Car insurance is expensive. Depending on the type of insurance you buy, you could be paying thousands of dollars a year. With rising gas expenses, maintaining a car has become untenable for many. But you probably can’t just get rid of your car in a heartbeat. For most, owning a car is essential. Rather than ditching your car, you’re better off following our advice to lower your car insurance, some tips will even help lower your other car expenses.
20 Tips to Lower Your Car Insurance
There are a lot of tips out there that claim to help you lower your car insurance, but it’s difficult to sort through the good and the bad. Luckily, we did it for you. We placed the most effective tips at the top.
1. Improve your credit rating
This tip surprises a lot of people. Your credit score affects your car insurance premiums quite a bit. This is because insurance companies try to predict how likely it is that you will file a claim, and charge you based on that. People with a bad credit rating could pay up to 60% more in car insurance premiums than those with a good credit score.
To improve your credit rating, the standard advice applies. Pay your bills on time and pay off any outstanding debts, especially credit card debt.
2. Increase your deductibles
To help you pay lower premiums, you can easily increase your deductibles. As deductibles usually range from $250 to $1000, you won’t need to stretch your budget too much in the case of an incident. Besides, you probably shouldn’t file too many small claims because they might adversely affect your rating with car insurance companies in the future.
3. Use low mileage discounts
If you carpool or use public transit, this option is particularly helpful. When you fill out the requisite forms, your insurer will ask you about your transit and carpool usage. If your use your car substantially less than average, for instance, under 10,000 miles per year, you could stand to receive a discount.
4. Decrease your coverage on older cars
Comprehensive coverage and even collision coverage simply aren’t worth it for older vehicles. If you get into an accident, it might be cheaper to simply replace the car. A good rule of thumb is that if your car is worth less than 10 times the insurance premium, then paying the premium isn’t worth it.
5. Shop around for better rates
As always, it’s bad practice to simply take the first offer you get. Feel free to shop around for better car insurance rates and get quotes from multiple competitors. You could even tell your agent about the offers you’re considering. Perhaps this will motivate them to offer you a discount.
A word of caution, make sure that your insurer is still creditworthy enough to pay you in case you file a claim. Standard & Poor’s provides credit ratings of each insurance company.
6. Search for group insurance
To help you lower your car insurance costs, opt for group insurance. As costs are spread across multiple people, you might get a discount. Many organizations, from your employers and businesses to professional and alumni groups offer group insurance deals.
7. Get all your insurance from the same company
Compared to purchasing insurance plans from different companies, you can save quite a bit by purchasing multiple insurance plans from the same insurer. For instance, you can purchase your homeowner’s and car insurance from the same company. However, they will still be divided into separate plans.
8. Take a defensive driving course
Alongside defensive driving courses, there are a few courses you can take to help you increase your driving savvy, such as accident prevention classes. Insurers offer discounts of up to 15% if you take these classes. Not to mention, a defensive driving course might aid you in reducing the points on your license if you’ve recently been in an accident. Check for accredited defensive driving classes in your home state.
9. Pay attention to the road
Over time, being a consistently safe driver will net you discounts between 10 and 20% on your car insurance. By contrast, getting involved in accidents will increase the points on your license, thereby increasing your insurance premiums.
10. Take advantage of multi-car discounts
To save money, you’re better off insuring several drivers and vehicles with the same company. The only caveat? Each of these drivers must live at the same residence and be related to each other by blood or by marriage. The only way to avoid this condition is if you jointly own a vehicle with a friend or someone else you trust.
11. Downsize your vehicle
Naturally, you won’t automatically downsize your vehicle just because you heard you’ll get lower insurance premiums. However, it might factor into your purchasing decision since smaller cars are cheaper to insure. Note that electric vehicles and hybrids can also come with discounts.
12. Location matters
Once again, it makes little sense to move to a new state just for slightly lower car insurance. However, lower state or city-specific insurance premiums could affect your insurance premiums. If you’re considering a move, this could be a tipping point in favor of another city.
13. Ask your agent
Sometimes, you are eligible for exclusive discounts based on some personal trait you have, like being an army veteran. It can’t hurt to ask your insurance agent about other discounts the company offers.
14. Equip your car with an anti-theft device
Many recommend buying an anti-theft device to track your car movements. As a result, you could receive up to 25% in discounts for safe driving as they track your movements with a GPS. On the other hand, the device itself is expensive and many are uncomfortable with the invasion of privacy associated with the device.
15. Avoid lapses in coverage
Just like employers don’t appreciate gaps in your resumé, insurance agents don’t take kindly to gaps in your coverage. Even a brief lapse could disqualify you from receiving discounts. Don’t quit your insurance plan until your new coverage ensues. As a driver, taking such a risk reflects poorly on you and your safety habits.
16. Don’t pay your fees in installments
If your premiums are already small, you shouldn’t pay fees in installments. Each time you do this, insurance companies charge an administration fee.
17. Be a good student
If you have a child on board your insurance plan, they can receive a discount if their grades are above a certain average. Better yet, these discounts persist until the student turns 25. The student in question could potentially receive up to a 40% discount.
18. Switch to pay-as-you-go insurance
Another option that requires you to install a tracking device, pay-as-you-go insurance charges you based on each mile you drive. If you don’t use your car frequently, you could justify paying to equip it with this device.
19. Compare insurance costs before you buy a vehicle
Of course, you’re not constantly considering buying a new vehicle. If you’re making the purchase decision, you could find that two similar cars offer different insurance rates. However, there is usually little difference unless the cars also differ greatly in size and gas consumption.
20. Be a long-time customer
This option takes the longest to fulfill. Some companies will give you decent loyalty discounts, but this isn’t something you can change right away.
Final Thoughts
At the end of the day, your credit rating probably has the biggest impact on lowering your car insurance. Buying a different vehicle probably has negligible effects and doesn’t make sense for most people. Your best bet is to pay your bills on time and take measures to drive safely on the road.