9 Ways You Can Make Your Car Insurance Cheaper

Car insurance rates can vary based on many different things, such as the car you drive, your annual mileage, and how long you have been insured. If you’re not happy with how much you’re paying for auto insurance, there are some things you can try to bring the costs down.

From adjusting your deductibles and shopping around for competitive rates to taking advantage of lesser-known discounts and improving your driving record, there are plenty of ways to lower your premiums.

This article will walk you through practical, actionable steps that can help you save money on your car insurance while maintaining the protection you need.

Ways to reduce your auto insurance premiums

Across the U.S., the average annual premium for auto insurance is $2,543, according to data from Consumer Reports. Louisiana, Florida, and New York all have average car insurance premiums of over $3,500.^[1]

There are a number of things you can do to try to reduce your car insurance rates, from gathering different quotes to adjusting your coverage. Read through our list of tips to learn more about how you could make savings.

1. Shop around for different insurance quotes

One of the most effective ways to reduce your car insurance costs is to regularly compare quotes from multiple insurance companies. Insurance providers use different risk assessment models and pricing strategies, which means premiums can vary dramatically between companies for the same driver and vehicle. Consumer Reports research shows that drivers who switched insurers saved money on their premiums. Some consumers may remain with the same insurance company for years without realizing they could find better rates elsewhere.^[1]

The key to successful comparison shopping is obtaining quotes for identical coverage levels from several different insurers. This ensures you're making accurate comparisons for what you need rather than simply choosing the lowest price with inadequate coverage. Industry experts recommend getting quotes from at least three companies, though checking with additional providers can uncover even better opportunities for savings. Data from Value Penguin shows that consumers could save over $1,300 per year by shopping around for auto insurance quotes.^[2]

2. Choose your car wisely

The vehicle you choose to drive plays a major role in determining your car insurance premiums. Insurance companies evaluate several key factors when calculating rates for your specific make and model:

• Safety record and features - Cars with advanced safety technologies like automatic emergency braking often cost less to insure
• Repair costs - Vehicles with expensive or hard-to-find parts result in higher premiums
• Theft rates - Models that are frequently stolen increase comprehensive coverage costs
• Vehicle value - Higher-priced cars cost more to replace, leading to increased premiums
• Vehicle type - Sports cars and luxury vehicles typically have higher rates than family-oriented cars.
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When shopping for a vehicle, either to lease, buy outright or through auto financing, research insurance costs for specific models before making your purchase decision, as ongoing insurance expenses can add substantially to your total cost of ownership and may influence which car fits best within your budget.

3. Check your credit score

Car insurance companies may check your credit and apply a credit-based insurance score when you apply for an insurance policy. This credit-based score can impact whether you’ll be accepted and how much you’ll pay for car insurance, but companies typically can’t refuse to insure you solely based on your credit.

Be sure to check your credit report to find any areas where you may be able to build your credit, which could potentially save you some money on car insurance in the long run. You can get your free weekly credit report from Experian, Equifax, and TransUnion via annualcreditreport.com.

Car insurance payments don’t directly impact your credit score, but paying for car insurance using a credit card can help you build credit, provided you pay off your credit card on time after every billing period. Missing credit card payments could negatively impact your credit.^[4]

4. Adjust your coverage and deductibles

Reviewing and adjusting your coverage can lead to meaningful savings on your insurance premiums. Increasing your deductible is one of the most straightforward ways to reduce your monthly or annual costs. According to the Insurance Information Institute, raising your deductible can reduce collision and comprehensive coverage costs considerably. However, it's crucial to choose a deductible amount you can afford to pay out of pocket in the event of a claim.^[5]

For older vehicles with lower values, consider whether full coverage is still necessary. If your car is worth less than ten times the premium, it may not be cost-effective to purchase collision and/or comprehensive coverage. This decision requires careful consideration of your financial situation and ability to replace the vehicle if needed.

Removing unnecessary add-ons can also reduce costs. Review your policy for optional coverages like rental car reimbursement or roadside assistance that you might not need, especially if you already have these services through other sources like credit cards or automobile clubs.

5. Maintain a clean driving record

Safe driving habits directly impact your insurance costs. Avoid speeding tickets, accidents, and other violations that can cause your rates to increase. Depending on your state, you can have a clean driving record if previous violations have fallen off your record. In states that use a points-based system for recording traffic violations, these can stay on your record for three to five years, depending on the state and the severity of the offense. Many insurers offer good driver discounts for those who maintain clean records over several years.^[6]

6. Take advantage of discounts

Ask your insurance company about available discounts you might qualify for. Common options include defensive driving course discounts, low mileage discounts, and multi-vehicle discounts if you insure more than one car with the same company.

Some insurance companies may also offer discounts to drivers who have not had any accidents or violations for a certain number of years.^[5]

7. Consider a driver monitoring program

If you're a safe driver, consider enrolling in a program that monitors your driving habits through a smartphone app or device connected to your car’s diagnostic port. These programs can offer discounts based on factors like safe speeds, gentle braking, and low annual mileage.

If this option is available in your state, be sure to check what data is collected and whether any negative driving habits could actually increase your insurance rates. This can help you work out if this kind of program would be suitable for you.^[1]

8. Combine your auto insurance with your home insurance

Bundling your car insurance with your homeowners or renters' insurance through the same company is a straightforward way to reduce your overall insurance costs. Insurance companies commonly offer these multi-policy discounts as an incentive to keep more of your business.

Having all your insurance coverage with one company means dealing with a single agent, one billing system, and unified customer service for claims and policy questions. However, it’s still important to shop around; for some people, getting insurance separately from different companies could work out cheaper.^[1]

9. Review your coverage annually

As your car ages and depreciates, you may not need the same level of coverage. Consider dropping comprehensive and collision coverage on older vehicles with low values where the cost of coverage exceeds the potential payout. Also, review your policy when life changes occur, such as marriage or moving to a new location.

Other factors that can impact your car insurance rates

Below are some other things to consider when it comes to the cost of your car insurance:

• Marriage or divorce - Adding a person with a history of claims or driving violations to your policy can increase your rates, but removing someone with a negative driving history could make your car insurance premiums cheaper.
• Moving locations - Where you live can have a significant impact on your car insurance rates, for example, insurance is often more expensive in busy cities than less populated areas.
• Getting a new job - If you get a new job and have a longer commute, your insurance rates may rise due to the increased mileage, but if you now work from home and drive much less, you could make savings.
• Adding a young driver - Drivers aged 16-17 are the most likely to be involved in a car accident, and adding a driver of this age to your policy could significantly increase your premiums.
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Bottom line

There are plenty of things you can do to reduce your car insurance premiums, from simple things like shopping around and looking for discounts, to bigger changes like driver monitoring programs and switching your car. Small changes can help you make considerable savings on your auto insurance, so why not try some of these tips and see how much you could save?

Sources

1. Consumer Reports, “How to Save Big on Your Car Insurance” https://www.consumerreports.org/money/car-insurance/how-to-save-big-on-your-car-insurance-a5155263103/
2. Value Penguin, “Shopping Around for Car Insurance” https://www.valuepenguin.com/shopping-auto-insurance-study
3. Bankrate, “Average Cost of Car Insurance” https://www.bankrate.com/insurance/car/average-cost-of-car-insurance
4. Experian, “Can You Pay Car Insurance With a Credit Card” https://www.experian.com/blogs/ask-experian/can-you-pay-car-insurance-with-credit-card/
5. III, “Nine Ways to Lower Your Auto Insurance Costs” https://www.iii.org/article/nine-ways-to-lower-your-auto-insurance-costs
6. Progressive, “What is a Clean Driving Record?” https://www.progressive.com/answers/what-is-a-clean-driving-record/

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.

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