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5 Tips and Tricks to Lower Car Insurance Costs

5 Tips and Tricks to Lower Car Insurance Costs

Keeping your car insurance affordable is a great way to make your monthly car expenses fit within your budget, as long as you are willing to make a few changes to your driving and financial behavior that impact car insurance costs. Learning how to lower your car insurance is easy, and with a few simple tips, you can significantly reduce your premiums and yearly insurance expenses.

How to Lower Car Insurance: 5 Tips and Tricks

While some of the changes you can make are quick, like getting a vehicle history report, other insurance lowering tips mean changing the way you drive. Whether it's paying more attention on the road or changing your spending habits, lowering your car insurance doesn't have to be complicated. Here are five tips you can use to make your premiums far more affordable.

Tip #1: Drive as Safely as Possible

Tip #1: Drive as Safely as Possible

If you are wondering how to get cheaper car insurance, one of the best ways to start is by becoming a safer driver. Many insurers will offer significant safe driving discounts. Some reduce the overall cost of your policy by as much as 25%. You'll want to avoid getting any moving violations or points on your license, as well as practice defensive driving. You can even take a class in defensive driving to help reduce points on your license while also learning valuable safe driving behaviors.

A few safe driving behaviors include:

  • Staying aware of your surroundings
  • Don't exceed the speed limit
  • Reduce driving distractions (i.e., don't use your phone or other devices while driving)
  • Never drive intoxicated or tired. Always stay alert
  • Keep several car lengths between you and the vehicle in front of you
  • Pay attention to changes in the speed limit, construction zones, and any other designated areas where your driving behavior changes

Tip #2: Improve Your Credit Score

In many states, your credit score will directly weigh on how much you pay in monthly premiums. The higher your credit score is, the lower the overall cost of your policy will be. Some states have banned companies from using credit scores to change insurance rates, including California, Hawaii, Massachusetts, and Michigan. Everywhere else, improving your credit score is one of the most effective ways to save money on car insurance.

There are a couple of ways to improve your credit score quickly:

  • Make payments on time
  • Raise your credit limits
  • Don't allow accounts to go to collections
  • Lower your credit utilization as much as possible
  • Check your credit score regularly
  • Try not to open new accounts frequently

Tip #3: Get a Vehicle History Report

Two of the most significant factors that affect your monthly car insurance payments are your vehicle and driving history. For your driving history, that means having fewer accidents and moving violations to demonstrate a pattern of safe driving. Having driving convictions, like speeding or DUI, will make your policy payments far less affordable.

Your vehicle history can affect if your car has ever been salvaged or declared a total loss. Your vehicle may have gone through a major accident, been declared salvage, and been repaired before purchasing it. Despite its current condition, this previous collision could still cause your car insurance payments to be higher. That's why it's always best to get a vehicle history report before purchasing a car; it's one of the only ways to know the hidden facts about your car's accidents, repairs, and past ownership.

A vehicle history report can help you determine your car insurance payments by showing you details like:

  • Title Records
  • Junk/Salvage Records
  • Insurer "Total Loss" Records
  • Pricing
  • Sales History
  • Problem Checks
  • Auto Specs
  • Location History
  • NHTSA Crash Test Ratings
  • NHTSA Recalls
  • Awards and Accolades
  • Manufacturer Information

Tip #4: Choose a Sensible Car

Tip #4: Choose a Sensible Car

While everyone wants to drive a fancy sports car or classic hot rod, you may be shocked at the monthly car insurance payments increase. Luxury and exotic cars often require more expensive policies to cover the cost of potential damage, as well as to account for the riskier behaviors these vehicles sometimes encourage. If you have a faster car, it's only reasonable to assume you will drive faster, leading to a higher rate of accidents and more potential policy payouts.

If you're asking yourself how to lower your car insurance, the answer is relatively boring: choose a sensible car. It's not the most exciting option, but selecting a safer vehicle associated with more tame driving can mean significant monthly insurance savings.

Some of the cheaper cars to insure, according to data taken in 2021, include:

  • Subaru Outback
  • Honda CR-V
  • Jeep Wrangler
  • Mazda CX-5
  • Ford Escape

Tip #5: Compare Different Rates and Raise Your Deductibles

If you want to know how to save money on car insurance, one method involves spending more time getting insurance quotes. Many drivers will simply go with the first company they approach, but this can result in paying higher than average for your policy. Insurance companies are competing to get you as a policyholder, and it's good to get multiple quotes before deciding who you will send your money to. You'll also want to reassess your insurance every few years, as some insurers will offer discounts to drivers willing to switch over their policy.

Another aspect of your insurance to check while shopping for rates is your deductibles. Your deductible, or the amount you'll pay in the case of an accident before your insurance kicks in, directly affects your monthly insurance cost. A lower deductible means higher monthly costs, while a higher deductible means lower premiums. Everyone's situation is different, but if you think the likelihood of filing a claim is low, it may be better to take on a higher deductible.

Learning How to Save on Car Insurance
Can Keep Your Finances Healthy

For those that don't know how to get lower car insurance, staring at that stack of monthly bills can be daunting. By taking the time to drive safely, boost your credit, and get the best insurer possible, you can make considerably more room within your budget. You can also take other actions to help further lower your policy cost, like using public transportation to lower your average yearly mileage, installing better safety systems on your vehicle, or talking with your insurance agent about their unique discounts.