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The Top 7 Ways to Save on Auto Insurance

  • 4 min read

Most people have a love-hate relationship with auto insurance. They love the protection and stability that it provides, but hate the expensive premiums that always seem to be going up!

In 2020, the average driver spent over $1500 on auto insurance, a new record high! I think it’s safe to say that insurance isn’t getting cheaper any time soon. 

You need to protect yourself, your family, and everything that you’ve worked hard for so what are you supposed to do about those ridiculous premiums? Fortunately, there are plenty of ways to save on auto insurance! We’ve put together a list of some of the most effective ways to save below.

1. Change how and when you pay your premium.

Auto insurance companies will reward you with discounts and lower premiums for making their jobs easier. Changing how and when you pay is one of the simplest ways to do that.

Pay in full every six months or once per year instead of monthly. It costs the insurance companies to process your payments so fewer payments means fewer transaction costs for them. Typically, they will pass these savings on to the customer in the form of a discount. It’s important to budget for the six month or annual payment, however, so as to avoid being unprepared when the bill comes due.

Set up automatic payments. Like many service providers, insurance companies often provide a discount for setting up automatic payments. They do this because automatic payments means they’re more likely to get paid on time. It’s also means you’re less likely to miss a payment and accrue late fees, etc. so automatic payments is a no-brainer all-around. 

2. Increase your deductible.

Raising the deductible on your auto insurance policy is one of the fastest ways to lower your premium. Your deductible is the amount you pay out of pocket before the insurance pays the rest. If you have an accident that costs $1000 to repair and your deductible is $500, you would pay the $500 deductible and the insurance company would pay the remaining $500. 

The lower the deductible, the more money the insurance company would be on the hook for if you have an accident. Lower deductibles equal higher premiums since you're more of a risk to the insurance company. 

Increasing your deductible by just a few hundred dollars could dramatically reduce your premiums. It’s important to remember, however, to keep an emergency fund or other savings to make up for the increased out of pocket costs in the event of an accident.

3. Bundle your policies.

Most people have multiple items to insure. For example, if you have a family, there are likely multiple drivers and vehicles to be insured. You may even have a boat or motorcycle that needs to be covered as well. 

Bundling these policies together under a single provider will almost always result in savings. You’ll also like the convenience it provides vs dealing with multiple bills, providers, etc.

4. Ask about special discounts.

Are you a military veteran? A student? No accidents in a while? There’s probably a discount for that! You just have to ask. Discounts are often available for safe drivers, low mileage drivers, and those with affiliations to various organizations like the military, AARP, universities, etc.

5. Eliminate coverage that you don’t need.

As we all know, it’s sometimes possible to have too much of a good thing. Auto insurance is no different. While coverage is great, it’s easy to get excited and sign up for more than you actually need.

For example, if you have a car that you’ve paid off and isn’t worth that much, then paying extra for collision coverage may not make sense. Also, be wary of policy riders or add-ons to your coverage. These extras are almost always unnecessary and can be removed for additional savings. 

6. Downgrade to an older, cheaper vehicle.

Everybody loves all the bells and whistles that come with a newer vehicle, but since they cost more to repair and replace, it costs more to insure them too!

Newer vehicles may even have added safety features like rearview cameras and blind spot assistance, but any insurance savings these provide will be dwarfed by the increased cost to repair and replace if necessary so the premium will still increase despite the increased safety. 

So the next time you’re shopping for a vehicle, consider one a few years older and save big on your insurance premiums. The extra money in your pocket will feel better than the newest bell and whistle!

7. Compare quotes at least once per year.

The only thing worse than paying insurance premiums is shopping around for insurance in the first place! Comparing quotes at least once per year could save you hundreds of dollars in insurance premiums. 

You likely go to the doctor for regular checkups and managing your auto insurance should be no different. A quick rate check using a rate comparison tool only takes a couple minutes and could lead to huge savings! That’s worth a couple minutes, don’t you think?



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