Ten Ways to Lower Car Insurance Costs
Car insurance rates are rising, but these tips could help you lower your bill
Car insurance rates are expected to climb this year, for a variety of reasons.1 These include an increase in distracted-driving accidents, the addition of various tech features in modern cars that make repairs more complicated, and the profit struggles insurers have been facing. You may see your bill go up soon, but there are things you can do to help lower your costs. Here are some ways you can save money on your auto insurance premiums:
1. Get your car insurance from the same provider as your homeowners insurance
One way to save may be to get your car insurance and your homeowners insurance from the same provider. Some insurance companies will give you a lower rate for “bundling” policies together. This gets them more of your business in the short term and also increase your chances of staying with the provider instead of shopping around when your auto policy expires.
2. Figure out what discounts are available
Regardless of what provider you're using, you should look into any potential discounts. You may be able to get a reduced rate through a group plan via your employer, a business group, or a organization like AARP or AAA. As the Insurance Information Institute explains2, you may also be able to get a discount for using anti-theft devices, being a college student away from home, being a long-time customer, not being involved in any accidents for three or more years, not having any moving violations in three or more years, or being a student driver with good grades.
3. Keep a good credit score
Some providers will also give you a discount if you maintain a good credit score.
"Your credit history is one of many 'risk factors' that most auto insurance companies evaluate when setting rates (in states where it's permissible by law)," says Michelle Megna at Insurance.com.3 "Paying your bills on time and maintaining a solid credit history will help keep your auto and home insurance rates lower – a LOT lower."
The folks behind the site commissioned the comparison of full-coverage rates for drivers with average or better credit, fair credit, and poor credit. The average difference in rates between good credit and fair was 17 percent, while the difference between drivers with good and poor credit was a whopping 67 percent!
4. Insure additional vehicles
Most insurance providers will also give you discounted rates if you insure more than one vehicle. Even if you don't have full coverage on each one, you may see a reduced cost per vehicle on your overall premium.
5. Enroll in a defensive driving course
It's in the insurance companies' best interest for you not to get into any accidents. So, they want to encourage safe driving. Enrolling in a defensive driving course or a driver's education class shows that you take safe driving seriously, and some are willing to knock off some dollars if you do so.
6. Drive a “safe” car and drive it responsibly
Similarly, insurance companies will give you a lower rate on a vehicle that is deemed to be on the safer side. Any number of increased safety features can factor into this. Your driving habits are also a big factor in insurance rates. By avoiding traffic tickets and accidents, you can also avoid increased premiums.
7. Consider a deductible increase
If you are indeed a safe driver, you should strongly consider having your deductible increased as a way to have your premium reduced. This can come back to hurt you if you do get in an accident, but it might be worth it, depending on the age or value of your car and the projected likelihood of having to make a claim.
8. Reduce the amount of miles you drive
You can also potentially save money by simply not driving as much.
As Glenn Curtis at Investopedia explains4, "If you use your vehicle to commute three hours to work every day, you will generally pay more in insurance premiums than someone who only drives one mile a day. If possible, try to use mass transit to rack up fewer miles, keeping in mind you will usually have to decrease your mileage significantly before incurring a discount. Ask your insurance company about the company's different mileage thresholds so your efforts won't be wasted."
9. Reduce your coverage on older vehicles
If you are insuring an older vehicle, it might be worth it to switch from full coverage to only liability coverage. If you're willing to junk the vehicle in the event of a significant accident, you can save money on a regular basis by not having it fully insured.
10. Explore alternative insurance providers
Perhaps the most obvious way to reduce your car insurance costs is to shop around and compare quotes from different insurance providers. Consider the other nine tips above as you do so, and you may be able to get the best rate that's available to you.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC