Three Ways to Lower Car Insurance Rates

These are great tips! I'm about to go get on the phone to lower my car insurance rates!

Wondering how to lower your car insurance rates? If you drive a car, auto insurance is a necessary bill, but it can eat into a good chunk of your budget. The good news is that you can probably pay less than what you are today.

Here are three ways to lower your car insurance rates so you can save some of that premium money for something a lot more fun:

1. Compare Insurance Companies

Compare auto insurance companies to score lower rates.

Every few years, call and compare rates. Kind of like lowering your credit card debt, if you know what competitors are offering, you may be able to use it as a type of bargaining chip.

Before you call a competitor, make sure you know exactly what your current car insurance covers, how much they’ll pay out for each type of coverage and how much your deductible is for each type of coverage. You do this because when you call to get compare rates, you want to make sure you’re comparing apples to apples.

When you’re getting a quote, you’ll want to make sure you ask not only what the premium is, but also how many times a year you pay that premium.

The last time I called the company with a lizard for their mascot, they gave me a great quote on a premium.  It really was tons cheaper than any of the other companies I called.  But I was going to have to pay it three times a year versus the twice per year frequency other insurers provided.

I did the math and found that rather than saving 15% or more, I would actually be forfeiting 15% or more per year if I chose them as my insurer.

When you’re comparing in an attempt to lower your car insurance rates, don’t forget that most  companies give customer loyalty discounts.  If you’ve had a policy with them for ten years, for example, you’ll be saving money. This means that while it’s good to shop around, you should also ask your current provider how long you have until you reach your next loyalty discount–and how much it will be.

Related Post: 10 Car Insurance Discounts You Should Ask For

2.  Trim your hedges

Check ou these three ways to lower car insurance rates.

Insurance is all about hedging risks against possible bad outcomes. While I wouldn’t recommend state minimum insurance as a way to lower your car insurance rates, you probably don’t need all the whistles and bells the insurance company will try to sell you–or already has.

For example, if you already have an amazing health insurance plan, you may not need gold star medical coverage on your auto insurance. Have a car that’s worth $1,200? You probably shouldn’t be paying for $50,000 worth of collision/comprehensive coverage on your vehicle.

Coverage for other people’s vehicles is something you’ll want to hedge against. You never know when you’re going to get into a fender bender with a Lamborghini.

I recently lowered some coverage and started saving $35/month.  The amount of hedges you’re comfortable with trimming is completely up to you.

3.  Bundle Packages

ways to lower car insurance rates

Most companies that provide auto coverage also cover other things like homes, renters, life, or valuable personal property insurance. Bundling these packages can sometimes make your premium lower.

For example, if you pay $4/month for valuable personal property, but the discount for bundling is $19/month, you’ve actually reduced your overall premiums by $15/month, and you’re getting coverage on other areas of your life.

 

Have you ever lowered your car insurance rates? Share your experiences in the comments!

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2 thoughts on “Three Ways to Lower Car Insurance Rates

  1. Amanda @ centsiblyrich

    I need to do this again. It seems like I do it every year, make the switch and then rates go up within a few months. Ugh. Since we bundle, sometimes the auto premiums are a little higher, but the homeowner’s insurance is significantly lower – so we figure overall costs.

    Reply
  2. Alexis @FITnancials

    I’ve lowered my car insurance a few times. I used my report card from school to get me a good student discount, and I also got a discount for having no accidents in x amount of time. I got a third discount by taking a good driver class that was around 3 hours long.

    Reply

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