How to Reduce Car Insurance Rates

Reduce your car insurance rates by purchasing a new car, avoiding accidents, using discounts, and getting security devices. Figure out what type of coverage you need, then obtain quotes from several companies.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • Cars that are more likely to be stolen may cost more to insure
  • Safety add-ons could save you money on your insurance premium
  • Insurance companies offer incentives and discounts for a variety of reasons
  • Keep a clean driving record to ensure you receive the lowest insurance rates


While thinking about car insurance may seem mundane, finding five compelling ways to reduce car insurance premiums can be pretty exciting. That excitement can increase when you find that one of the ways to save is by getting yourself a new car.

Other compelling ways to save are pointed out by the Idaho Department of Insurance. They include remaining safe, becoming secure, getting discounts, and staying out of trouble.

Enter your zip code in our FREE tool to check out car insurance rates from dozens of companies!

Although highly compelling, buying a new car may seem like the costliest way to save money on car insurance. The investment, however, can be worth it in the long run. And who doesn’t love a new set of wheels?

Buy a New Car to Reduce Car Insurance Rates

A new car doesn’t necessarily mean one fresh off the showroom floor. It simply means a vehicle that is new to you.

Used vehicles are typically cheaper and can be just as effective for lowering your car insurance costs and saving you money over time. The key is to find a vehicle model that is deemed to be safer than most.

The type of vehicle you drive has a major impact on how expensive your rates will be, so choosing a new car wisely may save you a bundle.

Some of the factors that affect the cost to insure a vehicle are how much it costs to repair, how it holds up in accidents, and its chances of being stolen.

For instance, many sports cars have higher insurance costs due to the high cost of fixing damages and the number of serious crashes that occur annually; both raise claim amounts and car insurance rates.

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Buy a Car That Doesn’t Get Stolen

Cars that are frequently stolen typically cost more to insure. Every year, the National Insurance Crime Bureau issues a “Hot Wheels” list that provides the most-stolen vehicles.

Topping the list for the most stolen vehicles in 2009 were the 1994 Honda Accord, followed by the 1995 Honda Civic and the 1991 Toyota Camry.

The 1997 Ford F-150 Pickup takes the number four slot while the 2004 Dodge Ram Pickup and 2000 Dodge Caravan take slots five and six.

The list closes out with the full-size 1994 Chevrolet Pickup, 1994 Acura Integra, 2002 Ford Explorer, and 2009 Toyota Corolla. As you’ll note, the cars on the list are typically older models that may not have the advanced or enhanced security measures of newer vehicles.

Buy a Safe Car

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Another way to do your homework before purchasing a vehicle that’s new to you is to check out the safety devices that come with the vehicle. A safe ride for you may mean a lower rate from the insurance company.

The U.S. Department of Transportation’s SaferCar website talks about safety technology that’s in use today and how you can look for vehicles that incorporate it.

A few of the features include electronic stability control, lane departure warning, and forward collision warning.

Electronic stability control, or ESC, helps you keep the vehicle under control and stable.

Lane departure warning and forward collision warning, or LDW and FCW, alert you when you are either veering out of a lane or coming too close to other vehicles in front of you.

You can also research vehicle safety by looking at the National Highway Traffic Safety Administration’s 5-Star Safety Ratings System.

Research vehicles that are catching your eye to see how they rated in crash tests and other safety testing procedures.

The final step for saving on car insurance with a new vehicle can be asking a car insurance company for its own input. Find out what vehicles are cheapest and most expensive and ask about the vehicle you intend to purchase.

Also, note that if you do go for the showroom floor, brand new car with loads of fancy and unnecessary features, you are probably going to end up with a vehicle that is on the expensive-to-insure list.

Regardless of the price of your new vehicle, you may have a way to help ensure your money is not wasted in the event of a crash.

Some car insurance companies offer GAP coverage for financed or leased vehicles. This means the company will pay for the gap or the money you still owe on the vehicle.

This adds one more layer of protection and peace of mind when insuring your new vehicle.

Get Safe to Save on Car Insurance

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Even if your vehicle does not have the latest and greatest safety technology, you can still make sure it’s safe to save money on insurance. Safety devices typically merit a discount on insurance, and even your older vehicle may already have several onboard.

Car insurance companies may offer discounts for such standard equipment as airbags, anti-lock brakes, and automatic seat belts, according to state industry regulators at the Illinois Department of Insurance.

Purchasing additional devices may increase your discount even more.

Higher-tech devices noted at SafeCar.gov include advanced head restraints, advanced frontal airbags, and side airbags.

Advanced head restraints are located in the middle top of the windshield and they are designed to reduce your risk of head and neck injuries in the event of a crash.

Frontal airbags, which are standard in many vehicles, protect the driver and passenger’s head, neck and chest in the event of a frontal crash. Side airbags do the same in the event of a side crash.

Even if additional safety devices do not always reduce your insurance rates, they still serve a purpose by keeping you and your family safe.

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Get Secure to Save on Car Insurance

Car thefts drive insurance rates to the hilt; making sure your car is protected helps keep costs down.

Insurance companies often offer discounts for anti-theft devices in vehicles, many of which you can have installed after purchasing the vehicle.

Car alarm systems are usually standard for newer models, and newer cars may also come with automatic wheel locks or ignition locks that freeze up the vehicle if someone tries to start it without a key.

You can also add an array of anti-theft devices that both deter theft and help you recover your vehicle if it is stolen.

Car insurance companies offer discounts for both passive and active anti-theft devices for your vehicle, so you have many options to choose from. Many of the anti-theft devices double at deterring vandalism, so insurance companies generally welcome them.

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Get Discounts to Save on Car Insurance

If you think discounts for being safe and deterring theft are compelling, just wait until you see what other discounts may be available. One of the keys to getting discounts is to ask about them.

While many car insurance companies openly list some of the discounts they offer, you may not find out about all of them unless you inquire.

Some of the more common discounts include buying more than one policy type from the same company, such as auto and home insurance, or insuring more than one vehicle with the same company, such as your car and your spouse’s truck.

Discounts may also be available for good students, mature drivers, or individuals with low annual mileage. Take the low mileage discount even lower with a carpool and you may find some companies offer a discount for that, too.

Members of the military can often merit discounts, even if they are no longer on active duty.

Don’t Crash to Save on Car Insurance

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A clean driving record is one of the top considerations when it comes to setting your car insurance rates. You can help keep your driving record squeaky clean with a few tips from the Indiana Department of Transportation.

Wearing your seatbelt is a must for safe driving, as is never driving while under the influence of alcohol or drugs. Even certain medications can impair your skills and slow your reaction times.

Driving attentively and defensively are two more tips for crash avoidance.

Indiana DOT says to get rid of distractions to help ensure you are paying attention to the road and what’s going on around you. It lists the top three distractions as cell phones, CDs, and coffee.

Defensive driving means not driving aggressively, as unnecessary risks can increase your own risk of crashing.

The final tip is to share the road safely–your vehicle is not the only thing on it. Pay attention to pedestrians, bicyclists, motorcyclists, commercial truck drivers, baby carriages, and everything else that may be in the roadway.

Good driving records don’t happen by accident, they are usually a result of experience and skills.

You can work on both by enrolling in driver’s education courses, even if you have had your driver’s license for years. Once again, car insurance companies may offer discounts for taking such courses.

Many states offer driver education courses that can hone your existing skills and help you develop new ones. Not only may those skills help save you cash on your car insurance, but they may also help keep you and your family safe as you’re cruising down the road.

One more way to save money on your car insurance is to shop around.

Figure out what type of coverage you need, then obtain quotes from several companies. You may be amazed to see the drastic differences between companies.

Start comparing car insurance rates from multiple companies by entering your ZIP in our FREE car insurance tool!

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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