How to Save Money on Car Insurance
Take Control of Your Auto Premiums
Having adequate car insurance is essential, but it can be a significant expense. The good news is that premiums can vary by hundreds of dollars based on several factors. By reviewing your coverage regularly and following these practical tips, you can reduce your auto insurance costs while maintaining the protection you need.
Compare Insurance Rates
Insurance prices vary between providers, so shopping around can lead to big savings.
- Obtain at least three quotes from different types of insurers, including those with their own agents, independent agents, and direct-to-consumer companies.
- Seek recommendations from friends and family and research companies online before making a decision.
- Understand policy details and ask informed questions to ensure the insurer meets your needs.
- Remember, the cheapest policy isn’t always the best—consider service quality and company reputation by checking consumer complaint records through your state insurance department.
Consider Insurance Costs Before Buying a Car
Insurance premiums depend on factors like a vehicle’s price, repair costs, safety features, and theft risk.
- Look for vehicles that qualify for discounts due to safety ratings and anti-theft features.
- Use the Insurance Institute for Highway Safety’s (IIHS) Top Safety Pick ratings tool to compare models before purchasing.
Increase Your Deductible
Opting for a higher deductible can lower your premium.
- Ensure you have enough savings to cover the deductible in case of an accident before making this change.
Reduce Coverage on Older Vehicles
If your car is worth less than 10 times your premium, comprehensive and collision coverage may not be cost-effective.
- Check your car’s value using resources like Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar to determine if reducing coverage makes sense.
Bundle Insurance Policies
Many insurers offer discounts when you purchase multiple policies from them.
- Bundling auto and homeowners insurance or insuring multiple vehicles with the same provider can result in savings.
- Compare the bundled discount with separate policies to ensure you’re getting the best deal.
Maintain a Good Credit Score
A strong credit history can lead to lower insurance premiums.
- Many insurers use credit scores to determine rates, as responsible credit management is linked to fewer claims.
- Regularly review your credit report to ensure accuracy.
Take Advantage of Low Mileage Discounts
If you drive fewer miles than average, you may qualify for a discount.
- Carpooling or using public transportation can help you meet the criteria for reduced rates.
Explore Group Insurance Options
Some organizations offer insurance discounts through group plans.
- Check with your employer, professional associations, alumni networks, or other organizations to see if they provide discounted insurance options.
Look for Additional Discounts
Insurers offer various discounts based on safe driving habits and other factors.
- Discounts may apply to accident-free drivers, those who complete defensive driving courses, good students, and students away at college without a car.
- Ask your insurer about all available discounts to maximize your savings.
Bottom Line
While discounts can help lower your premiums, the most important factor is the overall cost of your policy. Even insurers with fewer discounts may offer lower prices overall. Take time to compare options and choose the best coverage at the best price.
Additional Resources
- Insurance Institute for Highway Safety (IIHS) Top Safety Pick ratings tool
- Kelley Blue Book
- National Association of Auto Dealers (NADA)
- TrueCar
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