Finances

7 Ways to Save Money on Car Insurance

Here are a few proven ways for you to save money on car insurance and make better use of your money.

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Inflation is still here, so it is crucial to save money where you can

If you have a car, you need car insurance! Learn how to find the best one for you. Source: Canva.

Contrary to what most of us hoped for, car insurance keeps getting more expensive. Let’s see how you can save money on car insurance.

Throughout 2022, the cost of car insurance has increased significantly according to a key indicator of inflation known as the Consumer Price Index (CPI).

To be fair, while it is true that inflation has pushed prices up, car insurance prices were already on the rise last year before the FED started raising interest rates to control inflation.

By the end of 2021, a significant portion of car insurers started getting approvals for considerable rate increases.

According to S&P Global Market Intelligence, insurers have raised premiums anywhere from 3% to 12%. 

Now take into account the rise in gas prices to record highs this year, and overall driving has just become much more expensive than before.

This article has the objective of helping you try to reduce your auto insurance costs.

So keep reading, and by the end of this text, you may be able to add some extra breathing room to your budget.

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1. Increase your deductible.

The deductible is the amount you pay out of pocket to cover a loss. If you increase your deductible, you can lower your premium.

This can be an especially smart move if you do not have a history of getting involved in accidents on the road.

It also makes sense to do it if you are not driving much at the moment.

Another good indicator that this is a profitable strategy for you is if you need to reduce the monthly cost of your insurance to keep your car under insurance coverage.

If you get involved in an accident later on, this could cost you. You are going to have to pay more money before the carrier covers damages. 

So before adopting this strategy, make sure you take all the precautions to stay financially sound in the event of an accident.

2. Have an older vehicle? Consider lower coverage to save money on your car insurance

Some vehicles need less coverage, and this can help you save money. Source: Canva.

It is one thing to get insurance for a brand new Tesla, it is a different thing to get insurance for a 2012 Honda.

An older car most likely does not need the same insurance attention as a brand new one.

If you have an older car, you might want to consider cutting out collision coverage or comprehensive coverage for your vehicle.

Most experts agree that when the annual premium is more than 10 times the value of the car, buying insurance coverage for that car is unsound, to say the least.

3. Use carpool or public transit.

A low mileage count means you drive less than the average of other Americans. Low mileage may prompt carriers to offer you discounts.

Carriers will consider low mileage if you drive less than 7,500 miles per year. However, “low mileage” is a relative concept which varies according to the state you live in, your age and gender.

Choosing the right insurance company to work with can also affect how much money you will save. 

To keep your mileage low, check if there is mass transit in your area and take a bus a few days a week. You can also carpool with others so that you drive less.

Also, if you have been working or studying from home, it would be wise to let your carrier know about that.

This definitely counts towards a discount.

4. Buy multiple insurance policies from the same company.

This is one of the most straightforward ways to save money on your car insurance.

Bundle your home and auto insurance, and the company is going to want your business even if they have to give you a discount.

A number of insurance companies offer premium discounts for bundling.

Some insurers include GEICO, Liberty Mutual and Allstate. You can get anywhere from 5% to 25% discounts.

5. Shop around for rates

Always search for the best deal before getting your car insurance. Source: Canva.

No matter what your situation is, whether you need more coverage or less coverage, it is always wise to shop around to make sure you get the best rates.

Searching online for quotes is probably what first comes to mind.

However, if you are one of those sharks who believe they can get an edge if they just talk to someone, you can reach out directly to insurance companies and ask about discounts.

Here are a few of them and their numbers for you to call.

  • GEICO (1-800-207-7847) 
  • USAA (1-800-531-8722) 
  • State Farm (1-800-782-8332)
  • Progressive (1-800-776-4737) 
  • Liberty Mutual (1-800-290-7933) 
  • Farmers (1-888-327-6335)
  • Allstate (1-877-810-2920)

6. Check for safe driving discounts.

You might not know that, but if you are one of those people friends and family like to have on the driver’s seat because they feel safe with you behind the wheel, you can use that as leverage.

Carriers actually offer discounts for modest claims and safe driving history. Just call your carrier and ask them how to enroll in one of these programs.

As soon as you have been successfully enrolled, your next bill should come with a lower premium.

Some companies (such as State Farm) offer accident-free discounts if you haven’t been involved in accidents in the past three years. 

They also offer good driving discounts, which means you get a lower premium for going three or more years without at-fault accidents or moving violations.

Look for telematics insurance programs. These programas monitor your driving behavior and mileage via a car plug-in device or phone app. 

In such programs discounts may vary by state and carrier. Still, enrolling could get you savings of up to 30% off your premium, so they are worth a try.

The way these programs work is you start at a base rate, and the rate is adjusted according to your recorded average speed, braking habits, and other factors present in the telematic report.

7. Get a less expensive car.

As much as a car can be a symbol of status and you might want to show it off, sometimes you just have to resist that urge.

The car’s price, repair costs, and other factors play a central role in determining auto insurance premiums.

To help you put things into perspective, while insurance on a Honda could cost you on average $2,151 a year, a Mercedes could cost you $4,505 or more. Think about that.

Does paying car insurance improve your credit score?

When it comes to finances, credit scores are a top-of-mind topic. While it seems that everything will bring your score down, it is not easy to bring it up.

And while we’re talking about car insurance, it’s worth considering: does paying your car insurance always on time help boost your credit score?

The answer to this question is on the following content here on this same portal.

paying car insurance concept

Does paying car insurance help your credit score?

Read on and find out whether paying car insurance helps your credit score.

About the author  /  Danilo Pereira

Danilo is a copywriter with a passion for learning. Deeply interested in philosophy, politics and arts.

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