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10 Fantastic Ways to Decrease Your Auto Insurance Payments

Updated on March 9, 2015
5 stars for 10 Fantastic Ways to Decrease Auto Insurance Payments

Auto insurance payments can be a hassle to many individuals. If you are already paying for health insurance, life insurance and property insurance like many individuals, you may be interested in ways to decrease your auto insurance payments.

There are several ways to decrease your auto insurance payments. Here you can read about ten different ways to reduce your auto insurance payments.

1. Get Your Driver’s License Early

While some US States permit you get your license at 16 years of age, other States (i.e. New York) require you to be at least seventeen years of age to begin driving a car by yourself. Getting you license early may not benefit your insurance rates at a younger age. However, by the time you reach around 27 years old, you will be presumed as driving for a decade. Your “experience” in driving will positively impact (decrease) the rate of your car insurance.


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2. Be a Careful Driver

Even if you received your license at an early age, you must still be a careful driver. Refrain from obtaining traffic point violations on your driving record. For example, I recall driving in a small town for the second time after regularly driving in a big city, where the traffic lights were regulated throughout the day. For some reason the small town had its red, yellow and green lights blinking in the night. It baffled me. I was only aware of yellow blinking lights. As I approached a red blinking light, I didn’t have a clue of what to do. I had reviewed my driver's manual only a long 18 years previously by then. I began to panic. I immediately tried indexing my memories of traffic light lessons from driver’s education in high school. When that failed, I simply glanced over at the white pickup truck also approaching the intersection in the opposite lane, to see what he did. He slowed down at the light and kept driving. Got it! I, similarly, decided to slow down at the light and keep moving – to my own demise.

I soon saw the beaming lights and heard the jarring sounds of the police car behind me. I pulled over and immediately pulled out my registration card, insurance card and license. After inquiring of my violation, the cop informed me that I was supposed to make a full stop at the red blinking traffic light. After attesting that I was not from the local town and unfamiliar with its traffic procedures, I still drove away with my first moving violation. Of course I was upset and offended, but the law is the law.

Be certain to monitor your driving, especially in foreign places. Driving in foreign countries, such as Italy or India, can be quite difficult, as there are minimal driving regulations in those countries at all. Always get car rental insurance in foreign countries. Moving violations on your driving record can follow you across seas as well.

3. Take a Defensive Driving Course

Contact any driving school to sign up for a defensive driving course. Taking a defensive driving course will automatically reduce your auto insurance rates. Defensive driving courses allow you to practice methods of securing your car as well as others in the event of possible or actual collisions. Defensive driving courses are regular courses in which you are tested at the end of the course on the content and practices learned. Upon successful completion of the course, you will receive a certificate that can be presented to your auto insurance company.

4. Drive Less

For most people, driving less may be difficult to accomplish. It may be important to drop off the kids, drive to work, pick up groceries or dry cleaning, etc. with your car. However, there are ways to complete these tasks while driving less with your car.

If your kids attend school close to home, consider walking to pick them up on warmer days. You can have quality time with your kids on the walk home from school. Smaller kids may need a stroller for the commute by foot. If you are driving to work, consider carpooling with local coworkers in the neighborhood, tipping for gas every now and again. Shopping with friends is always fun. Have your friends pick you up for a day out shopping. Yet still be sure there is enough room for all your new merchandise. Groceries and drying cleaning can always be delivered. These are only a few ways to drive less. Using the change in your car mileage from one year to the next will prove to your insurance company that you do not drive as much, which will reduce your insurance policy.

5. Get Higher College Degrees

Auto insurance companies tend to conduct studies on the demographics of safe drivers. One significant correlation or relationship between the demographics of drivers and their safety in driving is their higher level of education received. There is a significant statistical correlation between drivers with higher education levels and excellent driving records (less infractions or driving violations). Therefore, auto insurance companies use this statistic as a justification to decrease the insurance rates of drivers that have higher education levels.

6. Join Societies, Associations and Club Memberships

Certain societies, associations and club memberships tend to offer benefits to their members by hosting group insurance policies. Certain college sororities and fraternities, such as Kappa Delta sorority, allocate a portion of their members’ payments for various types of member benefits. Some credit card memberships similarly provide these benefits, such as American Express, Diner’s Club or Discover. Auto insurance companies will automatically reduce your insurance rates if you were a member of any of these groups or organizations.

7. Find the Right Employer

Similar to societies, associations and club memberships, the employees of many companies and organizations receive discounts when signing up for car insurance by various auto insurance companies. Individuals at companies such as Purdue University and UC Davis Health Systems, receive auto insurance discounts based on their place of employment. The length of the individual’s employment may likewise contribute to decreased car insurance rates. Soldiers and veterans also receive auto insurance discounts. Federal and States workers tend to receive reductions in their insurance as well.

8. Increase Your Credit Score

Your credit score plays a large role in the rate of insurance provided to you by the auto insurance company. If your credit score (or FICO score) is low, then your insurance rate will be higher. Insurance companies associate (correlate) an individual’s poor credit with failure to pay insurance effectively, as well as, poor driving records. Errors on your credit score may contribute to poor credit scores, causing you to receive higher car insurance rates than necessary. Take the time to review and repair your credit report with all three credit reporting bureaus: Experian, Transunion, and Equifax. Higher credit scores tend to receive the lowest possible car insurance rates.

9. Use 4-Payment or 2-Payment Plans

If the option is available to you, which is usually the case, consider opting to pay your premiums 4 times per year or 2 times per year. Auto insurance companies appreciate receiving as much of their payments as immediately and simple as possible. When you pay your car insurance premiums in bulk, such as every quarter per year, many auto insurance companies tend to reduce your premiums altogether. You then end up much less than if you paid you premiums on a monthly payment schedule. Consider it a ‘thank you’ from the auto insurance company.

Did you know that 15 Minutes Can Save You 15% or More on Car Insurance?

10. Move to the Suburbs or the Country

Believe it or not, but residents of the suburbs and especially outlying country regions pay much less in auto insurance than everyone else. While individuals who live in suburban towns and villages may see a slight reduction in insurance rates, relocation to the country convey huge discounts. For example, when someone I know relocated out of the city to the suburbs, total car insurance premium actually decreased by 50%. For two cars, the decrease in auto insurance rates was exceptional. Auto insurance companies are aware that in more densely-populated areas, such as urban cities, there is an increased likelihood of accidents and collisions. Therefore, auto insurance rates for city dwellers are significantly higher than the rates of individuals that live in the suburbs or the country.

Overall, auto insurance companies do aim to reward and encourage good driving records by individuals, young or old, all over the country. Insurance rates follow the theories supporting risk-reward relationships: If the individual poses a greater risk for the auto insurance company, then the reward to the individual is less. However, if individuals pose a lesser risk for the auto insurance company needing to cover claims, then the rewards to those drivers will be much higher. The rewards are usually in the form of reduced car insurance premiums and payments.

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    • Larry Rankin profile image

      Larry Rankin 

      3 years ago from Oklahoma

      These tips helped. Thanks.

    • Miss Info profile imageAUTHOR

      S T Guy 

      3 years ago from New York City

      Thanks for the post Marija! Insurance (general liability coverage) is required for all drivers in the US.

    • profile image


      3 years ago

      I believe my plan from prgovessire runs in 6 month increments.Just get a plan where you pay monthly, and cancel it when you will no longer use it.BTW a lot of people do it but in most states you can get in a LOT of legal trouble if you are caught even lose your license. Even if you aren't required by the state to have insurance, if you do get in an accident the other person could sue you for damages. So your parents are doing you a favor!

    • Miss Info profile imageAUTHOR

      S T Guy 

      4 years ago from New York City

      Thanks cecileportilla! Lowered premiums are always a financial benefit for drivers anywhere.

    • cecileportilla profile image

      Cecile Portilla 

      4 years ago from West Orange, New Jersey

      Good suggestions especially for younger driver who can't afford to pay high premiums.


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