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Wondering how to lower your car insurance? You’re definitely not alone. Luckily, most drivers can usually secure a cheaper rate for the same insurance, especially if they’ve gotten older, it’s been a long time since they’ve gotten a new quote or their driving record has improved. If you think that you might be overpaying for your car insurance, consider using some of our tips to search for a more affordable rate – you might be surprised at how much you can save with just a few hours of searching.
How to Lower Your Car Insurance 101:
- Shop around to see comparable rates
- Ask for a higher deductible to lower your monthly premium
- Bundle your car insurance with other policies from the same provider
- Improve your credit score
- Ask about discounts each year to make sure you’re getting the most for your money
- Install an anti-theft device
- Take insurance costs into account when choosing which car to purchase
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Steps to Lowering Your Car Insurance Rate
Follow these steps to lower your car insurance rate.
Step 1: Shop Around for a Lower Rate
A lot of things in your life have probably changed since you originally signed up for your car insurance package. You may have gotten married, switched the type of car that you drive, or moved into a new zip code. Every insurance company uses its own unique formula to calculate how much you’ll pay.
If it’s been a few years since you went shopping for insurance, secure at least three quotes from competing insurance companies and see how they compare to your current rate.
If you’re satisfied with your current insurance provider’s services but you’ve still found a quote for a lower rate, don’t be afraid to negotiate. Insurance providers know that it’s much riskier to extend coverage to a new driver than it is to keep on an old one, and the best car insurance companies often offer to match or beat the rates of their competitors if they catch wind that you’re thinking about making a switch.
Step 2: Ask for a Higher Deductible
The deductible is the amount that you are expected to pay for any damage to your vehicle from an at-fault accident before your insurance “kicks in” to foot the bill. As a general rule, the more you pay in a monthly premium, the lower your deductible will be in the event that you’re involved in an accident.
Requesting a higher deductible from your insurance provider may afford you a lower rate, as insurance companies know that you’ll be covering a higher percentage of your bill if your vehicle is damaged. It is very important to figure out your break-even point if you have a higher deductible versus the savings.
Step 3: Bundle Your Home/Renters and Auto Insurance with a Multi-Policy Discount
Some insurance companies offer you a discount if you bundle your insurance together and purchase them both from the same provider. Additionally, your insurance company may also offer you a discount if you insure multiple cars or drivers on a single policy.
Contact your insurance provider and tell them that you are considering adding your home or renter’s insurance to your current car insurance package and ask about any discounts you can secure by bundling.
Step 4: Improve Your Credit Score
Though most drivers aren’t fond of the practice, car insurance companies heavily factor your credit score into the calculation of your premium. This is because research shows that drivers who maintain high credit scores tend to be more responsible when it comes to vehicle maintenance and driving habits, lowering the possibility that the driver will be involved in an accident.
To protect your credit score, keep a low balance on your credit cards and remember to make your payments a few days before they are due. If your credit score has taken a hit because you have trouble remembering your payment due dates, consider authorizing minimum payments through your credit provider’s autopay system if it is offered.
For more tips on how you can improve your credit score this year, check out Benzinga’s guide. If you are able to improve your score from a classification of “poor” (under 600) to “good” (700 or above), you’re most likely to see big savings.
Step 5: Ask About Any Discounts You Might Be Missing
Each car insurance provider has its own set of discounts and you might qualify for more than you think.
From low-mileage discounts that offer savings to drivers with a short commute to teen discounts for good grades and car insurance savings, call your insurance provider and ask about new discounts that have been recently added or ask to take a look at your account and locate opportunities to save.
Step 6: Install an Anti-Theft Device
Many insurance companies offer discounts to drivers who purchase vehicles with comprehensive anti-theft systems or who have aftermarket anti-theft systems installed. If you have comprehensive auto insurance in addition to standard collision insurance, you may be able to save even more. Contact your insurance provider and ask about premium discounts for anti-theft device installation.
Step 7: Consider Insurance Costs Before You Buy Your Next Car
The price of your car, the likelihood of theft, and the car’s safety ratings all heavily factor into the cost of insurance. If you’re currently shopping for a new car, view crash-test data from the Insurance Institute for Highway Safety before making the decision to buy.
How to Tell if You’re Paying Too Much for Your Car Insurance
Do you know if you’re overpaying? If either of the following apply to you, you may want to take closer look at your premium.
1. You’ve never switched your car insurance provider or gotten an outside quote
Do you know that the average driver has not switched his or her car insurance provider for over 12 years? If you think that your car insurance company is going to hand you a discount for loyalty, you’d be mistaken.
Car insurance providers rarely approach you with a discount, even if your driving situation has significantly improved over the years. Don’t be afraid to shop around for quotes from competitors using your most up-to-date information.
2. You’re paying much more than the average driver
Statistics show that the average car insurance cost is around $1,512 a year, or a monthly premium of $126.
Though the exact rate that you’ll pay will depend on a number of factors (including what state and city you live in, your age, and even your credit history) if you find yourself paying much more than the national average, it’s time to start searching for a new rate.
How to Compare Car Insurance Companies
Regularly request quotes from competing car insurance providers, even if you would like to stay with your current insurance package. Finding a number of quotes will ensure that you’re not being overcharged for your insurance and can also offer leverage for you to negotiate a lower rate with your insurance provider.
To secure a quote, research your area’s local providers and either give them a call or visit them online and request a quote; many car insurance companies have added online tools to their website that use algorithms to provide you with an estimated premium in as little as a few minutes. The more quotes you find, the better your chances are at securing the best possible rate, so make sure to consult with at least three insurance companies before you sign on.
Where to Get a Car Insurance Quote
The following providers are some of our favorite companies for car insurance. Compare quotes from multiple providers to find the right option.
Allstate is one of the largest insurance companies in the country, and it’s been around for 90 years. That means it’s secure and able to pay your car insurance claims. That doesn’t mean it’s stodgy, though. It has introduced innovations like Drivewise, which allows you to save on your insurance based on your driving habits, and Milewise, which is pay-per-mile insurance.
You can purchase insurance online or through an Allstate agent. Allstate offers several options for discounts that can bring down your policy costs significantly. It also offers several types of insurance so you can have all or most of your policies with 1 insurer.
Overall, Allstate is a good choice and worth comparing with other insurers to see if it’s right for you. It’s available in all 50 states and has an A+ rating from AM Best.
- Personalized service
- Pay-per-mile insurance from an established company
- Buying multiple types of insurance
- Extensive agent network
- Easy sign-up process
- Many customer service options
- Drivewise and Milewise aren’t available in all states
The AARP Auto Insurance Program from The Hartford is designed exclusively for AARP members who are at least 50 years old. Some of the unique features of the program can help you save money on your policy over time, especially if you have and maintain a clean driving record.
Other stand-out features include new car replacement (rather than the depreciated value), reimbursements for expenses incurred if you get injured in an accident and lifetime repairs guarantees.
The AARP Auto Insurance from The Hartford is rated #1 by J.D. Power and Associates for customer satisfaction in handling auto insurance claims.
- Safe drivers who are looking to save money
- AARP members at least 50 years old
- Offers unique coverages and benefits that can be added to a standard auto insurance policy
- Allows drivers to save for safe driving
- Rated #1 by J.D. Power for customer satisfaction in auto claims handling
- Only available for AARP members
- Must be at least 50 years old to qualify
Progressive auto insurance is among the first of the larger insurers to actively embrace usage-based insurance via electronic monitoring of driving habits. Often a refuge for younger drivers and drivers who have been refused insurance elsewhere, progressive markets and supports its insurance products through its website and a network of independent agents.
- Young and less-experienced drivers
- Drivers with consistently good driving habits
- Rates for good drivers
- RV drivers
- More welcoming to less-experienced drivers
- Great website and mobile app functionality
- Driving based discounts can be generous
- Relatively smaller agent network may leave some without a local agent
- Rates can increase at renewal based on driving data from Progressive’s Snapshot.
The American Automobile Association (AAA) is a federation of auto clubs, and it offers a wide range of insurance options, including car insurance. It is the most trusted and familiar name in auto-related services. The company has come a long way since its founding, but the mission remains the same.
Safe and efficient transportation is exactly what AAA commits to per the company’s core statement. AAA is probably best known for its roadside assistance, but the company offers a variety of insurance coverage and memberships as well. AAA strives to make your life easier with its insurance coverage for you and your family. Your safety and security is AAA’s priority.
- AAA Members
- Roadside Assistance
- Extra insurance perks
- Anyone looking for unique insurance carriers
- Serves all states
- Mobile app
- Emergency roadside assistance
- Have to be an AAA member
- Policies not available in every area
What Should I Ask My Insurance Provider?
- Do you offer discounts for insurance bundles or packages?
- What types of discounts am I eligible for?
- What is my risk assessment? How did you arrive at this number? What factors do you use to determine a quote?
- Do you have a physical office where I can meet with you to discuss my policy options?
- How much would this premium increase if I were to move? What if I were to add another driver to my policy?
- If my car insurance provider charges a fee for stopping coverage before the terms of my policy, will your company help to cover this cost if I switch to you?
Common Car Insurance Discounts
While these vary by provider and your unique driver profile, here are some common discounts you may be eligible for:
- Student discounts
- Military discounts
- Taking drivers education and defensive driving courses
- Bundling your auto policy with other types of coverage, like your home or pet insurance, from the same provider
- Maintaining a good credit rating
- Selecting a higher deductible
- Lower than average annual milage
- Keeping the same provider for many years
- Insuring multiple cars under 1 policy or provider
- Safe driver discount: going 3 years without an accident or moving violation
- Good grades discount
Getting the Best Car Insurance Rate
Whether you’re getting insured for the first time or you’re considering changing insurance providers, you should leave yourself plenty of room to research your options before you need to make a choice. Remember to thoroughly read every policy that you’re seriously considering and to never cancel coverage before you have secured a new car insurance policy.
There’s nothing worse than signing up for a new, less expensive policy only to find that your insurance doesn’t cover all of the hazards you need.
How can I get a lower rate after an accident?
If your car insurance premium goes up after getting into an accident, it may be time to compare quotes from other providers to see if you’re able to get a lower price. You may also want to call your insurance agency to negotiate. Otherwise, it’s a waiting game: the longer you go without an insurance claim, and the better your driving record is, the lower your car insurance premium will be. Usually, a 3 year period with no accidents or moving violations is enough to lower your premium.
What car insurance discounts are there?
Common discounts include bundling coverage, taking driving education courses, student discounts, low milage drivers and keeping the same provider for a long time.
Should I insure an older car?
As long as you have the minimum auto coverage required by law in your state, you may want to consider reducing your insurance coverage on older cars. Basically, if your car isn’t worth at least 10x what your premium is, you should consider lowering your coverage.
Does owning your car lower your car insurance?
It can. If you lease or finance your car, your lender will likely require you to carry full coverage insurance before driving it off the lot, which is typically more expensive than minimum liability coverage.