How to Cut Costs on Car Insurance

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Last Updated on March 21, 2022 by John Robinson

Car insurance is essential in owning a vehicle. In most states, it is mandatory by law to buy at least the minimum auto liability coverage. Insurance gives you a financial safety net if you get into an accident. Your insurance will pay for repairs, liabilities, or your medical bills.

But expensive premiums may already strain your pocket. If the point of insurance is to give you financial protection, then paying excessive fees might defeat the purpose. To lessen your costs, shop around for the cheapest car insurance. After that, consider the following practical guidelines to increase your savings.

Be a Safe Driver

Being a safe driver will lower your insurance costs. By driving safely, you avoid speeding tickets and traffic violations that increase your premiums. It also means that you have less risk of collisions and other accidents, leading to fewer claims. Fewer and smaller claims on your history lower the cost of your insurance.

In general, insurance companies frown upon claims for accidents that are avoidable. Driving aggressively increases the chances of accidents, which means insurance companies see you as a risk. They compensate for the higher risk by increasing your premiums.

You may even qualify for a safe-driver discount. Keep this in mind as you shop around for the cheapest car insurance. Some providers offer better good-driver discounts, which means lower premiums than the average.

Get a Cheaper and Safer Car

That shiny luxury car might look tempting, but it comes with a cost. Expensive vehicles lead to more expensive insurance rates. Monthly premiums on luxury car insurance are double that of the average vehicle.

Even if you drive safely, the car itself might be increasing your insurance costs. Your provider is looking at several factors to compute your premium. These include the car’s price and its safety rating.

To get the cheapest auto insurance, get a lower-cost car with a high safety rating. Some companies may give you further discounts for hybrids or alternative fuels. Low-cost, safe, and green cars mean maximum savings.

Avail of Multi-car Discounts and Bundling

It’s more expensive to have different insurance providers for multiple vehicles. Insurers will give you a discount if you buy their products in bulk. You can drive your premiums lower if your household brings your business to a single company. 

Usually, multi-car insurance requires that the drivers are related and live in the same house. If you have teenage drivers, they may also qualify for a good student discount if they do well in school.

To further save on costs, you can bundle your car insurance with other policies. Depending on the provider, you can have up to 20% discount if you buy both your auto and home insurance from the same company.

Drive Less

Insurance companies offer lower monthly costs if you have lower mileage. The less you drive your car, the less risk of getting into an accident, leading to lower premiums. Consider having two or three days using mass transit per week. If there is no public transit in your vicinity, you can carpool to your work to lower your mileage.

Your work might also let you avail of a work-from-home or hybrid setup. You can let your provider know of your work arrangement. See if they can offer a low-mileage discount on your policy. The best part of this is you will also save on fuel and maintenance costs.

Increase Your Deductible, Lower Your Coverage

Your policy’s deductible is how much you must pay before the insurance company shells out. It sounds scary to lower your financial safety net. You will have to pay more if you do get into a major accident. 

But consider the changes you are also making in your driving. You drive less and more carefully, which means you are less at risk for accidents. It would make more sense to increase your savings instead of paying higher car insurance costs.

You might also consider lowering your coverage. If your car is less than 10 years old, you would still want full coverage. This includes collision, liability, and comprehensive coverage. Anything other than that might be excessive, and you might not need it.

If you have an old car, you might want to check if the collision and comprehensive coverage is even worth paying. Your premiums might not be worth the value of your vehicle. If the cost of potential repairs is worth more than the value of the car, your insurer will just total it when it gets into an accident.

Better Driving, More Savings

Auto insurance is an important safety net. But the better safety net comes from being a better vehicle owner and driver. 

Choose a car with a high safety rating and maintain it well. Drive safely and you lower the chances of getting into accidents. Driving less and availing of mass transportation also lessens the risk of collision. Combine all these and you’ll have the cheapest auto insurance possible.

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