10 Tips to Save Money on Car Insurance
Car insurance costs more than $1,500 per year for the average driver, but it's easy to lower your car insurance rates.
For example, you could cut costs by 10% if you switch to paperless bills or set up autopay. And you could see 50% savings on your car insurance from bigger changes like improving your credit or trying usage-based insurance.
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1. Change how you pay your bill
The easiest way to lower your car insurance premium is to rethink how you pay your bill.
Most national insurance companies offer discounts for paying online, choosing paperless statements by email and signing up for automatic payments. You can also save by paying for an annual policy in full, instead of making monthly payments.
These car insurance discounts could save you as much as 10%, depending on the insurer. However, most insurance companies have a limit to how much you can save with discounts, or only give sign-up discounts on your first six-month or 12-month bill.
Discount | Average annual savings |
|---|---|
| Autopay discount | 5%-10% |
| Paid-in-full discount | 5%-10% |
| Paperless discount | 5%-10% |
| Quote-in-advance discount | 3%-10% |
2. Find membership savings
Many car insurance companies offer 2% to 10% auto insurance savings for drivers who are members of certain affinity groups or work in specific professions.
For example, Geico offers drivers a 3% discount for hundreds of professional and alumni organizations. That includes fraternities, sororities, honor and academic societies, and trade and professional groups.
Your job could also qualify you for a discount of up to 9% from auto insurance companies like Geico, Farmers, Liberty Mutual and Nationwide. For example, you might get a discount if you're a teacher, nurse, emergency responder, military member or federal employee.
3. Only keep the coverage you need
Another easy way to lower your car insurance bill is to remove any coverage you don't need or use.
For example, you might not need roadside assistance coverage on a brand-new car because a manufacturer warranty usually covers this for the first three to five years.
If your car is worth less than a few thousand dollars or is more than 10 years old, consider dropping collision and comprehensive coverage, which could cut your bill in half.
4. Increase your collision and comprehensive deductible
Opting for a higher deductible for collision and comprehensive insurance is an easy money-saving tip if you can afford it.
Increasing your deductible from $50 to $1,000 could save you 56% on your comprehensive and collision coverage. And jumping from a $500 to $1,000 deductible could lower your bill by 25%.
Note that you'll have to pay more out of pocket for car repairs after an at-fault accident or when making a comprehensive claim. That's why this option is best for drivers with a healthy emergency savings fund.
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5. Bundle your insurance
You can save between 5% and 18% on your insurance bill when you bundle your insurance by using one company for multiple policies.
That can include auto, home, renters, condo, umbrella, life or health. The most common bundle is auto plus home insurance. This typically saves you 15% off auto insurance and up to 35% on home insurance annually.
In addition to bundling, you can also combine all your vehicles under the same policy and save up to 25% with a multivehicle policy discount. You can still customize the coverage for each vehicle even if they're on the same policy.
6. Track your driving with telematics
Usage-based insurance is a great option for safe drivers who don't drive much and want to save 30% to 50% on their annual quotes.
With telematics or usage-based insurance, a black box device or mobile app tracks your driving and gives you a discounted rate based on your driving ability and risk level.
7. Keep young drivers on a parent's policy
Having a young driver on their parents’ policy can lower their total auto insurance costs by 66%.
Adding a teen driver to a family policy will cost less overall than having a teen driver on their own policy. But if your teen has a history of accidents, claims or tickets, expect higher insurance rates for either type of policy. It’s wise to explore prices for both options in this case.
8. Update your policy details
Check your car insurance policy and coverage details to make sure the details are correct.
Even small details like your car's trim level and safety features can affect the cost to insure your car. For example, there could be a difference of as much as $1,950 a year between different Honda Civic trim levels of the same model year.
Make sure you're getting any discounts that your insurance agent may have missed, like discounts for being a homeowner, being a student with good grades or having taken a defensive driving course.
And check your policy when your situation changes. For example, you could see slightly cheaper rates if you've built a carport or poured a new driveway and no longer park your car on the street.
9. Improve your credit score
Your credit score is one of the factors that can affect your car insurance rates.
Bumping your credit score up to the next tier saves most drivers an average of 16% to 17% on their annual car insurance rates. You can see the biggest savings by improving your credit score from fair to good.
10. Compare car insurance quotes
Shopping for quotes from multiple companies is the easiest way to find lower car insurance rates. Comparing quotes to find the cheapest policy can save you as much as 50% on your annual car insurance costs compared to average rates.
Insurers consider a number of elements when setting rates, meaning the cheapest company for you may vary depending on your driver profile. Your age, driving record and what car you drive all have an effect on your auto rates. Comparing quotes is the only way to identify which company can help you save the most.
Frequently asked questions
Should car insurance rates decrease every year?
It depends on what's changed for you in the last year. If you are a young driver, you can usually expect lower rates for each year of safe driving, as long as you maintain a clean driving record without tickets, accidents or claims. Once you reach your 30s, rates tend to drop until you hit age 60.
When is the best time to get car insurance?
It's a good idea to get new quotes after milestones like getting married, moving or turning 18, 21 or 25 since those changes can lower your rates. You can switch car insurance at any time without fees from most companies, as long as you don't have a lapse in coverage when you switch to your new policy.
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