Paying for car insurance is a necessary expense for drivers, but that doesn’t mean you have to overpay for coverage. As a finance blogger, I’m always looking for ways to maximize my savings. After doing some comparison shopping lately, I was able to find much better auto insurance rates.
If you want to get a great deal on your next car insurance policy, here are my top 5 tips for saving money:
1. Compare Quotes from Multiple Insurers
This is the most important tip when it comes to saving money on auto insurance quotes. Rates can vary dramatically between insurers, so don’t just renew your current policy without shopping around first.
Here’s what has worked for me:
- Get quotes from at least 5-6 different national and regional insurance companies. Online quote tools make this easy.
- Compare “apples to apples” by getting quotes for the exact same coverage amounts and deductibles.
- Look at both big insurers like Geico and Allstate along with lesser-known brands. Regional companies can sometimes offer the best rates.
- Have your driver’s license, VIN, and current policy info handy when getting quotes for easy comparisons.
Taking the time to gather multiple quotes helped me find annual savings of over $500 compared to my prior insurer!
2. Ask About Discounts
Auto insurers offer all kinds of discounts these days to help win your business. When chatting with agents and getting online quotes, be sure to ask about any discounts you may qualify for, such as:
- Multi-policy discounts if you bundle home or renters coverage too
- Good student discounts for young drivers with a B average
- Safety features like airbags, anti-lock brakes and anti-theft devices
- Defensive driver discounts for completing a safety course
- Usage-based discounts with a telematics program or app
Every discount can lead to a few dollars of savings each month. I found I qualified for a multi-policy bundle discount for having renters insurance too, which was an easy win!
3. Raise Your Deductible
If you currently have a low deductible like $250 or $500, see how much you can save by raising it to $1,000 or more. The higher the deductible you choose, the lower your premiums will be.
This option makes the most sense if you have some money set aside for emergency repairs or expenses. Just be prepared to pay more out-of-pocket if you do have an accident down the road.
Going from a $500 deductible to $1000 chopped over $200 per year off my premiums. See if a higher deductible works for your budget.
4. Limit Your Miles
Insurers ask for your annual mileage estimate when quoting rates. This is because the more miles you drive, the more risk you take on the road.
If you’ve started driving less because of remote work or other reasons, be sure to update your mileage when shopping for lower auto insurance rates. Just adjusting my estimate to reflect my lower pandemic mileage saved me $120 per year.
You can also look into usage-based programs that track your driving habits and reward less mileage with discounts.
5. Maintain a Good Credit Score
Here’s an easy way to save that has nothing to do with your driving! Most insurers use your credit-based insurance score as a factor when setting rates.
Maintaining a strong credit score and limiting hard inquiries when applying for new credit can help keep your premiums low. Improving my score over the past year netted me the biggest savings of all.
Remember, even one negative item on your credit report could send your insurance costs soaring. Monitoring and protecting your credit is hugely important.
Get Saving Today!
Finding the best deal on car insurance takes a little work, but following these tips could potentially save you hundreds of dollars a year. Take the time to shop around, look for discounts and optimize all the variables that affect your auto insurance rates.
The savings you lock in will be well worth the effort. If you have any other questions about getting a great rate, feel free to reach out anytime! I’m always happy to share more about my auto insurance experiences. Drive safe and smart out there.