Car insurance is an expense we all have to deal with. However, did you know there are a few simple steps you can take to ensure you’re getting the best rates? RSG Contributor Tyler Philbrook is going to tell you what you can do to lower your car insurance rates.
Quick summary:
- Shop around for the best rates in your area using an insurance comparison tool
- Simply make a phone call to your current insurance provider to see what discounts they offer
- Combine home, life and car insurance to get the best rates from your insurance company
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When I first got married I waited several months before calling my car insurance and letting them know. What a huge mistake that was. My insurance went from nearly $300 a month to $150.
You read that right, my insurance was cut almost in half simply by getting married. This led me to think: “What else would cut my insurance cost?”
No one wants to pay more than they have to for anything and car insurance is no exception. Luckily, it is one of those large expenses we can usually cut down with a bit of work.
The typical car insurance payment in the United States is $1,427 a year or $119 a month. Regardless if you pay more or less than that, at least once a year you should see about reducing your car insurance cost.
How to Lower Your Car Insurance Costs
Once a year, my wife and I look at different insurances to see if what we are paying is still the best insurance rate. First, we call our current insurance and see if there is anything they can do to lower it.
Drive Safely
When insurance companies give you a quote, a large portion of the price is based on your driving history. If you don’t have tickets or accidents on your record, you’ll likely get lower rates.
While driving, make sure to obey the traffic laws, don’t speed, be a defensive driver, and stay safe. By doing so, you’re far less likely to get speeding tickets or worse, get into an accident. Of course, there is no 100% way to avoid some accidents, but driving safely is the best chance we have.
In an effort to learn to be a safer driver, you could take a defensive driving course. After completing the course, submit your certificate of completion with your insurance company to see a possible discount.
Reduce How Many Miles You Drive
As a rideshare driver, this may be impossible as driving and putting miles on our car is also how we make money. However, if you drive fewer miles, insurance companies tend to charge less because you are less of a risk in their minds.
Even as a rideshare driver, there are ways to drive less. For instance, rather than drive passengers, you could deliver food or even groceries. Because of the fast delivery times for each of these, they don’t have you drive too far which means more money per mile, and in this instance possibly a reduced insurance cost.
Find the best food delivery services in your city.
Move
Depending on which state—and even what city—you live in, your insurance rate could change drastically.
Though it’s very unlikely that you’re going to move just to save money on your insurance, it is definitely something you can and should take into consideration if a move is on the horizon. Maybe you’re moving for work, to save money, or you just need a change. Whatever the reason, looking at the insurance rates where you’re moving can help you pick which state or city you want to live in.
When Managing Editor Melissa Berry moved states, she reduced her car insurance premium by $700 – yes, without changing her deductible or coverage amounts. Moving states is a big move, one you wouldn’t do just to save on car insurance, but it’s something to keep in mind!
Understand Your State Minimums
If you don’t want the most robust insurance out there, consider lowering the coverage amounts on your vehicle. Every state has minimum requirements for coverage. It’s possible that you’re covering yourself for 2 or 3 times the amount that the state requires.
If you don’t feel like you need $100,000 in liability coverage, check out your state’s minimum requirements and adjust from there.
Keep in mind, if the cost of the accident ends up being more than what you have coverage for, the other party may end up trying to sue you. So, tread lightly when it comes to changing your coverage levels.
Change Your Deductible
Put simply, a deductible is how much money you have to pay before the insurance covers the bill. So, if you’re in an accident and the cost to repair the vehicle is $10,000, and your deductible is $500, then the insurance will pay $9,500 and you’ll pay the first $500.
But, if you increase that deductible to $1,000, your insurance rate will go down saving you money in the long run. Of course, this would mean that you would want to have money set aside in an emergency fund in case you do get in an accident in order to cover the higher deductible.
If you’re a safe driver, you’ll likely go a long time before needing to use your insurance, so you’ll save more money than you’d end up paying if you had the lower deductible.
Buy a Different Car
A general rule of thumb is the more expensive the car, the more insurance will cost to cover it. Even more so is the less safe the car, the more expensive the insurance.
We’re not encouraging you to go buy a new car to save money on car insurance. However, when the time comes to purchase your next vehicle, look for ones that have high safety ratings. When you’re considering new cars, you can call your insurance company to get quotes on coverage for each model you’re considering to make an informed decision.
You may also want to consider an electric vehicle, especially in light of Uber and Lyft’s commitments to transitioning to electric vehicles. Take a look at the best electric vehicles for drivers.
Also, check with your insurance company to see which safety features will help lower your insurance costs. Perhaps the car with the lane assist will save you more than the car without it.
Combine Home and Auto
If you’re like most people, you need more than just auto insurance. There’s life insurance, homeowners insurance, renters insurance, etc.
If you need more than one insurance, call your insurance company and ask about combining policies. If you do, you’ll get multiple policy discounts that can save you hundreds of dollars.
Safe Driving Program
When my wife and I switched to State Farm about a year ago, they offered us a program called Drive Safe and Save. We installed a small device in each of our cars and connected them to our phones, and within a few months, we received a savings of over $100 on our policy.
Allstate has a similar incentive program known as Drivewise, which saves you money and sends you cash back for safe driving habits. Find a full list of insurance agents familiar with rideshare and delivery here.
Many companies also have similar programs, so call and ask. Set it up, and of course, drive safe.
Keep a Higher Credit Score
Deacon Hayes with Clark Howard suggests: If you have a low credit score, you could be considered higher risk to your car insurance company. Fixing your credit score could help you save money on insurance in the long run while also opening yourself up to better interest rates on your car loan.
Pay Annually or Semi-Annually
More often than not, it costs more to pay your car insurance month to month. If you’re able to, consider paying 6 months at a time or the full year up front in order to save more overall.
Managing Editor Melissa Berry said she saves just under $100 every six months by paying semi-annually, which adds up to ~$200 every year. It adds up!
Summary
Everyone loves to save money without sacrificing coverage. You can save possibly hundreds a year on your car insurance by simply shopping around using a comparison tool to find the best rates in your area for the exact coverage you already have.
Even without shopping around, you can simply pick up the phone and call your current insurance company and ask what they can do to lower the cost of your insurance. Ask them what discounts they have that you qualify for.
Things that you don’t think could save you money just might. One time when I called asking for discounts, my insurance company asked about my background in education. Because I had graduated from college, I was able to get a discount. All it takes is a quick phone call and you could be saving money instantly.
FAQ
How long does it take to lower your car insurance?
Changing your car insurance to lower your cost typically happens automatically. When Managing Editor Melissa Berry moved, she automatically received a discount on her upcoming premium renewal.
Can you haggle on car insurance?
Part of the reason to get quotes from other companies is to be able to say to your current company that you can get a better price somewhere else. Odds are they will try to keep you as a customer, and thus meet or even beat the price you’re going to get with the new company.
At what age does car insurance get cheaper?
You’ll notice your premiums start going down at age 20, but significant drops will be after 25. By the time you hit 30, it should be far less than when you first got your insurance.
Do car insurance costs decrease every year?
Costs go up every year on everything. You pay more today for a gallon of milk than 20 years ago. However, even though car insurance will go up every year due to inflation, it could go down for you based on your previous year’s driving record.
Are you paying way too much on your car insurance? What steps listed above will you try out today to get better rates? Tell us about your success in saving below!
– Tyler @ RSG
