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8 Ways to Save Money on Car Insurance

Updated on September 29, 2017
Michael Kismet profile image

Michael Kismet is a freelance writer and has a passion for finances and true financial freedom.

Auto Insurance Premium

How to lower auto insurance premium
How to lower auto insurance premium | Source

How to Keep Car Insurance Low

If you're a United States citizen, you are required by law to have some form of auto insurance. If you're driving around without insurance, then you're more or less breaking the law. I'm flabbergasted when I meet a driver that has no auto insurance. Also, people who choose their insurance policy based on no prior research whatsoever.

One should treat purchasing car insurance like one would be if they're looking for the best deal, you have to shop around. Insurance rates fluctuate from person to person, but there are some standard rates for certain demographics that will be out of your control. If you're over 70 years of age, or if you're under 30 years of age, or have children, you're going to inevitably be paying more for car insurance.

Aside from somehow improving your questionable driving record overnight, there are reasonable ways to substantially lower your auto insurance premium. The cost of being a responsible driver has only gone up over the years, and I doubt things will change anytime soon. Here are eight ways to receive discounts on your auto insurance.

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#1 If You're Driving Less, You Should be Paying Less

If you're driving less than half an hour a day, or you're just not a daily commuter, many insurance companies will offer you a much better rate. This just makes sense, the less you are on the road, the less of a liability you are to an insurance company, generally speaking. Many drivers today make the mistake of not taking a sufficient amount of time to thoroughly check every section of their policies.

If your goal is to save more money on car insurance, you have to pick a policy that fits your specific needs. For example, you can probably forgo the snow and hail coverage if you live and mainly drive in California. This is how people lose money on their policy when they're paying for unnecessary coverage. So, remember to shop around for the right coverage.

Keep in mind that there are a plethora of auto insurance companies out there, and they're all competing for your business, not the other way around. If you happen to be dealing with an insurance agent, remember to casually let them know that you're still "shopping around". This will subtlety let the agent know not to try to stick you with an overpriced policy, and they'll be more pliable to giving you the best deal within their authority.

#2 Pay for Your Car Insurance Annually

Purchasing your policy a year at a time will save you an appreciable amount of money. Insurance providers will often charge an extra service fee for paying in monthly intervals. While these fees are usually negligible, after twelve months they can add up. Every insurance policy I've ever had was paid annually, or at the very least pay for six-month premiums. However, there are companies that will not include a "service fee" every month, so to reiterate, you'll have to shop around.

How to Reduce Your Car Insurance

purchase auto insurance online
purchase auto insurance online

#3 Bundle Your Insurance for Big Savings

If you have life insurance, renters insurance, homeowners insurance, or even boat insurance, you should be bundling all your insurance into one comprehensive policy from one company. This can save you on all individual policies by as much as 15-20%. That is savings you just can't ignore.

I understand personally it's quite a daunting task to broach the subject with your insurance agent, but if you can be an adult and go through with it, you'll be saving a great deal of money every year on costly insurance premiums. I bundle all three of my policies with one company and it saves me a ton every year.

#4 Garage Parked Car Insurance Discount

If you're accustomed to using your garage space as a makeshift storage unit then you're missing out on some easy savings. There are countless quality insurance companies that will give you a worthwhile discount if you have access to a garage where you can park your car. Studies and common sense proved that a car in a garage is far less likely to be broken into, vandalized, or stolen.

Vehicles parked parallel to sidewalks and even driveways are more susceptible to accidents and incidents. So, make sure to pick a policy that gives a discount for vehicles that are parked in the garage. Less of a liability for the insurance company, the more savings they can pass on to the policyholder.

#5 Car Safety and Security Insurance Discount

If your vehicle comes equipped with many safety features, then you're entitled to great discounts towards your insurance premium. The safer your car is on the road and the more secure it is, the more desirable you become in the eyes of the insurance providers. The following vehicle safety features should count as a deduction from your overall policy cost:

  • A vehicle that has anti-lock brakes.
  • Airbags, the more the merrier the savings.
  • A functional and sufficiently effective car alarm.
  • A car with anti-theft, such as Lo-jack device.
  • A vehicle with the VIN number etched on the glass.
  • Daytime auxiliary headlamps
  • Automatic seat-belts.

Auto Insurance Tips

how to save money on your car insurance
how to save money on your car insurance

#6 Good Student Car Insurance Discount

If you're a student with an immaculate GPA, insurers will view you under a more favorable light. Obviously because if you're academically proficient and productive, insurance companies will regard you as a conscientious and highly responsible driver as well, a logical and safe assumption. It's just a no-brainer, the more adept and responsible a driver seems, the safer they are as an investment for insuring.

#7 Higher Deductible Lower Premium Car Insurance

This option, in my opinion, should only be considered if you're an incredibly safe and intuitive driver, with an unblemished safety record. When you opt for a higher deductible in your policy, then the lower your premium will end up costing you. However, if you get into unforeseen accidents, you'll have to shell out a little more for your deductible.

So, in many ways, you can view this as a gamble. I myself, am one of the safest drivers I know, so I go with a high deductible, but I saved a good amount from my insurance premiums cause I am not very accident-prone. Knock on wood!

How to Lower Car Insurance Payments

#8 Safe Driver Insurance Discounts

The one factor I can put my entire weight behind when it comes to saving more money on auto insurance is simply to become a better and safer driver. Nothing looks better to an insurance rep than a spotless driving record. This means not excessively breaking the speed limit, avoid running red lights and stop signs, signal religiously when merging.

It's not overly difficult to be a safer driver, just learn to be more attentive to the road and everyone around sharing it. When I was younger I had the most horrible driving record imaginable. Yet, for the last seven years, I haven't been in one accident, no speeding ticket, no parking violation, haven't been pulled over, never had a seat-belt ticket, any cellphone-while-driving ticket, I've maintained a spotless record.

Today, I pay less than $50 dollars every month for my policy. If I can facilitate such a dramatic change, I believe anyone can. I hope this article has been of some help, please feel free to share this article with friends and your social network.

© 2014 Michael Kismet

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    • Happymommy2520 profile image

      Amy 10 months ago from East Coast

      I like the point you made about higher deductibles. Over the long hall you are saving money. The money you aren't paying for the low deductibles can grow interest and can cover anything just in case an accident occurs.