant claim.
16. Reduce coverage.
Although it’s not ideal, reducing your coverage will lower your premiums. For example, if you drive a car that’s old and paid off, you may be thinking about buying a new one soon. In that case, you can probably cut down on collision insurance, which pays for damage to the vehicle. If your old car is damaged, it’s likely not worth it to repair if you’ll just buy a new one soon anyway.
But don’t just start cutting out all of your policies. Remember that insurance is there to expect the unexpected. Think logically and work with an agent. Be sure to talk to both an insurance agent and financial risk advisor before you start reducing your auto coverage.
The Bottom Line
Not all insurance companies will offer the above discounts, but it never hurts to ask. The safer you are and the better you treat your car, the lower your premiums will be.
But the best way to find the greatest deal is by shopping around and comparing quotes from different carriers. You’re more likely to find the perfect coverage at the perfect price if you compare 8 quotes as opposed to 2.
In just ten minutes, InsuraMatch can give you those 8 carrier quotes. Get matching now!