Owning a car is expensive. Not only do you have to buy the car, but you have to pay for gas, maintenance, repairs, registration fees, and more. One of the most significant costs of car ownership is auto insurance. It’s legally required nationwide and notoriously expensive.

These rates have steadily increased over the years. Some reasons for this are completely out of consumers’ control. However, others are individualized and subject to change.

By following the steps in this guide, you’ll learn how to get lower car insurance rates and ease the burden on your wallet.

How Much Does Car Insurance Cost?

If you own a car, you don’t need to be told how expensive insurance is… you already know! The national average cost of car insurance is $1,457 annually. This makes the United States the third-most expensive country for car insurance rates.

Within the United States, car insurance costs vary significantly state by state. That’s because each state has its own laws regarding how much car insurance coverage is required.

For example, Michigan’s annual average is a whopping $2,611 since their laws necessitate personal injury protection. This type of auto insurance is usually optional in other states.

Why have car insurance rates been increasing?

Why is car insurance so expensive? A few of the most notable factors include:

  • Traffic congestion is at an all-time high – As the United States population grows, traffic increases in response. There’s been a 44% increase in traffic congestion between 1993 and 2017. This freeway congestion naturally results in more accidents. More accidents means higher insurance rates.

  • Drivers are more distracted – Even though texting and driving is illegal, people still do it. Cell phones contribute to 25% of accidents. Additionally, new cars come with their own distracting technology, like high-tech navigation systems and computer screens.

  • Car insurance claims are more expensive – As vehicle technology advances, cars have more bells and whistles, like backup cameras, blind-spot protectors, and crash prevention sensors. These features are incredibly expensive to repair. This extra cost falls on the shoulders of auto insurance companies.

Due to these factors, auto insurance companies are taking on more monetary risks than ever before. Since insurance companies distribute risk across their customers, this inflated cost trickles down to consumers in the form of higher insurance premiums.

How To Lower Car Insurance Rates

Now that you understand why car insurance rates are so high, it’s time to learn what you can do about it.

Even though traffic congestion and fancy car technology aren’t under your control, many of the other factors are. Here’s how you can optimize them to get a lower car insurance rate.

1. Be a Safe Driver

One of the most effective ways to reduce your car insurance rate is to be a low-risk driver. Avoid accidents by practicing these safe driving habits:

  • Never text and drive.

  • Never drive under the influence.

  • Don’t speed.

  • Don’t drive when you’re sleepy.

  • Drive cautiously when the weather is bad.

  • Leave ample space between you and the car ahead of you.

Car insurance companies review your driving record when determining your rate. By maintaining a safe driving record, you are likely to score a lower premium.

Even if you’ve received traffic violations in the past, many car insurance companies only look back on the past 3 years, giving you a fresh start if you need one.

2. Take a Defensive Driving Course

To take your safe driving skills to the next level, consider signing up for an accredited defensive driving class. Not only will this help you avoid future accidents, but it can also make you eligible for discounted car insurance rates.

Give your auto insurer a call to find out what defensive driving course they recommend and how much of a discount they’ll offer for your participation.

3. Choose Your Auto Insurance Company Wisely

Car insurance rates vary between companies. It always pays to shop around for the best deal. Consider the following factors during your search:

  • Coverage

  • Pricing

  • Reputation

  • Claims service

  • Discounts

Online Auto Insurance is a great resource to compare coverage and premiums. You can also ask your friends and family about their auto insurance experiences.

4. Bundle Your Insurance Policies

In addition to auto insurance, you probably need homeowners insurance or renters insurance at the very least. Bundling these policies with one company often results in savings. Insurance companies are known to offer up to 10% off your premium for purchasing multiple policies from them.

Similarly, if you can insure multiple vehicles or drivers through a single auto insurance company, do so, as it will save you money. Keep in mind that you can only bundle your policy with drivers who:

  • Live at your residence

  • Are blood-related

  • Are married to you

  • Jointly own a vehicle with you

5. Consider Insurance When Buying a New Car

The type of car you drive has a huge impact on your auto insurance premiums. Some cars are more costly to repair and include different safety features. Before you buy a new car, ask your insurance company what it will cost to insure it and factor that into your purchase decision.

In general, bigger cars are more expensive to insure. However, cars with eco-friendly features can offset this cost. For example, many insurers will reward you for getting a hybrid vehicle.

Furthermore, if you prioritize safety in your purchase, you will enjoy even more insurance savings, ranging between 5% to 40%. Look for the following safety features during your car search:

  • Anti-lock brakes

  • Automatic seat belts

  • High-quality airbags

  • Electronic stability control

  • Daytime running lights

6. Request a Higher Deductible

Your insurance deductible is the amount you pay out of pocket before your insurance takes over. Insurance premiums and deductibles have an inverse relationship. As your deductible goes up, your insurance premiums go down.

Car insurance deductibles can range anywhere between $250 to $1,000. By choosing a $1,000 deductible over a $250 deductible, you can reduce your insurance premium by around 40%.

If you can afford a higher deductible, you may end up saving money in the long run, depending on how many claims you file. Just make sure you always have enough savings set aside to cover the deductible in the case of an accident.

7. Reduce Your Coverage

Reducing your auto insurance coverage is a quick way to lower your premiums.

Since vehicles depreciate over time, you might want to cut unnecessary coverage on an older car. For example, collision coverage may not be worth it for a car whose value is plummeting due to old age. You can check your car’s current value by looking up average prices for your make, model, and year online.

In addition, you can consider cutting roadside assistance and car rental coverage unless you think you will need them. By doing so, you will reduce your car insurance costs dramatically.

8. Maintain a Good Credit Score

As with many things in life, a good credit score will improve your options. Many auto insurance companies consider your credit score when deciding your premium. That’s because your credit score is an indicator of how likely you are to make your payments and be a long-term customer. Plus, people with good credit tend to have fewer insurance claims.

If your credit score needs improvement, take the necessary steps to bring it up. This will save you money on your auto insurance, as well as in other areas in life.

9. Ask About Discounts

Auto insurance companies offer a plethora of discounts, many of which may apply to you. Here are some to ask your insurance provider about:

  • Low Mileage Discounts – If you don’t drive very much, you can qualify for a low mileage discount. These discounts are given to drivers who drive infrequently or who carpool often. See how auto insurance and working from home benefits you.

  • Anti-Theft Device Discounts – Installing anti-theft devices, like car alarms or LoJacks, can save you up to 25% on your auto insurance, depending on your provider. Storing your car in a home garage can also qualify you for this discount.

  • Good Student Discounts – If your teenager ranks in the top 20% of their class or maintains a B grade average, they can earn a “good student discount” until they turn 25. This can save around 30% on your insurance.

  • Professional Group Affiliation Discounts – If you belong to the military or another professional group, you may be eligible for certain discounts.

In addition, you can receive small discounts for getting paperless bills, paying your annual premium all at once, and for being a long-term, loyal customer.

How To Lower My Car Insurance Today

As you can see, you directly impact your auto insurance premium with the choices you make. By using a combination of these recommendations, you can save a ton of money on your auto insurance.

Online Auto Insurance is a great resource for comparing car insurance coverage from different companies. Use it to request quotes and discover what level of coverage is right for you.

For answers to other questions like, “Does your car insurance and registration have to be under the same name?” visit the Online Auto Insurance blog to keep learning!

Sources:

Market Watch. The Most Expensive Countries for Auto Insurance https://www.marketwatch.com/press-release/the-most-expensive-countries-for-auto-insurance-2019-05-14

Find Law. Car Insurance Laws by State https://injury.findlaw.com/car-accidents/car-insurance-laws-by-state.html

Curbed. Expanding highways and building more roads actually makes traffic worse https://www.curbed.com/2020/3/6/21166655/highway-traffic-congestion-induced-demand

Edgar Snyder & Associates. Texting and Driving Accident Statistics https://www.edgarsnyder.com/car-accident/cause-of-accident/cell-phone/cell-phone-statistics.html