The Definitive Guide To Lower Car Insurance From CheapInsurance.com
According to the Insurance Information Institute, the average American spends over $1,070 on car insurance every year. This equals about $89 per month.
With a median household income of $70,784 in 2021, this means that on average, Americans are spending nearly 2% of their income on auto insurance alone.
As we all know, our car is not all that we need to insure. What about medical insurance and home insurance?
When we add up the cost of the insurance rates that we pay, it makes sense to try and trim auto insurance costs wherever possible.
By finding lower car insurance premiums, you can put money back in your pocket that can either be saved, or used on other purchases you would rather make.
How to Get Lower Car Insurance Premiums
If you feel that your insurance company is charging you too much for your car insurance, this article will be very useful in showing you ways that you can save money.
Although it may seem complicated or tedious to lower your car insurance premium, we will show you how easy it can be to get better rates from your insurance company.
Here are our 15 top ways to get lower car insurance premiums:
- Shop around.
- Take advantage of discounts.
- Don’t pay for car insurance coverage that you don’t need.
- Increase your deductible.
- Improve your credit score.
- Update your car insurance policy annually.
- Choose a cheaper car.
- Maintain a clean driving record.
- Take a defensive driving course.
- Add safety and security features.
- Park your car in a garage.
- Get pay-per-mile car insurance.
- Reduce coverage on an older car.
- Bundle your car and home insurance cover.
- Ask about group insurance.
How Are Car Insurance Premiums Calculated?
In the U.S., car insurance is regulated at state level. This means that each state has different laws on auto insurance coverage.
The state decides on how much minimum insurance coverage you need, how much car insurance companies need to cover, and what factors insurance companies can use to determine rates.
Depending on the state that you live in, you could either pay more, or less, for your car insurance compared to other states.
For instance, New Hampshire does not require car insurance, while in Michigan, car insurance is costly because of their no-fault law that requires unlimited coverage for personal injury protection (PIP).
When deciding on your auto insurance premium, an insurance company will consider your:
- Age: Your insurance premium will tend to become less expensive with age.
- Credit score: A better credit score equals more favorable insurance rates.
- Area: Safer locations, including those that don’t experience severe weather, mean cheaper insurance rates.
- Driving history or driving record: A clean driving record will significantly reduce your auto insurance costs.
Insurance companies will also give you an insurance quote based on the make, model, and age of your vehicle.
Discover the Secret to Getting Lower Car Insurance Rates from Your Insurance Company
Now that you have an idea of the ways in which you can save money on your auto insurance policies, let’s uncover exactly how this can be done.
1. Shop around for cheaper car insurance premiums
Some insurance companies offer cover across the U.S., while others only offer coverage in the state they are situated in.
Choosing a local or national insurance company will make a difference to the cost of your car insurance premium.
The best approach is to get insurance quotes from multiple insurance companies.
You will need to decide whether you want minimum liability insurance or full coverage car insurance.
Key Point: What Is the Difference between Minimum Liability Insurance and Full Coverage Car Insurance?
Minimum liability insurance is the least amount of coverage that you need to have in place to pay for any damages that you may cause in an accident.
Full coverage car insurance includes minimum liability insurance, plus comprehensive coverage and collision coverage.
The easiest way to get tailored quotes from car insurance companies is to use our free quote generator.
All you need to do is enter your zip code at the top of this page to start your free quote.
2. Take advantage of discounts on car insurance rates
An insurance company will likely offer you discounts if you have not had any accidents or committed moving violations for a few years.
There are also other discounts that you should inquire about when shopping around for insurance quotes, or when you are finalizing an insurance quote with an auto insurance company.
These can include:
- Installing anti-theft devices.
- Bundling auto insurance and homeowners insurance.
- Defensive driving courses.
- Long-time customer discounts.
- Insuring more than one car.
- No accidents in 3 years.
- No moving violations in 3 years.
- Student drivers with good grades.
However, the key to saving is not only based on the discounts that a car insurance company offers.
You may be able to find an insurer that offers lower premiums overall, without them offering discounts.
3. Don’t pay for car insurance coverage that you don’t need
Some insurance companies will provide you with a few extra insurance options such as roadside assistance or car rental coverage.
You may, for example, not need these benefits if you are living in a city and don’t often drive on the interstate.
It may also be possible that you can borrow a car from your family or a friend in the event that your car is in for repairs after an accident. This will help you save on your insurance premiums, too.
Be sure to read through your insurance policy thoroughly and make sure that you are only getting the coverage that you need.
4. Increase your deductible to get cheaper auto insurance
You can save on car insurance by increasing your deductible.
A deductible is the amount of money you would have to pay before an insurance company pays out in the event of an accident, theft, or any other type of damage to your vehicle.
Depending on the insurance policy that you have in place, your deductible could range from $250 to $1,000. The lower your deductible is, the higher your insurance premium will be.
By lowering your deductible and avoiding making claims for smaller damages to your car, you can significantly reduce the amount you are spending on your auto insurance.
When deciding to reduce your deductible, it’s important to note that you will need to have some money saved in the event of a collision or theft.
This is because your insurance company will pay out less money and you will need to cover more in the event of a claim.
5. Improve your credit score to lower your car insurance
In some states a credit check may be part of the risk assessment that is done by insurance companies.
Sometimes people with higher credit scores are able to pay reduced car insurance costs because they are seen to be more responsible drivers.
To get a good credit score, make sure that you pay your bills on time every month and decrease your credit utilization rate.
Your credit utilization rate relates to the amount of credit that you are using at any given time.
In other words, this could be credit that you are using on credit cards and store accounts.
You can also check if your credit report is accurate and correct. The better your credit report is, the less likely you are to pay increased car insurance costs.
6. Update your car insurance policy annually
Your vehicle gets older with every passing year and if you haven’t had any insurance claims, it’s good to review and update your car insurance policy.
Enter your zip code at the top of this page to start your free quote and compare car insurance quotes today.
The best time to check for cheaper insurance rates is just before the annual renewal of your insurance policy.
This will give you time to shop around for cheaper insurance rates and see whether you can save money.
It’s important to go through this exercise on an annual basis to make sure you’re getting the best possible auto insurance rates.
There is also the chance that, in an effort to keep you as a customer, your insurance company will offer you a cheaper auto insurance premium.
7. Choose a cheaper car to save on car insurance
One of the major factors that affects your car insurance costs is the type of vehicle you drive.
If you are in the market for a new vehicle, it’s essential that you consider how much it will cost to insure.
It’s also important to remember that the cheapest vehicle is not always the least expensive to insure.
Generally, the more expensive the car is to repair, the higher your car insurance costs.
You can save on car insurance if you choose one of these vehicle models, since they are known to be cheaper to insure:
- Subaru Outback.
- Jeep Wrangler.
- Honda CR-V.
- Subaru Forester.
- Ford Escape.
- Ford F-150.
Older cars are not always cheaper to insure. It all depends on the make and model of the vehicle that you are looking to buy.
Before investing in an older car, be sure to check the insurance rates for that vehicle.
8. Maintain a clean driving record to reduce car insurance costs
Safe drivers with a clean driving record are more likely to save on auto insurance.
By avoiding auto accidents by driving in a safe manner, insurers are more likely to offer you discounted insurance. This is because they will see you as a less risky driver to insure.
To get the best possible insurance rates available, make sure that you avoid speeding. Also, try to avoid damaging your car by driving and parking carefully.
Accidents where you are at fault and DUIs can significantly increase your insurance premiums.
If you are a driver that has a claims-free or violation-free driving record, you will receive additional discounts.
9. Take a defensive driving course to get cheaper car insurance
Sometimes, auto insurance companies will provide a discount for drivers who complete an approved defensive driving course.
Defensive driving courses provide you with an opportunity to improve your awareness and attention on the roads to become a safer driver.
It’s also good to know that if you have any points on your driving license, you may also be able to reduce these points by taking a defensive driving course.
Make sure that you check in with your insurance company before sign-up for a class.
Not only will they advise whether the course you are interested in is an approved course, but they will tell you how much of a discount you are able to receive by taking the course.
It’s important to weigh up the cost of taking a defensive driving course, along with the effort of doing so.
This will help you evaluate whether the cost measured in money and time is worth the benefit you are likely to receive from your insurer.
10. Add security features to your car to get cheap car insurance
You save money on your car insurance premiums if you have an anti-theft system installed in your car.
Your insurance company will be able to tell you which specific devices are approved and suitable for your car, which when installed can lower your premiums.
Depending on the neighborhood in which you live, installing an anti-theft device may be useful beyond just the cost saving on your auto insurance.
If you don’t really need an anti-theft device in your area, then consider if the cost of adding a device will reduce your insurance premiums enough to warrant the time and expense.
11. Park your car in a garage to get a cheaper car insurance rate
Many insurance carriers will charge you lower rates on your auto insurance policy if you park your car in a garage.
This is because your car is less likely to either be stolen, or damaged should another vehicle collide with it while parked outside.
If you are able to reduce the risk of your car becoming damaged, you are less likely to make an insurance claim, which means that you can ask for a discount on your auto coverage.
12. Get pay-per-mile car insurance and enjoy lower auto insurance costs
Insurers will take your average annual mileage into account when quoting you on your auto coverage.
To help you save on insurance, some insurers will let you install an electronic device on your car which will monitor the distance you travel.
They will then calculate your insurance premium based on your mileage. By driving fewer miles you can earn really significant savings on your auto insurance.
13. Reduce coverage on an older car to get a cheaper car insurance premium
If you drive an older car, consider removing comprehensive insurance and collision cover from your policy.
This is because if your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective.
Auto dealers and banks will be able to advise you on what your car is worth. You can also look up the value of your car online with Kelley’s Blue Book.
14. Bundle your car and home insurance to save money
Combining your auto and home insurance policies is one of the easiest ways to lower your premiums with your insurance company.
Regardless of whether you rent or own your home, you can bundle home and auto insurance policies to save money.
In addition to getting a great discount, you will save time when you only have one insurance account to manage.
15. Ask about group insurance to lower your car insurance cost
Some insurers will offer discounts to drivers who get a group insurance plan from their employers.
This also applies to group insurance that is arranged by professional, alumni, or business groups and other associations.
Ask your employer and inquire with groups that you are a member of to see whether you are eligible for cheaper auto insurance under their group insurance policy.
Get the Cheapest Car Insurance Today, with CheapInsurance.com
Finding cheaper insurance quotes can be a time-consuming exercise.
Once you have identified the ways in which you can save money on your auto insurance, it’s time for you to start comparing quotes.
At CheapInsurance.com, we’ve got you covered!
You can start comparing your car insurance quotes by using our free quote generator—simply enter your zip code at the top of this page.
When you have an idea of the auto insurance premiums that you could be paying, all you need to do is contact the insurers to get a formal quote.
From there, you can speak to the insurer and find discounts that you believe would be relevant to your needs and driving profile.