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How to Get Lower Car Insurance Rates

I’m going to share the conventional and unconventional ways of lowering your car insurance in this post. Car insurance rates aren’t set in stone.

With a little tweaking here and there, you could scrape around 30% off your annual car insurance premiums.

We’ll also address key factors that affect car insurance rates.

How to Get Lower Car Insurance

Here’s how to get cheap car insurance.

  1. Look past the big auto insurance companies

You’re more likely to get lower insurance premiums and better customer service from smaller auto insurance companies, as opposed to the established ones.

A good place to start is to search out the regional car insurance companies in your locality and ask for quotes directly.

You might be surprised by what you discover.

  1. Sample quotes from different auto insurance companies across several states

You will find that the prices of car insurance from a particular company fluctuate from state to state.

In California, the quotes of a particular car insurance company can be the cheapest, with the same quotes being high in another state like Florida.

You could use an independent broker to find out how the quotes of different car insurance companies vary from state to state before making your decision.

Every 1-3 years, it’s advisable to look around for an auto insurance company that offers cheaper rates, so you don’t get stuck where you are paying more than you have to.

  1. Opt for a high deductible

Bumping up your deductible could shave off a significant amount of the premium you pay to your insurer regularly.

A deductible is the amount you pay out of pocket whenever you file a car insurance claim. You usually pay it before your insurance company settles your claim.

You could ask your insurer how raising your deductible would affect the premium on your collision, comprehensive, and other coverages you might have.

If you’re a safe driver with a clean driving record, more often than not, you’re going to save on the premiums you pay by raising your deductible.

Related: How Does Car Insurance Deductible Work?

  1. Add home insurance to your car insurance

Most auto insurance companies have a multi-policy discount where you’re rewarded for bundling your home insurance along with your car insurance.

Not just home insurance, if you add any other kind of insurance policy to your car insurance, you could qualify for a multi-policy discount.

You could save anywhere from 5% to 20% by combining another insurance policy with your auto insurance. Ask your insurer how it works and key into it.

  1. Use discounts you qualify for

There are a host of auto insurance discounts sweetly waiting for drivers to take advantage of them.

If you ask your insurance agent or broker for a list of all discounts, you will find discounts for:

  • Registering more than one car with the same insurance company
  • Insuring a new car that’s less than three years old
  • Attaining good grades in school for students and teens
  • Possessing certain professional certifications and qualifications
  • Being a member of the military, whether active or retired
  • Accident-free driving for three years

While noting the discounts of your auto insurance company, also observe if their final insurance price is lower than other car insurance companies.

If it is, and they possess amazing discounts like the ones above, then you’re good to go.

  1. Complete a defensive driving course

Old and new drivers alike can get a certain cut off their premium by successfully completing a defensive driving course.

Before undergoing this course, make sure you’ve confirmed that there’s a discount attached to completing it from your insurer and that your insurer approves of the course.

You don’t want to spend time, effort, and money in undergoing this safety driving course only to end up with no tangible reward that cuts costs on your auto insurance.

  1. Try out usage-based auto insurance

Switching to a usage-based performance can lower your car insurance if you’re a safe driver who covers low mileage annually.

By installing an electronic tracking device in your car, your insurer can track how many miles you’ve covered, how well you drive, and how often you apply the brakes.

The information automatically gets transmitted to your car insurance company.

It’s a good option to try this out if you usually cover less than 10,000 miles every year and you don’t drive around too much.

Your auto insurance company could reward you with a lower insurance rate if you drove carefully with little mileage.

  1. Install car safety features

Adding car safety features to your vehicle like antilock brakes, car alarms, engine cut-off systems, and airbags could propel your car insurance company into reducing your overall premium.

Cars with such features have a low risk of getting stolen, which could reduce the number of times you file for claims.

There’s a good chance that your insurer has discounts for cars armed with these safety features.

  1. Get a good credit score

Poor credit history and scores have been found to increase car insurance rates time and time again.

As a matter of fact, a study revealed that car insurance rates can be increased by a hundred dollars yearly with the presence of poor credit.

This makes sense, considering that if you’re able to bring down your debt, make card payments on time, keep spending below your line of credit, and do all these things that improve your credit history, then you’ll also be able to make prudent decisions about your car and its insurance.

Most times, auto insurance companies pay more attention to your credit history than your driving record while adjusting your car insurance rates, except in a few states.

  1. Drop auto insurance policies you don’t need

From time to time, review the number of auto insurance policies under your belt and take down those you can do without.

Your needs change over time and it should reflect in your current coverages.

Take a long, hard look at any other policy aside from your liability coverage, and see if you can survive without them.

  1. Cut down coverage on older cars

A good rule of thumb is to drop coverages for cars whose current worth is less than your deductible and annual premium. This is especially true for older cars.

If your deductible is $1000, your annual premium payment is $500, and the current value of your car is $1200, then it makes sense to drop optional policies like collision and comprehensive coverages.

This is because insurance companies will only pay out the current value of your car during an accident. And the current value of your old car in this case is $1200, just a little more than your deductible of $1000.

In this case, it’s best to use only mandatory policies like liability coverages.

  1. Agree to receive and sign documents online

Most auto insurance companies dish out automated discounts to drivers who agree to receive their documents online through email.

They also extend some benefits for signing those documents online.

I guess insurers find it a relief to go paperless and reduce the number of customers physically visiting their offices.

  1. Make a full upfront payment of your premium

Major car insurance companies would give you a little discount for paying your premium at once, instead of spreading it over a year or month.

If you’re financially capable of making an upfront payment for your premium, try doing so as you would save up a couple of dollars in the long run.

What are the 3 factors that lower your cost of car insurance?

The three factors that lower your cost for car insurance are your driving record, credit history, and deductible.

Before determining your car insurance rates, your insurer will examine your driving record for traffic violations and at-fault accidents to see your level of carefulness behind the wheel and determine how likely you are to file claims for car accidents.

If your driving record indicates that you’ve been a regular recipient of tickets or a major catalyst for road accidents, your auto insurance rates are likely to end up higher than usual.

The second factor is your credit history. Except in a few states where it’s banned, car insurers employ the use of credit-based insurance scores to adjust rates, because it gives a fair idea of the rate at which you’ll file a claim.

Drivers with good credit scores are drivers who’ll make good and safe driving decisions on the road. And auto insurance companies reward drivers like these with lower insurance rates.

Lastly, your deductible also affects your car insurance cost because it directly affects the premium you’ll pay.

If you’d like to pay a low premium for your car insurance coverage, then you need a high deductible. Conversely, a low deductible makes you pay a higher premium.

Can I ask to lower my car insurance?

No, you can’t ask to lower your car insurance because car insurance rates are set by the state government.

However, you can make some decisions to cut down on premiums and reduce the overall insurance costs.

Some of them are getting a high deductible to pay low premiums and utilizing discounts offered by your auto insurance company.

What can you do to reduce your auto insurance premiums?

Here’s what to do to reduce your auto insurance premiums:

  • Set a high deductible: A high deductible lowers the amount of premium you’ll pay toward your car insurance coverage.
  • Maintain a good driving record: A clean driving record free of at-fault accidents and traffic violations goes a long way in bringing down your premium.
  • Aim for a good credit score: Pay your credit card bills on time, and avoid going into debt to get a good credit history, as it could lower your premium.
  • Combine your home insurance with your car insurance: Bundling your home and car insurance together can bring down the cost of your car insurance premium.
  • Avoid filing for claims regularly and unnecessarily: Filing claims regularly could increase the premiums you pay for your coverage.

Also Read: How to Get Car Insurance in 9 Easy Steps

Bryan Grey
Bryan Grey
Bryan shares insightful auto insurance advice to help car owners make the best of different car insurance policies available to them.
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