Insurance » Auto Insurance » 10 Great Ways to Cut Auto Insurance Costs
Advertiser Disclosure

This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.

Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.

10 Great Ways to Cut Auto Insurance Costs

Different companies have different policies, but there are some things that you can do to make sure you’re getting what you need and not paying a fortune.
10 Great Ways to Cut Auto Insurance Costs

When it comes to handling your car insurance it can seem a bit overwhelming. But if you don’t know what you’re doing you could end up with some serious problems. That’s because the wrong car insurance can cost you a fortune.

Here are 10 tips that can save you money when you buy car insurance:

1. Shop Around

One of the first things you need to do in order to save money when you’re buying car insurance is to shop around.

Don’t just get a quote from one company and assume that’s the best you’re going to get. Instead, look at several different insurance companies and get a quote from each.

You may have a preference for which insurance company you think you want to work with because of commercials that you’ve seen. You may have seen several commercials that claim they offer the lowest rate. In fact, insurance companies go to a lot of trouble to convince you that the rates they’re offering are the lowest. But the truth is that different people are going to pay different rates for car insurance. Even with the same company and the same policy it could cost something different. That means there’s no one company that’s lowest for everyone.

One problem you could run into when you’re trying to shop around, however, is figuring out how to compare the different policies that are available. You want to make sure that you’re looking at the same coverage, because not every policy is going to be the same. Just because one looks like a better deal doesn’t mean that it actually is.

One way that you can improve your results and cut down on the amount of time that you have to spend on the process is to use an online comparison service. All you have to do is put in the information you have about yourself and your vehicles and check out what offers you get. You can even make changes to the type of coverage that you want or things like the amount of mileage that you drive to get the most accurate quotes. This is also going to help you compare exactly the same coverage from different places.

Even if you’ve always been happy with the coverage that you had, it’s a good idea to get a few quotes from different places before you accept one.

Or before you accept a renewal quote. You may be able to get a better deal with your chosen company.

2. Cut Coverage on Old Vehicles

The older your vehicle is the less likely you are to file a claim for it because the cost of repairs is likely not worth the deductible (and potential increase to your insurance). That means you don’t actually need the same amount of coverage that you might have had before.

You could likely reduce your coverage so that it only covers the basics. To figure out if your vehicle could have less coverage take a look at how much it’s worth and then divide by 8. If your premium costs more than that you’re paying too much per year.

3. Know Your Policy

When it comes to picking out your policy you have to know what it actually says. You have to understand all of those difficult and technical terms that are scattered throughout. Sure, it’s going to be difficult. But you absolutely need to know what they say. So, make sure you talk to someone to find out.

  • Who is covered
  • What is covered
  • What is excluded from coverage
  • What limitations apply to coverage
  • When coverage starts
  • When coverage ends
  • How much coverage are you getting
  • How much coverage costs
  • How to report a loss or claim

Talking with your insurance professional or the person who helps you to sign up for the policy is going to be the most important part of the process. You’ll be able to learn more about what the policy covers and doesn’t and what you may want or not want to add on. You’ll be able to get a good explanation for everything you don’t understand on your own.

4. Drive Less

You can absolutely reduce your insurance premiums by driving your vehicle less. Your insurance company is going to ask you how much you drive including your daily commute. If you drive less than the average then you’re going to be on track to save money. Make sure you specify that to your insurance company.

If you are interested in paying even lower insurance because of the low number of miles that you drive you can check out Metromile and other insurance companies that charge you based on the specific miles you drive. You pay less if you’re not covering all that distance.

If you’re in the market for a new job or a new house, look for something with a shorter commute. You’ll be able to save a whole lot of money because you’re cutting down mileage. You may even be able to cut down further by working from home, thus cutting out the commute entirely.

5. Ask for Discounts

You may think that the insurance company will offer you discounts if you qualify for them but that’s absolutely not the case. You won’t get anything for free. So, make sure you ask.

You should definitely ask if you’re new to the insurance company but if you’ve been there a while check to make sure of any discounts you may not know about.

  • Student discounts
  • New driver discounts (with training course)
  • Multiple vehicle discounts
  • Defensive driving course discounts
  • Online paperwork discounts
  • Clean driving record discounts
  • Affinity group discounts
  • Pre-pay discounts

6. Take a Course on Defensive Driving

Those who don’t have a great driving record can actually help themselves by taking a defensive driving course. Check with your insurance company to see if they’ll give you a discount if you take and pass one of these classes and remember it needs to be done recently.

You do want to make sure that you’re paying for something that’s going to be worth it though. If the class is cost prohibitive that’s definitely not going to help you in the long run. You’ll end up spending more on the class than you will save from your insurance and that’s not going to be a good idea.

7. Keep Your Credit Score Up

Did you know that your credit score can actually affect the payments that you’re making it? Well it can. And if you can keep your credit score looking good you’re going to improve your premium.

Ask your insurance company to make sure they’re using your credit score and then work on increasing your score as best you can. You want to make sure that you’re paying bills on time and keeping your debts low, for example, to make sure your premium is impacted positively.

8. Protect Your Vehicle

You can actually pay less for your premiums if you find ways to protect your vehicle. Things like putting in a car alarm or a tracking device can help because if your vehicle is ever lost or stolen it’s easier to find. That means your insurance company is less likely to have to do anything about it.

Talk with your insurance company to find out what you need to do.

9. Bundle Your Policies

If you buy your homeowner's insurance and your auto insurance from the same company chances are you’re going to have no problem getting a discount.

Plus, it’s going to be a whole lot easier for you to keep track of things. That’s definitely going to be a win-win situation for you.

10. Increase Your Deductible

The deductible is how much you’re on the hook for if something happens to your vehicle and you need to file a claim. The larger the deductible you agree to pay the lower your premiums are going to be.

Just keep in mind that a higher deductible means that if something happens you’re going to have to come up with that money all at one time instead of spread over the months like your premium.