Car insurance will cost you somewhere between a few hundred and a few thousand dollars a year, depending on the number of cars you have to insure and variables related to your policy. Fortunately, it’s possible to reduce your payments in almost any situation—and the tactics you need to accomplish these savings are simple and straightforward.
Tips for Reducing Your Car Insurance Rates
Try using these strategies to reduce your monthly car insurance rates:
- Shop around. Before you commit to any policy, take the time to shop around to different providers. Even with all the variables the same, a provider may be able to offer you a lower rate based on their unique underwriting calculations. Make sure you get at least three different quotes, and if you have more time, search for even more information; it only takes a few minutes to get each quote, and you’ll be glad you have the information.
- Find a provider that offers discounts. Look for a car insurance provider that offers regular discounts to its customers. For example, King Price Insurance offers a car insurance rate that gradually declines, encouraging customer retention and rewarding its customers in the process.
- Reduce your mileage. Car insurance rates are usually calculated based on total risk, and your risk will always increase in proportion to the number of miles you drive. If you want to save money on insurance, consider reducing your total driving miles, by working from home, moving closer to work, taking public transportation, or going on fewer road trips.
- Drive safely (and consistently). This method takes a long time to kick in, so don’t expect an immediate discount from using it. Companies like to reward customers who drive safely, while increasing rates for customers who get speeding tickets, get in accidents, or otherwise drive unsafely. Take your time while driving, stay safe, and eventually, your rates will drop. Conversely, almost any traffic violation or accident could increase your rates.
- Invest in a different car. Your rates may also change based on what type of car you have. More valuable cars cost more to insure for obvious reasons, while sports cars and cars vulnerable to theft cost more to insure because they represent higher risks for the insurance company. Consider getting an older, less valuable, safer vehicle to insure.
- Raise your deductible. It may not be the best option for your situation, but studies show that increasing your deductible from $500 to $1,000 can save you 9 percent a month. Consider increasing your deductible if you want to save on your monthly payments.
- Reduce your total coverage. Again, this option isn’t right for everyone, but you can get a substantial monthly discount if you reduce your total coverage. It’s a good idea to stay a notch or two above minimum required insurance, but you don’t need the top-of-the-line policy.
- Get multiple policies from the same provider. Most insurance companies offer many types of insurance, and reward customers who get all their insurance from the same place. Try to get your home insurance, life insurance, renter’s insurance, or any other insurance policies you need from the same place. That way, you can save on all these policies simultaneously.
- Stabilize your credit score. Consumer Reports verifies that drivers with good credit scores tend to pay less for car insurance than those with fair or poor credit scores. If your credit score is less than optimal, spend some time paying off your credit card debt and making on-time payments consistently for all your accounts. This is another measure that takes time before it takes effect.
- Pay semi-annually. Most providers offer you the option of paying your car insurance premiums monthly, or semi-annually. If you choose to pay semi-annually, you’ll pay more all at once, but your monthly rate will go down as a result.
Reevaluating Your Needs
While many of these strategies only require a one-time change, it’s in your best interest to make regular changes to your car insurance. Once a year, take the time to reevaluate your needs; can you get by with a smaller policy or one with a higher deductible? Do you have a different car or new driving habits? If so, it pays to contact your insurance provider or shop around to others. You never know when a new discount could save you even more.