Auto insurance is one of those necessary expenses that can easily slip under the radar, but it also tends to feel like a hefty bill. Many drivers pay hundreds, sometimes even thousands, of dollars each year just to keep their vehicles insured.

However, the truth is that you don’t have to settle for paying more than you need to. There are plenty of ways to lower your auto insurance premiums without sacrificing coverage.

In this guide, I’m going to walk you through some of the best and simplest ways to save money on your auto insurance, all while ensuring you’re still properly covered on the road.

Why It’s Important to Save Money on Auto Insurance

Auto insurance is a must-have for every driver, but that doesn’t mean you need to break the bank. The average cost of car insurance in the U.S. is around $1,400 per year, but your premium can vary widely depending on several factors, including where you live, your driving history, the type of car you drive, and even your credit score.

That’s a lot of money to pay out year after year, and that’s exactly why it’s worth taking a closer look at ways to reduce your premium.

The good news is, with a bit of research and smart decision-making, it’s possible to lower your auto insurance costs without compromising your coverage.

1. Shop Around and Compare Quotes

First things first: You can’t expect to save money on auto insurance if you aren’t actively comparing prices.

Every insurance company uses its formula to determine your premium, which means that your rates could vary dramatically from one insurer to the next.

Even though it can be a bit time-consuming, getting multiple quotes is one of the best ways to find cheaper options.

The easiest way to do this is to use comparison websites like The Zebra or Gabi, which let you compare quotes from several different insurers with just a few clicks.

These platforms can save you a ton of time and effort, helping you find the best deal for your specific needs.

2. Increase Your Deductible

Your deductible is the amount of money you pay out of pocket before your insurance kicks in when you file a claim.

By choosing a higher deductible, you’re essentially agreeing to pay more upfront if something happens to your car. But in exchange, your monthly premium will usually drop.

For example, if you increase your deductible from $500 to $1,000, you could lower your premium by 10-20%.

This can be a great way to save money if you’re a safe driver who doesn’t expect to make a lot of claims. Just be sure you can comfortably cover the higher deductible if an accident occurs.

3. Bundle Your Policies

If you have more than one insurance policy—such as home or renters insurance—consider bundling them with the same insurer.

Many companies offer significant discounts for bundling multiple policies together. You could save anywhere from 5% to 25%, depending on the insurer.

Not only does bundling your auto insurance with other policies save you money, but it also makes managing your policies much easier, as everything is handled by one provider.

4. Take Advantage of Discounts

Insurance companies offer a variety of discounts that you may be eligible for, but they’re not always automatically applied. It’s important to ask your insurer about available discounts and see if you qualify for any of these:

• Safe driver discounts: If you’ve been accident-free for a few years, many companies will offer you a discount.

• Good student discounts: If you’re a student with good grades, you may be able to score a lower rate.

• Low-mileage discounts: If you don’t drive a lot, some companies will reward you with lower rates.

• Military or alumni discounts: Many insurers offer discounts for military members or graduates from certain schools.

• Vehicle safety features: If your car is equipped with safety features like anti-theft systems, airbags, or automatic braking, you may be able to get a discount.

5. Maintain a Good Credit Score

Believe it or not, your credit score can affect your auto insurance rates. Insurers use credit scores to determine how likely you are to file a claim, with those who have higher scores generally paying less for coverage. A good credit score can help you unlock lower premiums.

To improve your credit score, make sure to pay your bills on time, keep your credit utilization low, and monitor your credit regularly.

If your credit score improves over time, you might be able to call your insurer and negotiate a better rate.

6. Drive a Car That’s Cheaper to Insure

The type of car you drive plays a big role in how much you’ll pay for insurance. Sports cars and luxury vehicles are generally more expensive to insure because they’re more costly to repair or replace.

On the other hand, smaller, less expensive cars or those with good safety records tend to have lower premiums.

If you’re in the market for a new car, it’s worth considering the cost of insurance before making a purchase. You can check the Insurance Institute for Highway Safety (IIHS) or the Highway Loss Data Institute (HLDI) to see which vehicles are cheaper to insure.

7. Review Your Coverage Regularly

Your insurance needs may change over time, so it’s a good idea to review your coverage every year or after significant life changes, such as moving to a new area or getting a new job.

If you’re driving an older car, you might not need as much coverage, and you can lower your premium by dropping optional coverages like collision or comprehensive insurance.

On the flip side, if your circumstances have changed and you now need more coverage, you can always increase it.

Regularly reviewing your coverage ensures that you’re paying for exactly what you need—nothing more, nothing less.

8. Consider Pay-Per-Mile Insurance

For those who don’t drive much, pay-per-mile insurance could be a great option. This type of insurance charges you based on how many miles you drive, so it’s perfect if you’re not on the road every day.

Companies like Metromile specialize in this kind of policy, which could save you money if you’re a low-mileage driver.

9. Look for Telematics Programs

Telematics programs are becoming more common in the insurance world. These programs track your driving behaviour using a mobile app or a device installed in your car.

If you’re a safe driver, you can earn discounts based on how you drive. For example, safe driving habits such as smooth acceleration, braking, and avoiding speeding can all lead to savings.

Popular programs include Allstate’s Drivewise and Progressive’s Snapshot. They’re worth considering if you’re a cautious driver looking to save a bit more.

FAQs

How much can I save by shopping around for insurance?

It depends on your situation, but many people save an average of $300 to $500 per year just by comparing quotes from different insurers. Some might even find savings of over $1,000.

Will my rates go up if I file a claim?

Possibly. Filing a claim could result in higher premiums, especially if it’s your fault. However, if the claim is for something minor or if you have a long history of safe driving, it might not have much of an impact.

Can I cancel my auto insurance at any time?

Yes, you can cancel your policy at any time, but it’s a good idea to ensure you have a new policy in place before canceling. Some insurers might charge a cancellation fee, so it’s worth reading the terms and conditions before making the switch.

Conclusion

Saving money on auto insurance doesn’t have to be difficult. By shopping around, reviewing your coverage, and taking advantage of discounts, you can easily lower your premiums without compromising your protection.

It might take a little time and effort, but it’s worth it for the savings you’ll enjoy in the long run. So, what changes will you make to start saving on your auto insurance?