How can you save money on car insurance

This story is part of Recession Help Desk, cnet’s coverage of making smart money moves in an uncertain economy.

car insurance is getting more expensive. The cost of auto insurance has continued to rise throughout 2022, rising another 1.3% in July, according to the Consumer Price Index, a key gauge of inflation.

Reading: How can you save money on car insurance

Inflation aside, car insurance was already increasing from last year. Many major auto insurers began receiving approval for substantial rate increases at the end of 2021, raising premiums between 3% and 12%, according to S&P Global Market Intelligence. To top it off, gas prices have also hit record highs this year, making driving more expensive overall.

If you’re tired of paying high car insurance premiums, we’ve got some tips you can try to lower your car insurance costs and add some extra breathing room to your budget.

1. increase your deductible

Increasing your deductible (the out-of-pocket cost before your insurance pays the bill for a claim) can lower your premium. This move might make sense if you don’t drive much right now, don’t have a history of road accidents, or need to lower your monthly costs to stay insured. however, doing this could cost you later if you have an accident, as you’ll have to dish out more money before your provider covers the damage. you need to make sure you have enough money to pay the higher deductible if you end up in an accident.

2. consider lower coverage for older vehicles

Older cars may not deserve the same insurance attention as your shiny new Tesla or all the bells and whistles of a Mercedes-type policy. If your car is on its last round, you may want to drop collision coverage or comprehensive coverage for that vehicle, both of which cover damage to your car.

Whether you need to drop either coverage depends on the value of your car and the relative cost to insure it. Experts suggest that if your car is worth less than 10 times the annual premium, purchasing coverage for that vehicle may not be a cost-effective option. One of the quickest ways to check the value is by scrolling through Kelley’s Blue Book online. For example, let’s say your annual premium is $1,600; 10 times that would be $16,000. If your car is worth less than $16,000, then it might make sense to reduce the insurance coverage for that car.

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3. use public transportation or carpool when you can

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Carriers may offer discounts if you have low mileage, meaning you drive fewer than the average number of miles per year compared to other Americans. Generally, you would be considered a low mileage driver if you drive less than 7,500 miles per year, but this is not a bright line rule. what really determines if you are a low mileage driver depends on the state you live in, your age and gender. How much you can save depends on individual factors, as well as the auto insurance company you sign a policy with. state farm offers one of the cheapest monthly premiums at $128 for drivers with low mileage, according to an analysis.

If there is public transportation in your area, taking a bus a few days a week (or carpooling with others) might qualify you for low-mileage discounts. If you don’t live in an area with public transportation, you may also consider carpooling to work or school to reduce your mileage.

And if you’ve transitioned to work or study from home since the start of the pandemic and haven’t yet returned to an in-person workplace, contact your provider to let them know and take advantage of the savings.

4. group your insurance policies

One of the easiest ways to save money on insurance is to bundle your auto and home insurance, which means you buy multiple insurance policies from the same company.

allstate, liberty mutual and geico all offer premium bundle discounts, depending on which policies and coverages you buy together. you can get discounts on your premium from 5% to 25%, depending on the provider.

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5. compare car insurance prices

maybe you work from home permanently and need less coverage. Or maybe you’re going back to the office and need more coverage now. Whatever your situation, it’s always a good idea to shop around to make sure you’re getting the best rates, as other companies may offer bigger discounts or lower premiums overall.

If you’re not sure where to start, check out cnet’s car insurance roundups, where you can see our picks for best overall car insurance, cheapest car insurance, best policies for teens and young drivers and the best options for military and veterans.

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In addition to getting quotes online, you can contact some of the major insurance companies directly to inquire about possible discounts.


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