Did you know the average cost of car insurance in the U.S. is $190 per month? NerdWallet found that switching providers can save you hundreds of dollars a year. Saving on car insurance can really help your budget.
Knowing what affects your insurance rates helps you make smart choices. You can save money by comparing rates and using discounts. Let’s explore ways to lower your car insurance costs.
Key Takeaways
- Average car insurance cost is $190 per month.
- Comparison of rates can result in significant savings.
- Drive safely to qualify for discounts.
- Choose a car that is cheaper to insure.
- Consider usage-based insurance for additional savings.
Compare Rates from Multiple Carriers
Knowing why comparing rates works is key to getting the best vehicle insurance deals. By looking at many options, you can save a lot. For example, a Consumer Reports survey found people saved $461 a year by comparing rates.
Whether it’s Allstate at $1,780 or Progressive at $2,877 for young drivers, rates differ a lot.
Finding the right time to compare rates is also crucial. The best times to compare rates are after big life changes or every six months. This keeps your rates in line with the market and helps you get discounts.
Using online tools can make comparing rates easier. Websites that give cheap car insurance quotes let you see what different companies offer. You can see what Mercury at $2,498 or MetLife at $2,351 for young drivers have.
Looking at factors like your driving record or coverage choices can also change your rates. Here’s a comparison to show how much rates can vary across states:
| State | Non Full Coverage | Full Coverage |
|---|---|---|
| Alabama | $916 | $1,939 |
| Arizona | $953 | $1,901 |
| California | $964 | $2,249 |
| Florida | $1,508 | $2,568 |
| Hawaii | $547 | $682 |
| Michigan | $1,779 | $2,704 |
| Texas | $1,134 | $2,244 |
In summary, understanding why comparing rates works and using smart strategies to look at insurance options can save you a lot of money and get you better coverage.
Take Advantage of Car Insurance Discounts
Knowing the types of discounts available can help you get cheaper auto insurance. Discounts are a great way to make your car insurance more affordable. Let’s look at some key options:
- Safe Driving: If you’ve been accident-free for three to five years, you can get good-driver discounts. These can save you up to 10% or more.
- Multiple Policies Bundling: Bundling your auto insurance with homeowners insurance can save you about 18%. Getting all your policies from the same company can save up to 40%.
- Student Discounts: New Jersey offers a good student discount for those under 22 who meet certain school standards. You can also get discounts for young drivers who take driver training or are away from school.
- Multi-Car Discount: If you have multiple vehicles on one policy, you might get discounts from 10% to 25%.
- Professional and Organizational Memberships: Discounts are available for members of professional associations, community colleges, gyms, and other groups.
- Military and Federal Employee Discounts: Military and federal employees can get discounts from 8% to 15%.
Many insurance companies also offer special discounts, such as:
- Telematics Programs: Joining programs that track your driving can save you up to 40%.
- Electronic and Full Payments: Paying your policy in full or setting up automatic payments can lower your costs.
- Occupation-Based Discounts: Some professions may get lower rates based on the job level of the policyholder or spouse.
- Advance Quote Discounts: New customers can get a discount if the policy starts at least a day after getting the quote.
It’s important to keep in touch with your insurer because discount policies change. Regularly check that you’re getting all your eligible discounts. This helps keep your car insurance rates low. Always ask about new types of discounts available to save more on auto insurance.
Drive Safely to Reduce Premiums
Driving safely is a key way to lower car insurance costs. Insurance companies give lower rates to those with clean driving records. In 2022, drivers without accidents or violations paid $1,588 on average for insurance.
Safe driver discounts are available for those with clean records for at least three years. These discounts can greatly reduce your insurance costs. Plus, joining safe driving programs offered by insurers can also lower your premiums.
By driving safely and following traffic laws, you’re less likely to get into accidents. This means fewer claims and lower insurance costs. It’s important to avoid speeding, aggressive driving, and distractions while driving.
Choosing the right vehicle is also important. Safer vehicles, like the Honda CR-V or Toyota RAV4, cost less to insure. Small SUVs, for example, cost about $1,515 a year to insure, compared to $1,619 for electric vehicles.
There are also discounts for good driving behaviors. Enrolling in driver training courses and having advanced safety features in your vehicle can help. Safe driving habits are good for your safety and can also save you money on insurance.
Drop Unnecessary Coverage
Cutting car insurance costs is smart when you know when to drop certain coverages. If you own an older or less valuable vehicle, dropping collision and comprehensive might be wise. These coverages only pay out up to your car’s value. So, if your car isn’t worth much, keeping these coverages might not make sense financially.
Saving money from dropped premiums can help with future car needs or other insurance plans. For example, raising your deductible can lower your annual premiums. Deductibles range from $250 to $1,000, and changing this can save you a lot.
Also, bundling coverage, driving safely, and using multi-policy discounts can lower your rates. Allstate gives up to a 25% discount for bundling homeowners and auto insurance. Safe, low-mileage drivers might save a lot with Allstate’s Drivewise program.
To see how dropping collision and comprehensive coverage affects costs, look at this table:
| Coverage Type | Annual Cost |
|---|---|
| Full Coverage (New Vehicle) | $1,202 |
| Liability Only | $627 |
| Full Coverage (Older Vehicle) | $1,000 |
| Liability Only (Older Vehicle) | $500 |
Always check your car insurance with your agent each year. This ensures you’re not over-insured and keeps you informed about discounts. Life changes, like a child leaving for school or buying a new home, can also affect your insurance needs. They might help you decide when to drop certain coverages.
Choose a Car That’s Cheaper to Insure
Choosing a car that’s cheaper to insure is a key strategy for saving money. Knowing what makes a car expensive to insure helps you make a smart choice. Mid-size SUVs are often more affordable because they are safer and have lower repair costs.
These vehicles also have lower theft rates. This is a big factor in their insurance premiums.
Here’s a table showing the median annual insurance premiums for some popular vehicles. This information can help you find affordable auto insurance and get cheaper car insurance quotes:
| Car Model | Median Annual Insurance Premium | MSRP |
|---|---|---|
| Subaru Outback | $1,427 | $30,240 |
| Subaru Crosstrek | $1,469 | $25,195 |
| Subaru Forester | $1,486 | $26,973 |
| Honda CR-V LX | $1,531 | $29,500 |
| Jeep Wrangler Sport | $1,531 | $31,995 |
| Toyota RAV4 LE | $1,580 | $28,675 |
| Mazda CX-5 2.5 S Select | $1,581 | $28,335 |
| Hyundai Tucson SE | $1,613 | $27,871 |
| Ford Escape Active | $1,629 | $29,495 |
| Chevrolet Equinox LS | $1,663 | $26,600 |
SUVs like the Honda CR-V and Mazda CX-5 are known for their lower insurance rates. By looking at the Factors that Make Cars Expensive to Insure and choosing a car that does well in these areas, you can save a lot on insurance.
Increase Your Deductible
One way to cut down on car insurance costs is to raise your deductible. This means you’ll pay more out of pocket if you need to file a claim. But, it can lower your premiums. For example, in 2023, the average annual cost for minimum coverage is $622, while full coverage is about $2,014.
Going from a $200 to a $500 deductible can cut your costs by 15% to 30%. A $1,000 deductible could save you 40% or more. Deductibles usually range from $100 to $2,000, with $500 and $1,000 being the most common.
But, there are downsides. Higher deductibles mean you’ll have to pay more if you have an accident. For instance, a $500 deductible means you’ll pay $500 less than with a $1,000 deductible. The right deductible for you depends on your driving record and how much you can afford to pay in case of an accident.
Some insurance programs, like Progressive’s disappearing deductible, can help you save even more. These programs reduce or eliminate your deductible if you don’t have any claims. This is a great way to lower your premiums without losing coverage quality.
Also, some insurers, like Farm Bureau, offer discounts for bundling policies. For example, their Member’s Choice policy combines car and home insurance, saving you time and money. Safe driving programs, like Driveology®, can also give you discounts of 10% to 50% based on how well you drive.
In conclusion, raising your deductible and looking for discounts can help you save on car insurance. This way, you can get coverage that fits your budget and driving style.
Improve Your Credit Score
Knowing how credit scores affect car insurance rates is key to getting good deals. A better credit score can lower your insurance costs. So, it’s important to work on improving your score.
Begin by paying bills on time and keeping credit card balances low. These steps help boost your credit score. Also, check your credit often to make sure it’s right.
In some places, like California and Massachusetts, insurance companies can’t use credit scores to set rates. But in other states, those with poor credit might pay up to 97% more. Boosting your score by just one level can save you about $600 a year on insurance.
Experts say to keep your credit use under 30%, and even better, under 10%. This can make your score better and lower your insurance costs.
Here are some tips to better your credit score:
- Pay all your bills on time
- Keep credit card balances low
- Regularly review your credit report for errors
- Limit new credit applications
- Utilize tools like Experian Boost®
A 2017 study in Arkansas found that good credit scores lowered insurance costs for 57.4% of drivers. Keeping your credit in check can lead to better insurance deals and more savings over time.
| Credit Score Tier | Premium Increase/Decrease |
|---|---|
| Poor (below 580) | +97% |
| Fair (580-669) | Approximately +32% |
| Good (670-739) | Variable |
| Very Good (740-799) | Up to -15% |
| Exceptional (800+) | Up to -20% |
Consider Usage-Based Insurance
Drivers who join a usage-based insurance (UBI) program can save about $231 a year. Learning how usage-based insurance works can lead to savings. This is because insurers adjust rates based on how you drive.
Telematics technology gives real-time feedback on your driving. It tracks hard-braking, rapid acceleration, and more. This helps insurers offer better rates for safe drivers.
One big plus of how usage-based insurance works is the chance for quick savings. Some insurers give discounts right away. But, driving during peak hours might raise your rates.
There are both good and bad sides to usage-based insurance:
- Pros:
- Potential savings based on actual driving habits
- Immediate enrollment discounts
- Encourages safer driving behaviors
- High satisfaction rates with insurance costs amongst UBI users
- Cons:
- Continuous monitoring may raise privacy concerns
- Potential increased rates for risky behaviors
- Concerns about tracking accuracy
- Savings may be lower than the maximums claimed by insurers
More people are using usage-based insurance, with a 17% increase from 2016 to 2021. Recent data shows 19% of car insurance shoppers are joining.
Using UBI programs can make drivers safer and save money. For example, Progressive’s Snapshot program adjusts rates based on your driving. It saves many customers money, but those who drive riskily might pay more.
Here’s a quick summary of how usage-based insurance works:
| Aspect | Details |
|---|---|
| Potential Savings | Up to 20-30%, average savings of $231/year |
| Behavior Monitoring | Hard-braking, acceleration, speed, distracted driving |
| Enrollment Discount | Available with some insurers |
| Risk Hours | 12 a.m. to 4 a.m. |
| Participation Rate | 17% currently, nearly doubled since 2016 |
| Driver Satisfaction | Higher among UBI participants |
Review and Adjust Your Coverage Regularly
Checking your car insurance coverage often is key to saving money. It’s important to make sure your policy still fits your needs. This way, you can find cheaper car insurance quotes you might have missed.
One big advantage is adjusting your deductible. For example, raising your deductible from $200 to $500 can cut your costs by 15 to 30 percent. Going up to a $1,000 deductible can save even more, up to $635 a year.
Don’t forget about discounts for good credit scores. Insurers often use credit scores to set prices. A good score can lead to big savings. Also, companies offer discounts for those without accidents or moving violations for years.
Here’s a quick comparison of potential discounts for policyholders:
| Discount Criteria | Potential Savings |
|---|---|
| Antitheft Devices | 3-5% |
| Bundling Policies (Auto and Homeowners) | 3-25% |
| College Students Away from Home | Up to 10% |
| Defensive Driving Courses | Up to 10% |
| Good Credit Record | Up to 40% |
| Low Annual Mileage | 5-15% |
| Long-Time Customer | 5-10% |
| High Deductibles | 15-40% |
| Multiple Cars Insured | Up to 20% |
| No Accidents in Three Years | 10-25% |
| Student Drivers with Good Grades | Up to 15% |
To get cheap car insurance quotes, regularly review your policy. Adjust your coverage to match your current situation. This way, you can keep costs low and still have the right protection.
Conclusion
Finding ways to lower car insurance costs is crucial for car owners. By comparing rates from different companies, you can find the best deals. Also, using discounts for safe driving, being part of certain groups, or bundling policies can save a lot of money.
Driving safely is key to lower premiums. Keeping a clean driving record and choosing safe cars like the Honda CR-V or Toyota RAV4 can help. Raising your deductible by $1,000 can save up to 40%, giving you more money each year.
Improving your credit score also lowers insurance rates. Insurance companies often look at your credit when setting rates. Regularly checking and adjusting your coverage is important to avoid paying too much for what you need.
Using usage-based insurance for low-mileage driving can also save money. By following these tips, you can get car insurance that fits your needs and budget. Being informed and proactive helps you save a lot on car insurance.
FAQ
How often should I compare car insurance rates?
You should compare rates from different insurers at least once a year. Or after big life changes. Consumer Reports found that people save $461 a year by doing this.
What kind of discounts can I ask for to lower my premiums?
You can ask for safe driving, multiple policy, and automatic payment discounts. Always check with your insurer to make sure you’re getting all the discounts you’re eligible for. They often change their policies.
How can I make my car insurance premiums cheaper by driving safely?
Keeping a clean driving record can lower your premiums a lot. Insurers give discounts to those with no accidents or tickets.
When should I consider dropping collision and comprehensive coverage?
If your car is old or not worth much, dropping these coverages can save money. This is because they only pay out up to the car’s value. It’s worth considering if your premiums are more than the car’s value.
What car models are generally cheaper to insure?
Mid-size SUVs and cars with good safety ratings, low repair costs, and theft rates are cheaper to insure. It’s smart to look into these factors before buying a car.
How can increasing my deductible save me money on car insurance?
Raising your deductible can lower your premiums. You’ll pay more out-of-pocket for claims. This is good if you don’t make many claims.
Does my credit score affect my car insurance rates?
Yes, a better credit score can lower your insurance rates. Paying bills on time and keeping low balances can improve your score. This can save you money on premiums.
What is usage-based insurance and how does it work?
Usage-based insurance changes rates based on how you drive. Insurers track your driving habits. Safe drivers might get lower rates. But, you must agree to let them monitor your driving.
Why is it important to regularly review and adjust my car insurance coverage?
Reviewing and adjusting your coverage regularly keeps your policy affordable and up-to-date. It can save you a lot of money. Rates and personal situations change over time.
Rocky Horton
Author
