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Tips and Ideas for Cutting Car Insurance Costs

Car insurance is necessary to protect you financially when behind the wheel. Whether you just have basic liability insurance or you have full auto coverage, it’s important to ensure that you’re getting the best deal possible. Wondering how to lower car insurance? Here are 15 strategies for saving on car insurance costs.

KEY TAKEAWAYS

  • One of the ways to lower car insurance is through a discount bulk rate for insuring several vehicles and drivers at once.
  • Lower car insurance rates may also be available if you have other insurance policies with the same company.
  • Maintaining a safe driving record is key to getting lower car insurance rates.

How Much Does Car Insurance Cost?

Car insurance costs are different for every driver, depending on the state they live in, their choice of insurance company and the type of coverage they have. But when trying to save money on car insurance, it helps to know what the typical driver pays.

On average, the typical person spent $1,190 on car insurance in 2018, based on the latest figures available from the National Association of Insurance Commissioners (NAIC). According to the NAIC data, car insurance premiums rose 30% between 2014 and 2018, despite the number of insured vehicles only rising by 7%1.

Data from AAA put the average cost of car insurance for new vehicles in 2020 slightly higher, at $1,202 annually2. The numbers are fairly close together, suggesting that as you budget for a new car purchase you may need to include $100 or so per month for auto insurance.

Note

While some things that affect car insurance rates–such as your driving history–are within your control others, costs may also be affected by things like state regulations and state accident rates.

How to Save on Car Insurance Costs

There are a number of strategies you may use to save on car insurance. Once you know how much is car insurance for you, you can put some or all of these tactics t work.

1. Choose Best Car Insurance Companies

The best car insurance company isn’t necessarily the cheapest but they can get the cheapest insurance rates in the market if you opt for their multiple discounts offered by them. It’s tempting to shop for a new insurance policy based on price alone, but you need a company that will be there for you when it comes time to make a claim. After all, you don’t want to choose the cheapest car insurance quote only to find that it doesn’t provide the protection you need. 

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The top car insurance companies which regularly tops J.D. Power auto insurance studies one of the best providers in terms of customer satisfaction and value. These companies were well known for their high customer ratings and affordable coverage options, including accident forgiveness.

Here is the list of top car insurance providers.

2. Take Advantage of Multi-Car Discounts

If you obtain a quote from an auto insurance company to insure a single vehicle, you might end up with a higher quote per vehicle than if you inquired about insuring several drivers or vehicles with that company. Insurance companies will offer what amounts to a bulk rate because they want your business. Under some circumstances they are willing to give you a deal if it means you’ll bring in more of it.

Ask your insurance agent to see if you qualify. Generally speaking, multiple drivers must live at the same residence and be related by blood or by marriage. Two unrelated people may also be able to obtain a discount; however, they usually must jointly own the vehicle.

If one of your drivers is a teen, you can expect to pay more to insure them. However, if your child’s grades are a B average or above or if they rank in the top 20% of the class, you may be able to get a good student discount on the coverage, which generally lasts until your child turns 25. These discounts can range from as little as 1% to as much as 39%, so be sure to show proof to your insurance agent that your teen is a good student.

Incidentally, some companies may also provide an auto insurance discount if you maintain other policies with the firm, such as homeowners insurance. Allstate, for example, offers a 10% car insurance discount and a 25% homeowners insurance discount when you bundle them together, so check to see if such discounts are available and applicable.

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