10 Tips to Cut Car Insurance Costs

Car insurance can be a pain in the neck to understand, but failing to do so can cost you big bucks. Not all policies are the same, and small changes can add up to big savings.

Reviewing your auto insurance policy can uncover new ways to save. Here are some tips that can help you reduce car insurance premiums.

1. Increase your deductible

Increasing your car insurance deductible from $200 to $500 or $1,000 can cut your collision and comprehensive coverage premium costs, notes the Insurance Information Institute.

Afraid you won’t be able to meet that amount if you’re involved in a car accident? Create an emergency fund to cover the cost.

2. Choose the pay-as-you-drive option

Several insurance companies will give you a break on your premiums if you let them use technology to track your driving behavior. These companies generally monitor things such as:

  • How many miles you drive
  • How often you slam on the breaks
  • The time of day you drive

For example, sign up for Allstate’s Drivewise and you immediately get a 3 percent discount on your premium, plus up to 15 percent cash back after 50 trips — and every six months thereafter — if you drive safely.

Other insurers with similar programs include Progressive and State Farm.

3. Comparison shop

Prices change, so it’s important to compare what you’re paying now with rates at other companies.

The lowest price doesn’t always mean the best policy for you. You want a company that’s not only financially stable but also offers dependable and timely service.

In addition, each insurer sets rates based on its own in-house criteria. So, your profile may net you better rates at one insurer than another.

4. Ask about discounts

Insurance companies offer a variety of discounts to qualifying policyholders. For example:

  • Over-50 discount
  • Multivehicle discount
  • Teenagers with GPA of 3.0 or higher discount
  • Loyal customer discount
  • Antitheft devices discount
  • College student discount
  • Accident-free discount
  • Moving violation-free discount
  • Low annual mileage discount

Check with your insurance company to make sure you’re getting all of the discounts you qualify for. Some companies won’t offer price breaks unless you ask for them.

5. Carpool

How much you drive in a year is a factor in how much you pay for insurance. Ask your insurance company if you can save by reducing your mileage and by how much.

Carpooling can significantly reduce the mileage you put on your wheels, saving you money on premiums as well as reducing the wear and tear on your car.

6. Purchase only what you need

If you own an older vehicle, you may not need to carry comprehensive and collision coverage.

The Insurance Information Institute says:

As a rule of thumb, if your older car is worth less than 10 times the insurance premium, having collision and/or comprehensive coverage may not be cost effective. To find out whether this is true for you, check the value of your car.

The III says you can find out what your car is worth for free on websites such as Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar.

Keep in mind that if you drop these coverages and have an accident that’s your fault, you’ll be on the hook for the full value of your car. This is another instance where a healthy emergency fund is critical.

7. Bundle up

You might get a better rate on your car insurance if you also buy your homeowners and other types of insurance from the same company.

8. Notify your provider of any changes

Changes in your driving patterns can yield large savings. If your daily mileage decreases because of such factors as carpooling, relocation or a shorter commute — or you no longer drive to work because you now work at home or have retired — your rates will likely follow suit, because you will be less likely to be involved in a crash.

Also, removing drivers who no longer operate your vehicle from the policy will reduce your premiums.

9. Maintain good credit

Like it or not, many insurance companies equate bad credit with a higher likelihood of filing claims. That means a bad credit score can result in higher premiums. For more, check out:

10. Don’t pay monthly

Your car insurance company likely offers a discount for paying your bill all at once instead of in monthly installments. The savings can be substantial.

Do you have tips for saving money on car insurance? Share with us in comments or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

5 Home Improvements That Help You ‘Age in Place’
5 Home Improvements That Help You ‘Age in Place’

These safety-conscious home upgrades can help retirees stay in their home.

How to Prepare Your Finances for Retirement in 7 Steps
How to Prepare Your Finances for Retirement in 7 Steps

Here is how to get your finances in shape for your golden years, one step at a time.

The 3 Biggest Regrets of Retirees — and How to Avoid Them
The 3 Biggest Regrets of Retirees — and How to Avoid Them

Rescuing a retirement from regret starts with these steps well before it’s time to quit working.

7 Common Online Shopping Mistakes That Will Cost You
7 Common Online Shopping Mistakes That Will Cost You

How many of these costly online shopping missteps are you making without realizing it?

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

This Simple Mistake Might Weaken Your COVID-19 Vaccination
This Simple Mistake Might Weaken Your COVID-19 Vaccination

Avoid doing this before you get vaccinated.

10 Cars You Are Most Likely to Keep for 15 Years
10 Cars You Are Most Likely to Keep for 15 Years

The cars that owners hold onto the longest have one thing in common, a new study shows.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

11 Products Now in Short Supply Due to the Pandemic
11 Products Now in Short Supply Due to the Pandemic

Many goods we take for granted have become tough to find in 2021.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

9 Things You Should Never Leave in a Car
9 Things You Should Never Leave in a Car

Thinking of leaving these possessions in a car? Prepare for unexpected consequences.

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.