15 Tips and Ideas for Cutting Car Insurance Costs

Car insurance will save you financially when you're operating a vehicle. Look for options where you get more car insurance coverage. How to reduce costs on car insurance coverage? Read these 15 strategies to save money.

How Much Does Car Insurance Cost?

How much an individual motorist spends on car insurance varies depending on the state they live in, their chosen insurance provider, and the coverage they have selected. Nevertheless, it's good to know the average amounts worth of a motorist's insurance coverage.

The average person spent around $1,190 in car insurance premiums in 2018, based on statistics from the National Association for Insurance Commissioners (NAIC). Over a five-year period, the amount of insurance coverage rose 30 , while the number of cars insured rose 7 .

AAA has presented data on the cost of vehicle insurance for new vehicles in 2020, showing that this figure was $1,202. The figures are relatively close, so you may want to add an extra $100 to your annual budget if you plan on getting a new car.

How to Save on Car Insurance Costs

There are many ways of saving money on car insurance. When you know how your car insurance costs are calculated, you can set up some of these techniques to reduce their effect.

1. Take Advantage of Multi-Car Discounts

You may wind up paying more for insurance if you insure a single vehicle than if you insure multiple drivers or vehicles with the same insurance company. Insurance carriers will offer you a bulk rate because they want you to use their service. In some situations, they offer you a deal on the condition that you'll bring in more.

Contact your insurance agent to find out whether you qualify for a senior driver's discount. Generally speaking, multiple drivers must live at the same residence and be related by blood or by marriage. Two unrelated individuals may also qualify for a discount, but they usually must jointly own the car.

The coverage for your teenage driver might be more expensive, but if they maintain a high score or rank in one of the top 20% of their final class, you can get a discount. The discount typically lasts until the child turns 25.

Some companies that offer automobile insurance may also furnish a discount when you maintain additional policies with the company, such as homeowner's insurance. Allstate, as an example, offers 10% off on automobile insurance and 25% off on homeowner's insurance when you bundle them together.

2. Pay Attention on the Road

In other words, continue to be a safe driver. This goes without saying, but be a safe driver in today s age of increasing in-car distractions. The more aware you are, the less you could find yourself involved in traffic accidents or moving violations that increase your insurance costs. Listed below are discounts from 10 and 23 depending on your driving record.

Drivers will have more points assessed to them for moving violations, and the number of points assessed to them will be directly related to their insurance premiums.

3. Take a Defensive Driving Course

Some insurance providers will offer a discount to drivers who participate in an approved defensive driving program. Drivers may also reduce the points they have on their licenses by taking a defensive driving, accident prevention, or other course.

If you're planning to take a defensive driving course, make certain you consult your car insurance company regarding the discounted cost. After all, you want the cost you exerted as well as the course's cost to generate enough insurance savings. It is also crucial that the driver enrolls in an renowned course. GEICO allows you to discover what states regulate defensive driving courses on its website.

4. Shop Around for Better Car Insurance Rates

If your healthcare policy premiums are about to renew and those of your competition have increased substantially, check out other options. Likewise, every year or two it is advisable to shop around to obtain quotes from alternative companies, in case there is a lower rate available.

Going with the more affordable provider isn't always the wisest choice. The reason for this is that the provider's creditworthiness must also be considered. After all, what is the point of a policy if the business doesn't have the means to pay a claim?

To check a particular insurance company, look at a site rating the financial strength of insurance companies. The financial strength of your insurance company is vital, but what your contract covers is essential, so be sure to understand it. Insure.com uses data compiled by Standard & Poor's to determine the financial strength of insurance companies.

5. Use Mass Transit

When you sign up for insurance, the company will generally start with a questionnaire. Among the questions it asks may include the number of miles you drive the insured automobile per year.

If you use your car for nearly three hours to work every day, you'll generally pay higher insurance premiums than someone with a much shorter commute. If possible, try to use mass transit to minimize your mileage, as you'll have to greatly reduce the number of miles in order to qualify for a discount. Contact your insurance company to learn about the company's various mileage thresholds, so your efforts won't be wasted. 

Also, check with your company to see how many miles you've driven, as most can provide you with a better insurance quote.

6. Downsize Your Vehicle

Buying an SUV can seem exciting at first, but insuring a 5,000-pound, top-of-the-line vehicle may be more expensive than insuring a smaller (but safe), cheaper commuter vehicle. Some insurance companies may offer a discount if you purchase a hybrid or alternative fuel vehicle. Farmers, for example, provides up to a 5 percent discount.

You can feel good about protecting the environment and save money on your insurance costs at the same time. Figure out the rates to cover various vehicles you're interested in before making a final decision.

7. Increase Your Deductibles

By filing a claim with your insurance, you are generally given the option to select a deductible, which would be the amount you would have to pay before your insurance company compensated you in the event of an accident, theft, or other types of damage to the vehicle. Depending on the plan, deductibles typically range from $250 to $1,000. The lower the deductible, the higher the annual premium.

An increased deductible lowers your premiums. Ask your insurance provider what their premiums will be if you decide on a different deductible. You could even receive money back in your pocket, or the savings may not be substantial. In this circumstance, raising your deductible might decrease the size of your claim and eventually lower your premiums.

8. Improve Your Credit Rating

The records of driving accidents the driver has been involved in are a key factor when determining the cost of an auto insurance policy. After all, it makes sense that a person who has been involved in many car accidents would cost the insurance company so much money. However, people are often surprised to find that insurance companies may also consider credit ratings when establishing premiums.

9. Consider Location When Estimating Car Insurance Rates

It's possible you may determine you won't move to a different state mainly because of lower car insurance rates. While planning your big move, however, the change in your insurance rate is something you will need to think about when planning your budget.

10. Review Your Coverage

In some situations, dropping certain types of coverage may be a slippery slope. After all, while nobody can predict when or why an accident will occur, you can be certain that an older vehicle will drop collision and comprehensive insurance coverage if it's extremely costly to repair.

The reason is that in the event the car is damaged or totaled in an accident, the insurer will typically total the vehicle. If the value of the automobile is only $1,000 and the collision coverage costs $500 per year, it may not make sense to purchase the coverage.

11. Get Discounts for Installing Anti-Theft Devices

Individuals may be able to decrease their annual premiums by installing anti-theft devices. GEICO, for example, offers a 25-percent potential savings if you have one in your car.

Your insurance carrier should be able to tell you specifically what gadgets when installed can reduce premiums. Car alarms and LoJacks are examples of gadgets that you might want to inquire about.

If your primary motivation for installing an anti-theft device is keeping your insurance cost low, consider whether the cost of installing the device will yield enough of a savings to make it worth the trouble and expense.

12. Speak to Your Agent

Actually, there are other savings to be had apart from the ones described in the article. That's the reason why it often makes sense to ask if there are any other savings that the organization offers, like promotions for personnel serving a particular company or for military personnel. You don't know what type of discounts might be available for your circumstances.

13. Switch to Pay-as-You-Go Insurance

If you are a safe and low-mileage driver, the usage-based insurance program known as black box insurance may be available to you, such as Allstate s Drivewise, Progressive s Snapshot, or State Farm s Drive Safe & Save.

These programs allow your insurance company to track your driving via a telemetric device installed in your vehicle in exchange for possible discounts, depending on how much and when you drive, and how well you drive. If you drive fewer than 10,000 miles a year, you might qualify for insurance discounts if you can pursue this option.

14. Research Additional Discounts

Compare the discounts for insurers:

• Offers to let you pay the whole annual or semi-annual premium at once. 
• Agreements to receive e-bills and documentation. 
• Memberships in particular organizations or groups that offer discounts. 

Don't lose your will by looking over a long list of possible discounts. Compare both discounts and associated rates from multiple insurers.

15. Ditch Coverage You May Not Need 

You may decide not to acquire all the bells and whistles in a plan, such as roadside assistance and rental car coverage. Go through your insurance line by line and inquire about omitting what you do not require.