The best ways to lower your auto insurance premiums are to shop around among insurers, take advantage of any discounts you can, and adjust your coverage to fit your budget. drivers can save an average of 64% by switching from full coverage to minimum coverage, for example.
8 Ways to Lower Your Car Insurance Costs
- look for a lower rate
- look for discounts
- raise your deductible
- reduce your coverage
- reduce your mileage
- buy car insurance
- improve your credit
- move to another city or state
With the average cost of full coverage auto insurance at $1,997 per year, it’s important to look for savings opportunities wherever they may be. And while some factors that affect insurance rates can’t be changed easily, like age, gender, location, and race, others can. Learn more about how to lower your auto insurance premiums using wallethub’s eight tips below.
how to lower your car insurance
1. look for a lower rate
Insurance companies charge different rates for the same coverage. they also treat the factors that go into your rate (driving history, age, credit history, etc.) differently. Finding the best company for the type of driver you are can save you a lot of money.
When shopping for insurance, you should always get three or more quotes to compare. And you can maximize your savings by comparing purchases every 6 to 12 months, when your policy is about to renew.
for more information, see wallethub’s guide to switching car insurance companies.
2. look for discounts
All major insurers offer discounts based on your driving record, vehicle features, and policy options. For example, many insurers offer discounts that allow drivers to save up to 25% by going paperless, paying online, accepting automatic payments, and paying for the entire policy up front.
You should review all the discounts your insurer offers to make sure you’re saving as much as possible. For more information, check out Wallethub’s guide to car insurance discounts.
3. increase your deductible
The higher your deductible, the less you’ll pay for your premium. for example, going from $250 to $500 could reduce the cost of your collision and comprehensive coverage by up to 30%. and if you go from $500 to $1,000, you could save an additional 31%.
But be careful not to make your deductible too high. There are very few scenarios where you can avoid paying a car insurance deductible, and if you’re in an accident, you don’t want to have to pay more out of pocket than you can afford.
for more information, check out wallethub’s guide to auto insurance deductibles.
4. reduce your coverage
There are two ways to save on auto insurance by reducing coverage. First, you can lower your policy limits. the other option is to eliminate unnecessary coverage types. For example, if you own an old car that isn’t worth much, you might consider dropping collision and comprehensive coverage.
If you decide to reduce your coverage, be sure to continue to comply with your state’s insurance laws, as well as the coverage requirements of your lender or landlord.
5. reduce your mileage
Insurers take your annual mileage into account when calculating your premium, so consider carpooling to work, biking locally, or using public transportation. Alternatively, some insurance companies offer electronically monitored usage-based insurance that bases your rate on your driving habits. With some programs, you can get deep discounts. For example, State Farm says that drivers who log relatively few miles in their program can save up to 50% on their insurance.
6. buy a safe car
Factors that affect the cost of insuring a car include its value, body type, make, and age. expensive cars, sports cars, and cars with high theft rates are more expensive to insure than cheaper, less risky vehicles. Before you buy a new car, you should get an insurance quote and decide whether or not the cost of coverage fits your budget.
7. improve your credit
Because your credit history correlates with your likelihood of filing an insurance claim, insurers in most states take credit data into account when setting your rate. On average, drivers with no credit pay 67% more for auto insurance than drivers with excellent credit, according to wallethub analysis.
As you gradually build and improve your credit, you will eventually start to see a drop in your insurance premiums. To help you do this, Wallethub offers personalized advice to improve your credit, along with free credit scores and reports.
8. move to another city or state
You probably don’t plan on moving just to save on insurance, but the area you live in significantly affects your rates. Less densely populated neighborhoods with fewer cars and less crime put you at lower risk of accidents, robberies, and collisions with injuries. And if you live in an area that’s especially prone to certain natural disasters, you’ll likely file a claim at some point.
bottom line: how to reduce car insurance
If you really want to lower the cost of car insurance, your first step should be to compare the price of your current insurance policy with quotes from several other companies. It’s also important to visit the website or call the customer service department of your current insurer and make sure you know about all the ways you can save with them. Finally, remember to repeat these steps regularly, at least once a year. otherwise, you could be throwing money away without knowing it.
video on how to reduce your car insurance premiums
ask the experts
To learn more about how to lower car insurance premiums, Wallethub posed the following questions to a panel of experts. Click on the experts below to see their biographies and answers.
1. What is the best way for drivers to lower their car insurance? 2. How often should drivers look for lower car insurance rates? 3. Can auto insurers really save drivers as much as they advertise by switching companies?