- Paying less for your monthly (or annual) car insurance premiums involves a variety of factors.
- Driving safe and frequent comparison shopping are the two biggest ways to lower your costs.
- Don’t be afraid to switch car insurance companies — they are all mostly the same, anyway.
Money-saving tactics are the subject of hundreds of Google searches these days. So it’s no surprise you might be looking at your car insurance premiums and wondering, “How can I save money here too?” After all, with so many companies advertising give-backs, there might be more than just extra dimes and nickels hiding in your policy.
Insurance agents typically ask a bunch of questions about you to find discounts and earn your business. However, there might be a few details they missed. To help boost your budget (and keep you saving beyond these trying times), we’ve put together a list of ways you can lower your car insurance premiums. Check out the helpful tips below. You might be surprised by some of them. Putting a few extra dollars back in your pocket is easier than you think.
A Quick Note About Car Insurance Premiums
Before we get down into the nitty-gritty, educate yourself on what affects your monthly premium. It could help you negotiate a better rate. It will definitely work in your favor when you compare rates from multiple companies — even if you decide to not switch providers.
There are quite a few factors that insurance companies look at. Some you can’t necessarily change, like your age, gender, where you live, and what coverage is required in your state. Sure, you could move to another state with lower requirements. But car insurance is still required across the nation. Uprooting your life to save a few bucks on car insurance doesn’t really make much sense.
ShutterstockOther Important Factors
The good news is that you can influence the majority of factors that determine your monthly insurance rate. These factors include your driving record, credit score, type of vehicle you drive, and how many miles you drive each year. You can also compare rates via third-party websites.
Just remember that it’s important to shop around, even after looking at these comparison sites. They may not include the lowest price out there, since insurance companies won’t pay them a commission for signing you up. Picking up the phone is still a great way to land a low insurance premium rate.
ShutterstockNine Easy Ways to Lower Your Monthly Payment
So how can you lower your monthly premium without changing too much about your life? Take a look at the list below!
Purchase a “Green” Vehicle
It’s probably common knowledge that you get a tax break for purchasing a hybrid or alternative fuel car. But did you know it can lower your monthly insurance premium as well? “Farmers, for example, offers a 5% discount,” says Investopdia. Travelers and Liberty Mutual also give out breaks for “green” car owners. Add fuel savings to the equation and you’ve got a win-win.
Be aware, though, that some brands of electric cars can actually raise your insurance premiums. The brand new technology costs more to replace or repair, in the event of an accident.
ShutterstockDrive Less
Here’s some real talk straight from the Insurance Information Institute: “Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.”
It might seem like a no-brainer. If an insurance company knows you’re driving less, that means less time on the road. Statistically, that means fewer opportunities to get into an accident. Relatively speaking, of course. If you’re carpooling to work or even live close to your job, you’re cutting down on the number of drivers on the road. Insurance companies often ask questions like “how many miles do you drive to and from work every day?” and “how many days a week do you drive to work?” If you’re car pooling, biking, taking the bus or subway, let them know.
ShutterstockUse Behavior-Monitoring Devices
Many large companies implement behavior-tracking devices to award discounts to safe drivers. For example, Experian explains that “Progressive’s Snapshot is a usage-based program that gives you an automatic discount just for participating and additional discounts if you demonstrate good driving habits.” Liberty Mutual, Allstate, and State Farm also offer similar programs and respective discounts.
Be warned, though, that these devices or apps can be a trade off. The insurance company will use them to track your driving habits, including speeds, distance, reaction time, and frequent locations. Maybe you don’t want to share those details in exchange for a discount. The decision is yours, though.
ShutterstockTake Driver’s Ed or Be a Good Student
Good grades in school will often bring you discounts on your monthly insurance premium. If you’re long passed your schooling days, passing a driver’s ed course will show the same dedication to becoming an educated driver. “Make sure to ask your agent/insurance company about this discount before you sign up for a class,” advises Investopedia.
However, be aware that “Liberty Mutual is one of several companies that offers a good student discount for students who maintain a B average or better.”
ShutterstockBundle Your Insurance Coverage
Getting all your insurance coverage in one place really pays off. “Allstate, for example, offers a 10% car insurance discount and a 25% homeowners insurance discount when you bundle them together,” writes Investopedia. You’ve probably heard plenty of companies advertise they can insure your home, auto, boat, motorcycle, and RV too.
Bundling all your insurance at one place means a singular payment too. Do you and your spouse use separate companies for car insurance? One of you should switch. You’ll both save.
ShutterstockTake Advantage of Group Benefits
You might be able to enjoy group discounts “through professional, business and alumni groups or from other associations.” GEICO offers military families a 15% discount. Farmers also offers “discounts to a number of groups.” Speak with an agent at your insurance company to find out which groups you belong to qualify for discounts.
You should also check with your employer or any community groups you are involved in. They may offer group discounts for specific companies.
ShutterstockReduce Your Coverage
While you should always carry the minimum auto insurance coverage per your state requirements, you may be able to adjust a few details to lower your cost. For example, you might b able to reduce (or remove) collision coverage on your vehicle. Just be aware that you’ll be on the hook for paying to repair your vehicle in the event of a crash. You might also be able to change the amount of comprehensive coverage you have.
Changing these things are a risk. You won’t get the same help from the insurance company if your car needs repairs. Removing these coverages might not actually be allowed if you’re still paying off your vehicle. However, if you’re driving an older, paid-off car that might not be worth fixing anyway, consider reducing your coverage a bit.
ShutterstockIncrease Your Deductible and Good-Driving Habits
One of the best ways to lower your monthly auto insurance premium is to maintain a spotless record. You’ll find “companies like Liberty Mutual beat the competition by offering discounts to those with clean driving histories.” It makes perfect sense.
Insurance companies are more generous to customers who don’t regularly cost them money in accident claims. It pays to play by the rules when it comes to auto insurance.
ShutterstockBoost your Credit Score
According to the III, “most insurers use credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims.” Staying financially secure apparently plays into driving safe and respecting the law.
However, insurance providers in California, Hawaii, and Massachusetts are not allowed to include your credit score in formulating your monthly insurance premium. Keep this in mind as you shop.
ShutterstockIncrease Your Car Insurance Savings Today
There are plenty of other ways to save on car insurance, too. For example, receiving an electronic bill could save more than just a few trees. Owning a house (or at least a garage) where you can park your car inside makes a big difference in the insurance company’s eyes. Recently married or just graduated college? Check with your insurance company to see if you qualify for a discount.
Putting even $10 extra back into your monthly budget could make a difference over time. Speak with an agent at your auto insurance company to see what discounts you could be taking advantage of. Shop around for better rates and compare. If you’re in the market for a new car, consider what your monthly insurance premium will be for each car on your shortlist. Be a smart shopper and get the most out of your auto insurance policy.
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