8 Car Insurance Hacks To Help Any Driver Lower Their Rate

Owning a car costs much more than just the upfront cost of the vehicle. Between maintenance, gas, and general wear and tear, car owners spend up to $11,931 a year on their cars, depending on how much they drive. A large car like an SUV or a minivan costs more than a small sedan, but AAA still estimates even the most fuel efficient car costs owners up to $7,606 per year. With insurance starting at $1,000 - $2,000 per year, many drivers wonder how to lower expenses.

There are a few ways to reduce your car insurance that are not just “drive carefully” and “avoid an accident.” Here are eight hacks to lowering your car insurance rates.

Owning a car is better than leasing or getting a loan.

The reason for this tip is simple: the owner of the car is the person who decides how much coverage he or she wants to purchase. If the car is leased, or purchased through a loan, then the owner is the company or the bank, and not the driver. These third parties could stand to lose if there were an accident, so they are generally very conservative when it comes to the type of car insurance they require the driver to have.

Often, companies lease new vehicles, which have higher insurance quotes because they are worth more than a used car. For that reason, an auto company or a bank will generally require drivers to purchase comprehensive insurance, which is far more than most people need, because they do not want to bear the risk of paying for repairs if the driver crashes. Although buying a car outright is a considerable expense for most people, it will help save on insurance costs in the long run.

Comprehensive insurance is an unnecessary expense.

There are two basic kinds of insurance: comprehensive and liability-only. For most people, especially safe, experienced drivers, liability insurance covers just enough to keep everyone on the road safe. It covers any damage caused to other vehicles, people, or property. Comprehensive insurance covers everything else, including damage to you and your vehicle.

However, this extra coverage comes at a huge premium and is unnecessary for most people. Smart drivers can save a lot of cash by choosing a no-frills insurance plan that does not charge exorbitant fees to insure for extremely rare events. Add up how much you’re spending on your comprehensive coverage each year and calculate your car’s replacement cost to see if you really need this coverage.

Drive less.

The less time a driver spends on the road, the less likely they are to get in an accident. Driving less also saves on gas and maintenance, so minimizing car use can reduce costs all around. On average, for every 5000 yearly miles driven, an insurance plan goes up by $1,000-$2,000.

For example, for a medium-sized sedan, the insurance cost jumps from an average of $7,587 at 10,000 yearly miles to $8,716 for 15,000 yearly miles. Driving less automatically reduces the risk of an accident, so it is a relatively straightforward way to lower insurance costs.

Of course, this is not always realistic, but drivers are encouraged to carpool, walk more, or bike in order to save significantly on insurance.

Shop around every year for better rates.

Car insurance companies know that it is a hassle for most people to look for another insurance plan at the end of each year. Right now, only 27% of Americans comparison shop for car insurance every year. Therefore, insurance companies let their prices creep up slowly over time with the knowledge that many drivers are willing to pay for the convenience of not looking elsewhere.

However, it is relatively simple to fight this tendency by setting a time each year to ask for quotes from two or three competitors to compare options. For people that have undergone a big life change during the year - such as getting married, turning 25, or buying a home - it is especially important to check if the current policy is the best one. These changes often result in dramatic discounts, so make sure to ask for lower rates if one of these categories applies.

Pay car insurance premiums in full, rather than in installments.

Car insurance companies will often charge a premium of up to $10 per payment to people who pay monthly rather than all at once. The farthest one can pay ahead is typically six to eight months, but it is well worth it. Many companies offer a 10-15% discount to people who pay their policy in full, since it shows financial responsibility, which may translate to safe driving. In the same way that one’s credit score can lower insurance costs, pre-paying an insurance plan proves financial stability, which often predicts the way people drive. For the statisticians at insurance companies, this responsibility is often a sign that the driver is a low risk to their company, so they can offer a lower rate.

Park in a garage every day and request a discount for it.

Parking a car in the garage protects it from general wear and tear and also prevents casual theft. Some insurance companies offer a discount for drivers who always park in a garage. If the car is safe and sound in a garage, many insurers will consider it to be at lower risk for damage, and therefore cheaper to insure.

However, make sure to ask for this discount at the time of requesting a quote. There are many discounts that drivers can request and insurance companies do not always make that clear. As an educated driver, explain to the company that the car is safely parked in a garage and request a discount for the precaution.

Use technology to share data with car insurance companies.  

New technologies have allowed drivers to provide constant insights into their driving habits to insurance companies, which creates a more open dialogue about insurance rates. Nonetheless, only 35% of Americans share data with their car insurance company. With small plug-ins that monitor driving history, drivers and insurers alike can review how car owners act on the road to help improve driving safety and lower rates for the future.

Previously, insurance companies could only base their statistical modeling on past driving and educated guessing. With the advent of these new technologies, however, the models will become significantly more complex and accurate, allowing insurance companies to monitor drivers’ behavior constantly and change their premiums accordingly.

There are also alternative forms of insurance that offer a pay-as-you-go model. Metromile, along with many other large insurance carriers, allows customers to pay-per-mile, which is a great option for drivers who are rarely on the road.

Insurance does not have to be as expensive as a new car. These tricks can help any driver lower insurance costs, whether they are buying their first plan or renewing an old one.

This piece is written by María Paz Gillet Martín, the CEO and Co-Founder of Jooycar.