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How To Save Money On Car Insurance & Lower Your Rates

How To Save Money On Car Insurance & Lower Your Rates

Discovering how to save money on car insurance can be a game-changer for your finances. In this comprehensive guide, we’ll cover various tips and strategies to lower your car insurance rates and provide helpful information to help you make informed decisions. You can secure the best deals and discounts from insurance companies with the right approach.

Last Updated Jun 07, 2023
5 min read

Take Advantage of Car Insurance Discounts

Car insurance discounts are incentives insurance companies offer to reward safe driving, customer loyalty, or other factors that lower the claim risk. These discounts can significantly reduce your insurance premium, leaving more money in your pocket. Our car insurance discounts page goes into more detail about what discounts may be available with your insurer.

Good Student Discounts

Students with good grades may qualify for insurance discounts. Insurance companies often reward good students, recognizing that responsible students will likely be responsible drivers. Providing proof of good grades or maintaining a certain GPA is one of the many ways to save money on teenage car insurance.

Safe Driving Discounts

Insurance companies often reward safe drivers with discounts, as they are less likely to be involved in accidents and file claims. By maintaining a clean driving record and adopting safe driving habits, you can qualify for various safe driving discounts, ultimately lowering your car insurance premiums.

Good Driving Record

A good driving record is one of the essential factors in determining your car insurance rates. If you have a history of safe driving and minimal accidents or traffic violations, you’re considered a lower-risk driver and could qualify for lower insurance premiums.

And as we discussed previously, some insurance providers offer safe driving discounts, which can lead to savings on your car insurance policy. To maintain a good driving record, always follow traffic laws and regulations, practice defensive driving techniques, and avoid distracted driving.

In addition to good driving discounts, you may also qualify for accident forgiveness programs. These programs can protect you from rate increases due to a single accident, helping you maintain affordable car insurance rates even in the event of an accident.

Preferred Parking Discounts

Some insurance companies offer preferred parking discounts to policyholders who park their vehicles in secure parking facilities. These facilities are usually equipped with security features like surveillance cameras, alarms, and security guards, making it less likely for your car to be stolen or vandalized.

Insurance providers view these policyholders as lower risk. They may offer discounted rates on comprehensive coverage, which covers damages to your vehicle due to non-collision incidents like theft, vandalism, or natural disasters.

If you have access to a secure parking facility, ask your insurance provider if you qualify for a preferred parking discount.

Driving School Discounts

Completing a driving school program could qualify you for a discount on your car insurance policy. Driving schools offer courses that teach safe driving techniques, defensive driving, and road awareness, which can help improve your driving skills and make you a safer driver. 

Insurance providers recognize the value of these skills and may offer discounts to policyholders who have completed a driving school program. Be sure to check with your insurance provider to see if they offer a driving school discount and, if so, which driving school programs are eligible.

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Multi-Car Discounts

Insuring multiple vehicles with the same company can lead to significant savings on your car insurance premiums. Many insurance providers offer multi-car discounts to policyholders who insure more than one vehicle under the same policy.

Bundling multiple auto insurance policies together can lower each vehicle's premiums, making it a cost-effective option for families or households with multiple drivers. 

Therefore, it could prove beneficial to inquire with your insurance provider about any multi-car discounts that may be available to you. These can lead to substantial savings on your car insurance policy.

Military Discounts

Active-duty military members, veterans, and National Guard or Reserve members may be eligible for car insurance discounts. Many insurance companies offer military discounts as a way of recognizing the service and sacrifice of our armed forces. 

Not all insurance providers offer military discounts, so it’s recommended to check with your insurance provider to see if you qualify for a military discount.

Senior Discounts

Senior citizens aged 55 or older may be eligible for car insurance discounts due to their extensive driving experience and, often, a safe driving history. Insurance companies recognize the value of this experience and may offer various incentives to reward older drivers who maintain a low-risk profile.

Types of Senior Discounts:

Reduced Premiums:

Some insurers offer lower premium rates for senior drivers who maintain a clean driving record and demonstrate safe driving habits.

Discounts for Completing Mature Driver Courses:

Seniors can qualify for discounts by completing approved mature driver safety courses. These courses refresh driving skills and update older drivers on the latest traffic laws and regulations.

Retiree or Low-mileage Discounts:

Older drivers who are retired or semi-retired may drive less frequently than their younger counterparts. As a result, insurance companies may offer discounts for low annual mileage, reflecting the reduced risk of accidents.

Vehicle Safety Feature Discounts:

Senior drivers who invest in vehicles with advanced safety features, such as anti-lock brakes or collision avoidance systems, may be eligible for additional discounts. These features help minimize the risk of accidents and subsequent claims.

What to Look Out For:

Age-based Pricing Changes:

Some insurance companies might increase rates for older drivers due to age-related factors, such as slower reaction times or health issues. Be sure to compare quotes from multiple insurers to find the best rates for your situation.

Coverage Adjustments:

As your driving habits and needs change, it’s essential to review your coverage and adjust it accordingly. For example, you may want to consider reducing or eliminating collision coverage on an older vehicle.

To take advantage of senior discounts, inquire about available offers when shopping for car insurance or renewing your policy. Regularly review your coverage to ensure it aligns with your current needs and driving habits. By staying informed and proactive, senior drivers can capitalize on their experience to secure lower insurance rates.

First-Responder Discounts

First responders, including police officers, firefighters, EMTs, and other emergency service professionals, play a vital role in their communities. To acknowledge their service and commitment, some insurance companies offer exclusive discounts on car insurance policies for these individuals and their families.

Types of First-Responder Discounts:

Occupation-based Discounts:

Some insurance providers offer direct discounts to first responders based on their profession. These discounts typically apply to the premium cost and may require proof of employment or professional affiliation.

Family Member Discounts:

In some cases, insurance companies extend first-responder discounts to immediate family members. This benefit recognizes the sacrifices made by the families of those who serve their communities.

Discounts for Professional Association Memberships:

First responders who are members of professional associations may have access to additional discounts through their membership. These discounts may be available through partnerships between the association and insurance providers.

Finding the Best Rates for First Responders:

Inquire About Discounts:

When shopping for car insurance or renewing your policy, ask your insurance provider about any available first-responder discounts. Be prepared to provide documentation to confirm your eligibility.

Shop Around:

Not all insurance companies offer first-responder discounts. To find the best rates and coverage, it’s essential to compare quotes from multiple providers. This comparison will help you identify the most cost-effective option that caters to your unique needs.

By exploring available first-responder discounts and comparing insurance policies, first responders and their families can secure more affordable car insurance rates while ensuring adequate coverage.

Low Mileage Discounts

If you don’t drive your car frequently or cover minimal distances, you may be eligible for a low-mileage discount from your insurance provider. Driving fewer miles reduces the likelihood of an accident, leading insurance companies to offer more favorable rates to low-mileage drivers.

To explore this potential discount, evaluate your driving habits and consult your insurance agent to determine if your current patterns qualify you for reduced rates.

Couple trying to save money on expenses

How to Get Car Insurance Discounts

To make the most of these discounts, you should talk with your insurance provider to understand what discounts are available and how to qualify for each one.

Determine Your Eligibility:

Review the requirements for each discount and ensure you meet the criteria. Some discounts may require documentation, like proof of good student status or completion of a defensive driving course. Keep these documents handy when negotiating with your insurance provider.

Comparison Shop:

Get quotes from multiple insurance companies to find the best combination of coverage and discounts. Make sure you’re comparing apples to apples—ensure each quote includes the same coverage limits, deductibles, and applicable discounts.

Periodically Review Your Policy:

Your eligibility for discounts may change over time, so review your policy at least once a year. You may qualify for new discounts, or you may no longer be eligible for specific savings. Make sure to inform your insurance provider of any changes in your situation that could impact your discounts.

Combine Discounts Strategically:

Some discounts may not be stackable, meaning you can’t combine them for additional savings. Be strategic about which discounts you prioritize to maximize your savings. For example, if a good student discount saves you more than a low-mileage discount, focus on maintaining your GPA rather than driving less.

Home with parked car

Bundle Your Insurances

Many insurance companies offer discounts to policyholders who purchase multiple insurance products from them by bundling auto and homeowners/renters insurance.

This strategy can result in lower premiums and a more streamlined insurance management process. If you’ve not considered bundled auto and homeowners insurance, now’s the time to look into it, as it could save you.

Get a Higher Deductible

Opting for a higher deductible can lead to lower car insurance premiums, but it’s essential to understand the trade-off involved. A deductible is the out-of-pocket amount before your insurance coverage kicks in if you need to file a claim. 

By choosing a higher deductible, you essentially agree to shoulder more of the financial burden in the event of an accident.

The relationship between deductibles and insurance rates is inversely proportional. As your deductible increases, your insurance premiums typically decrease since the insurer’s financial responsibility is reduced. 

However, it’s crucial to carefully consider your financial situation and risk tolerance before opting for a higher deductible. While it may result in lower premiums, you must be prepared to cover the higher out-of-pocket costs should you need to file a claim.

To make an informed decision, weigh the potential savings on premiums against the increased financial responsibility associated with a higher deductible. This evaluation can help you find a balance that suits your budget and risk preferences while ensuring adequate coverage.

Reduce Unnecessary Insurance Coverage

Assess your insurance policy and consider removing any unnecessary coverages, such as collision coverage and comprehensive coverage for older vehicles. As your car’s value depreciates significantly over time, maintaining full coverage might not provide the best return on investment.

By streamlining your insurance coverage to align with your vehicle’s current value and your unique needs, you can effectively lower your overall insurance costs. This approach ensures you balance cost savings and maintain the appropriate level of protection for your particular circumstances.

Improve Your Credit Score

Maintaining a good credit score can positively impact car insurance rates, as insurance providers often use credit history to determine premiums. A good credit score demonstrates that you are responsible with your finances, indicating that  you present a lower risk to insure. Generally, according to the FICO scoring model, a ‘good’ credit score falls within the range of 670 to 739.

If your credit score is below this threshold, consider implementing the following quick tips to improve your credit:

Pay Your Bills on Time:

Timely payments contribute significantly to your credit score. Set up reminders or automatic payments to ensure you never miss a due date.

Reduce Your Debt:

Pay outstanding debts, especially high-interest ones. Focus on maintaining low credit card balances and avoid taking on unnecessary debt.

Keep Credit Utilization Low:

Aim to use no more than 30% of your available credit limit. High credit utilization can negatively impact your credit score.

Review Your Credit Report:

Regularly check your credit report for errors or discrepancies. If you find any, contact the credit reporting agency and the relevant creditor to have them corrected.

Maintain a Mix of Credit Types:

Demonstrating responsible management of various types of credit, such as credit cards, auto loans, and mortgages, can positively affect your credit score.

With an improved credit score, you can potentially enjoy lower car insurance premiums and better insurance coverage options. Building and maintaining a strong credit history not only benefits your car insurance rates but can also lead to better financial opportunities in other areas of your life.

Downsize Your Vehicle

For several reasons, switching to a smaller, less expensive, or safer vehicle can lead to lower insurance costs. Vehicle size plays a role, as smaller vehicles are generally less expensive to insure. They tend to cause less damage in accidents and are more maneuverable, reducing the risk of collisions.

Safety Features:

Vehicles equipped with advanced safety features, such as airbags, anti-lock brakes, and electronic stability control, can lower your insurance premiums. These features reduce the likelihood of accidents and injuries, making your vehicle a lower-risk in the eyes of insurance companies.

Repair Costs:

Insurance companies also consider the cost of repairs when calculating your insurance premium. Less expensive vehicles typically have lower repair costs, making them cheaper to insure. Choosing a vehicle with lower repair costs can save money on your car insurance policy.

Pay-Per-Mile Insurance

Pay-per-mile or usage-based insurance offers a flexible policy tailored to your driving habits. This type of policy charges you based on the number of miles you drive, using technology to monitor your mileage and, in some cases, your driving behavior.

How Pay-Per-Mile Insurance Works:

Tracking Device:

The insurance company provides a device or smartphone app to track your mileage and potentially other driving-related data, such as speed and braking patterns.

Mileage-based Premiums:

Your insurance premium is determined by a base rate and a per-mile fee. The fewer miles you drive, the lower your overall premium will be.

Mileage Thresholds:

While there isn’t a universal mileage threshold to qualify for pay-per-mile insurance, it is typically more cost-effective for drivers who travel less than the national average (about 12,000 to 15,000 miles per year). Each insurance provider may have different criteria, so knowing their specific guidelines is essential.

For drivers with low annual mileage, pay-per-mile insurance could result in significant savings compared to traditional car insurance policies. These policies reward you for driving less, as fewer miles on the road typically equates with  a lower likelihood of being involved in an accident. 

Choosing a pay-per-mile policy can also encourage more environmentally friendly habits by incentivizing reduced vehicle use. Be sure to compare different providers and their offerings to find a pay-per-mile insurance policy that best suits your needs.

Take A Defensive Driving Course

Defensive driving courses are designed to teach drivers how to anticipate and react to potential hazards on the road, making them safer and more responsible drivers. These courses typically cover traffic laws, road signs, accident prevention techniques, and strategies for dealing with aggressive or impaired drivers.

There are many multi-layered benefits of taking a defensive driving course, as it relates to saving money on car insurance, including:

Insurance Discounts:

Many insurance companies offer discounts to drivers who complete a defensive driving course, as it demonstrates your commitment to safe driving. The discount amount may vary between insurance providers, so it’s essential to ask your insurance agent or provider about the specific discount and eligibility requirements.

Improved Driving Skills:

Defensive driving courses teach valuable skills and techniques that can help you avoid accidents and stay safe on the road. These skills include scanning the road ahead for potential hazards, maintaining a safe following distance, and understanding how to react in emergencies.

Clean Driving Record:

By learning and applying defensive driving techniques, you are setting yourself up to be less likely to be involved in accidents or receive traffic violations, which ought to help you maintain a clean driving record. A clean driving record is essential for lower insurance premiums, as insurance providers often reward safe drivers with lower rates.

License Points Reduction:

In some states, completing a defensive driving course can also help you reduce points on your driver’s license, resulting in lower insurance premiums and helping you avoid license suspension.

Enhanced Confidence:

Completing a defensive driving course can give you more confidence on the road, as you’ll be better equipped to handle challenging driving situations and make safer decisions.

Various organizations, including private driving schools, community colleges, and online providers, offer defensive driving courses. Consider accreditation, course format, duration, and cost when selecting a defensive driving course.

Pay Your Insurance Bill in Full

Paying your insurance premium in full rather than installments can lower overall costs. Many insurance companies offer discounts for policyholders who pay their premiums in a single lump sum, as it reduces administrative costs and ensures timely payment. By paying your insurance bill in full, you can enjoy both convenience and savings.

Switch Your Car Insurance Company

Shopping around for new insurance coverage can help you find the best deals. Comparing car insurance quotes from multiple insurance providers can reveal opportunities for savings and improved coverage. 

Another way to keep costs lower when switching insurance companies is to change BEFORE your current policy expires, avoiding any lapses.

Leverage SteadyDrive to Secure Lower Insurance Rates

Utilizing SteadyDrive can play a significant role in helping you save money on car insurance. Our mobile app uses your smartphone’s technology to analyze your driving habits and offers exclusive car insurance discounts to good drivers. 

SteadyDrive helps demonstrate your low-risk driving behavior to insurance providers. Here’s how SteadyDrive works:

Monitoring Driving Habits:

SteadyDrive monitors and analyzes your driving habits over a few weeks. This data can tell a few things, including whether you are speeding, using your phone while driving, or hard braking. These kinds of events contribute to your driving score, with fewer risky events leading to a higher driving score.

Offering Better Rates:

Traditional insurance pricing is based on factors like age and credit score, which may not accurately reflect your driving ability. SteadyDrive scores your driving over a test drive period. If you qualify based on your good driving, a leading insurer will offer a quote that considers how YOU drive. As a good driver, you may save hundreds of dollars a year.

Insurance Companies:

SteadyDrive works with leading insurance providers to help you find the best rates based on your driving performance.

Using SteadyDrive, you can demonstrate to insurance providers that you’re a safe motorist, that could make you eligible for lower insurance rates. In addition to potential savings, using SteadyDrive can help you develop safer driving habits, which can reduce your risk of accidents and claims.

Related: How SteadyDrive Works

Conclusion

Saving money on car insurance is achievable with the right strategies and knowledge. By taking advantage of discounts, adjusting your coverage, and making informed decisions about your insurance policy, you can enjoy lower premiums and better protection.

Remember, researching various insurance providers and understanding the discounts and savings available is the key to finding the best rates. By following these tips, including exploring options like SteadyDrive, you can save money on car insurance and enjoy lower premiums in the long run.

Disclaimer:

SteadyDrive is not an insurer or an insurance agent or broker. SteadyDrive does not provide you with an insurance policy, so make sure that you have insurance coverage while you drive. Plase contact your insurer or an insurance agent or broker (if applicable) directly regarding questions you may have pertaining to auto insurance coverage. For more details, see SteadyDrive’s Terms of Service.

Good drivers can save hundreds per year on auto insurance

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Good drivers can save hundreds per year on auto insurance.

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Good drivers can save hundreds per year on auto insurance.

Sign up for SteadyDrive today!