How to Save Money on Your Car Insurance

We’re always on the lookout for ways to save money. One of the best places to cut costs is with your monthly expenses—such as car insurance. In the United States, the average car insurance cost is $1,674 per year for full coverage, or about $139.50 per month, according to Bankrate.

For many, (ourselves included) paying that regular insurance bill is like muscle memory. You just do it, every month, without question. However, car insurance is worth another look if you’re trying to save money for more fun purchases. That’s especially true if you’ve had the same insurance for years.

To help, we’ve compiled a list of ways you can save money on car insurance.

What is Car Insurance?

Let’s start, though, with a quick definition of what car insurance actually is. This type of insurance is a legal requirement in most states so you can drive a vehicle on public roads. Car insurance is financial protection—provided by an insurance company—to cover your expenses in the event of a qualified loss related to your vehicle. In simple terms, you get in an accident or have your car stolen, and insurance will send you some money to help cover the repair or replacement costs.

Of course, this is all as a trade-off for a recurring fee from you! Pay the insurance company money, and they’ll agree to send some money back if something goes wrong in the future. This is where you have a chance to cut costs.

Shop for Quotes

The first place to save money on car insurance is when you sign up with an insurance provider. Not all providers are created equal, and you’ll get different quotes from different companies, all other things being equal. Don’t agree to the first quote you get. Shop around and look for the best deal. This is especially important because one insurance company will quote a person with good credit and a clean driving history differently than someone with poor credit and bad driving history. Depending on your circumstance, your cheapest provider may not be the cheapest provider for your friends and family.

Find Insurance Discounts

Another smart way to save money on car insurance is to find out which providers offer discounts. Many do, but they all have different perks for drivers. For instance, nearly all will reduce your bill if you have a clean driving history or take a defensive driving course. But others will give you a better rate if you’re a student, drive a specific vehicle, are a long-time customer, or install safety features in your car. Odds are there’s a discount out there that works for you!

Bundle Policies with Your Provider

You can also cut costs by bundling insurance policies with one provider. For instance, many companies will reduce your rates if you have both a home and auto insurance policy with them. Or, you can have multiple cars insured by the same provider. Bundling may also work if you have multiple drivers on the same plan or with the same company, such as a family of four. When you’re shopping around, see who has the best bundling deals that fit your scenario.

Adjust Your Policy

Do you know what is covered by your auto insurance? You can cut costs by tweaking your coverage. Most insurance providers charge more for policies that are comprehensive, meaning they will pay you money for all sorts of incidents and accidents. That can include collision, liability, property, medical, and more. What you can do is check what is the bare minimum coverage required by your state and buy that, instead of everything your insurance company has to offer.

Raise Your Deductible

The way insurance works is that you pay a monthly fee—known as a premium. When you file a claim, you are also responsible for a deductible. This is a dollar amount that you have to pay out of pocket before insurance kicks in. It’s often in the range of $500 to $1,000. What you can do to save money every month is to get a plan with a high deductible. The higher the deductible, the lower the premium. Keep in mind this means you may pay more if you have an accident, but you’re betting on yourself to stay safe on the road.

Go with a Cheap Auto

It’d be really fun to drive a fancy car, but you’ll end up paying more in car insurance. Nearly all insurance companies charge more to insure expensive vehicles. On the contrary, this means you can get better deals if you drive, well, a cheap car. However, this doesn’t mean you have to drive a really old, bad car to save money on insurance. Some manufacturers, such as Toyota and Honda, are cheaper to insure than others. The same make and model, but only a few years older, may be cheaper too. The reason is that insurance companies track how much money it costs to cover all these vehicles. The ones that cost them less money will also cost you less money!

Auto Insurance is Not One-Size-Fits-All

The bottom line is that it’s better to have coverage than to be uninsured. As a driver, though, you can still find the right insurance for your specific needs. There are many providers out there who offer discounts and are willing to provide coverage tailored to you. 

Don’t settle for the first auto insurance to come along—or the one you’ve had for years—and instead stay shopping and keep looking for the best deals possible.

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Bobby the Bee

Bobby the Bee is our honey-loving mascot. He currently holds a degree in making Missions, and making honey from Mobee University.