To help you save money, here are some ways to reduce your car insurance premiums. Try one, two, or the whole list to see how much you could save.
Consider Seasonal Driving Habits
Are your insurance needs the same year-round, or do you drive less in certain seasons? Do you have a vehicle you only drive in the summer, like a convertible or a motorcycle? Use these questions as a starting point to think about how your driving changes during the course of a year. Then, ask your insurance agent about any seasonal changes you can make to your policy to save money. For instance, if you put a vehicle in storage all winter, you might be able to drop its liability and collision coverage to save money. As long as you leave comprehensive coverage on the vehicle, it’ll still be covered if it’s stolen or damaged in a fire.
Bundle Multiple Insurance Products
Many insurance companies offer a discount if you purchase multiple products, such as home and auto insurance; this process is known as “bundling.” For example, you can save 10% when bundling auto and home insurance with USAA and up to 25% with Allstate. You may also be eligible for a multi-car discount if you insure multiple vehicles on the same policy. GEICO advertises multi-vehicle savings of up to 25%. If you have multiple policies with an insurer, ask your agent what would happen to your rate if you combined them.
Tell Your Insurer If You Started Working From Home
When stay-at-home orders began popping up around the country in early 2020, many people started driving less—and some insurance companies offered car insurance discounts. If you’ve been working from home or traveling less over the past year, you’re probably putting fewer miles on your car. Since your annual mileage is used to determine your car insurance premiums, you may be able to save money by letting your insurance company know you’re driving less than you anticipated.
Raise Your Deductible
Your deductible is the amount of money you’re responsible for paying on a covered claim. It’s often referred to as the amount you’ll pay out of pocket, although your insurer will usually just deduct it from your payout. For example, if you have a $500 deductible and an approved claim for $1,500 worth of damage, your insurer will send you a check for $1,000. Typically, the higher your deductible, the lower your premium. For instance, Nationwide estimates that if you raise your deductible from $200 to $1,000, you may save about 40% on your insurance premiums.
Make Fewer (and Larger) Payments
It might sound intimidating to pay such a large amount at once, but many insurance companies offer a discount for paying your premium in full. You may also be eligible for discounts if you sign up for autopayments instead of manually paying your bill each month.
Keep Rates in Mind While Car Shopping
Premiums vary drastically based on the age and type of vehicle you drive. The make and model of your car play a role in pricing, with more expensive and larger vehicles often resulting in higher premiums. If you’re in the market for a new (or new to you) vehicle, keep these factors in mind while you shop. It’s worth requesting a few quotes for the type of vehicle you’re considering before you make the purchase so you have an idea of what you’ll pay to insure your new wheels. It’s also a good idea to consider features that might qualify you for additional discounts:
New car discountHybrid/electric vehicle discountSafety features discount, such as for an anti-theft device or anti-lock brakes
Use Your Good Driving Record, Military Status, and More
Your lifestyle and driving record can also affect your car insurance. Talk to your insurance agent to see if you qualify for car insurance discounts, such as:
Good driver discount: A great way to save on your premium is to be a good driver. If you didn’t have a moving violation in the past three or five years, you may be eligible for a good driver discount. Military discount: If you’ve served or are currently serving in the military, you might pay a little less for car insurance. Ask about a military discount, even if you don’t see one advertised. Good student discount: Teens can be expensive to insure, but full-time high school or college students with at least a B average are typically eligible for a good student discount.
Take a Driving Course
Young or inexperienced drivers may be able to save on car insurance by seeking out professional training. For example, Travelers offers a discount of up to 8% to young drivers who can prove they’ve completed an approved driver training course. If it’s been a while since your last driver’s education course, taking a defensive driver course could also save you money on your auto policy. In many states, you must be over the age of 50 or 55, and savings vary.
Shop Around
Premiums vary from company to company, so make sure you shop around. Get quotes from several different insurers and see which one offers the lowest rate.
