How to lower your car insurance
Insurance companies rely on data to set insurance premium rates. But the cost you’re paying now doesn’t have to be what you’ll always pay. Here’s what can help lower your car insurance costs.
Attend a safe driving course
Some insurance companies offer a discount on insurance premiums if you attend a safe driving course. These courses are also known as defensive driving courses and are different from a driver’s education course taken before getting a license. Safe driving courses are designed to improve your driving skills and prepare you for various driving scenarios.
Courses may be available through your insurance provider or an approved third-party organization. For example, AARP offers online and in-person versions of its Smart Driver course. Ask your insurance agent for a list of qualifying courses and requirements.
Bundle insurance policies
Another way to cut costs is by bundling multiple insurance policies through the same insurer. “Bundle insurance with other coverage,” says Nestor Solari, CEO and co-founder of Sigo Seguros. “And make sure all vehicles at your address are on the same policy.”
Insurance companies may offer a discount if you carry two or more types of insurance with them, like auto and homeowners insurance.[2] Bundling your insurance also means you have only one payment to manage and one account login.
Increase your deductible
A deductible is your out-of-pocket cost before your insurance kicks in. By requesting a higher deductible, you can lower your monthly premiums. Raising your deductible from $200 to $500 could reduce your monthly insurance costs by 15% to 30%.[2]
Boosting your deductible increases your out-of-pocket cost when filing insurance claims. Before increasing your deductible, make sure you have money set aside to cover potential insurance claims.
Check Out: No-Deductible Car Insurance: Is It Right for You?
Pay per mile
If you don’t drive very often, switching to a pay-per-mile car insurance program could help you save money. These programs are geared toward low-mileage drivers and are available through some insurance providers.
With pay-per-mile programs, you pay a base monthly rate, plus a per-mile rate. A pay-per-mile program could save you significantly if you work from home, rely on rideshares, use public transportation, or have a short commute. Check with an insurance agent to see if pay-per-mile car insurance is available where you live.
Shop around for lower rates
One of the best ways to save money is to shop around for the best rates.[2] Even if you’re satisfied with your insurance company, it’s worth looking at competitors to see whether you can save money.
“Shop every two years or so, as this is often a time when discounts change, and you may see an increase in your price,” Solari says. Compare multiple insurance quotes to find out whether you’re getting a good deal or whether you can save money by switching insurance providers.
Build a good driving record
Maintaining a good driving record can also lead to additional discounts from your insurance provider. As a safe driver, you not only qualify for discounts, but you also better protect yourself and others.
A history of driving the speed limit, avoiding accidents, and no driving infractions can help show your insurance company that you’re a responsible driver. Many insurance companies offer discounts for staying claim-free or traffic violation-free for a specific time.
Take advantage of good student discounts
Some insurers offer discounts for high school and college students who receive good grades and meet their insurance companies’ academic and age requirements. A good student discount could save you as much as 15%.
Generally, you have to be a full-time student younger than 25 to qualify. You may be required to provide proof, such as your current report card or transcript, to be approved for the discount.
Invest in safety features
Adding safety equipment to your vehicle can also help you score valuable discounts to reduce your monthly auto insurance premiums. By purchasing a vehicle with specific safety features, like airbags, antilock brakes, and daytime running lights, you may qualify for additional discounts.
Adding safety features after purchasing your car can also net discounts to lower insurance costs. Installing an anti-theft device can also earn you a discount with many insurance companies.
Learn More: 7 Car Features That Can Affect Car Insurance Rates
Earn multi-car discounts
Insuring more than one vehicle through the same insurance company could earn you an additional discount to lower your costs. Multi-car insurance requires having two or more vehicles at the same address on one policy. Generally, every vehicle on the policy has the same coverage, but some coverages may be customizable for individual cars.
Look for other discounts
Insurance providers offer discounts for various reasons. Beyond the common discounts, you may be able to score other discounts like:
See Also: Car Insurance Discount Guide
Drive an electric car
Some insurance companies may offer discounts for customers who drive a hybrid or electric car. Check rates to ensure you’re saving money by driving an electric car. Some insurance companies may charge more to insure an electric car, depending on where you live.
Talk to an insurance agent
Call an insurance agent if you’re looking for ways to reduce your car insurance monthly premiums. They can look over your policy to see whether you can make any changes to save money. Insurance agents may also advise you on what discounts are available and what you need to do to qualify for them.
