Car Insurance Guide
Use this car insurance guide to save on car insurance rates by finding discounts, combining policies, and more. Comparison shopping alone can lower your car insurance rates by up to 20%.
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UPDATED: Mar 23, 2021
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- Car insurance is a necessary expense for all drivers out on the road
- Most insurance companies provide several discounts if you know what to ask for
- Good credit and smart consumer choices help you get the most coverage for your money
Why is this car insurance guide so valuable? Well, it’s a fact of life: you have to buy car insurance. You’re breaking the law if you don’t, so the question is, how can you buy it for less?
It doesn’t matter if you’re insuring a Lexus or just need a policy for your beater — we’ve compiled our 25 top tips to help you save as much as possible. These tips could even cut your current auto insurance payment in half!
Read through our ultimate auto insurance guide and then be sure to enter your zip code above to compare car insurance quotes from many different companies to see how much you might be able to save!
The Steps to Save Money
Follow these steps and save today.
Use Your Occupation to Your Advantage
Many jobs qualify for certain discounts. That’s because insurance companies may consider your line of work to be low risk for car accidents. Engineers, for instance, are often considered low risk.
Check with Professional Associations
Maybe you’re an AAA member. Maybe you belong to a small business association, or an alumni organization. Just like reserving a hotel room and discovering they have an AAA discount, you should check with any professional associations (as well as your insurance company) to see if you qualify for discounts.
Got good health insurance?
Then don’t worry about spending extra dollars for medical liability. While it’s not a bad idea to have medical liability, a good health insurance plan should cover you.
Take a Defensive Driving Course
You’ll get a discount if you can prove you took a defensive driving or drivers training course. Insurance companies want you to drive defensively, not offensively.
Encourage Your Kids to Do Well in School
If your children get better than a B average, and they’re driving age, make sure to report their scholastic achievements to your insurance company. They will often reward teens with good grades with discounts on insurance.
Are you eligible for a low-mileage discount?
If you can prove you carpool or otherwise find a way to drive less than 7,500 miles in your car per year, you’ll likely spend less when your policy payment is due.
Do you need roadside assistance?
This add-on to insurance can cost you more. If you’re not driving very far, or know someone willing to help you if you have a problem on the road, consider dropping roadside assistance.
When Buying a Car, Go Low Profile
Car insurance companies pay close attention to statistics related to car models. Not all cars are created equal. Some are more susceptible to being stolen. Some are safer than others. You can find out the top safety picks here.
If you live in a city and can prove you garage your car, you may be eligible for a reduction, since a garaged car is safer than one on the street. And think of the money you’ll save on parking tickets!
Buy Longer Policies
If you can, buy policies for a year instead of several months, as insurers prefer to have that chunk of money all at once. You may be able to negotiate better terms for even longer policies.
Pay Up Front
Similarly, instead of paying in installments, you will usually save by paying the premium for your policy all at once. Again, see if you can sweet-talk your agent into giving you even better rates for a one-time payment.
Maintain Good Credit
How do you even know if you have bad credit? Unfortunately, insurance companies check your credit when you apply for a policy. They want to make sure that you are financially responsible in addition to being a safe driver. It’s simple: better credit, lower rates.
Sometimes it’s best not to skip around on insurance. Make sure that you stay with a company for several years; a loyal customer is considered a lower risk than a new customer.
Keep Your Policy Up to Date with Significant Life Changes
Did you recently get married? Have you moved? Did you change your name and move to Guam? Don’t forget to update these things for insurance purposes; it could save you some cash.
Maybe insuring all your cars with the same company is a no-brainer, but make sure you’re taking advantage of other insurance services they offer, to improve loyalty and achieve the lowest rate possible across the board. Consolidate!
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Car Safety Features
Got airbags? What about side impact? Theft deterrent? While some of these things may be afterthoughts to you, they are important for nervous insurers to calculate your policy price.
Drop Collision Insurance
If your car has reached junk status, or you’re looking for an excuse to get rid of it, consider dropping collision.
Use Our Comparison Tool
Make sure you’re using our free car insurance comparison tool so you can see side by side what you’re getting for your money. Everyone’s coverage is different, so ensure you’re getting the best bang-up coverage for your buck.
Raise Your Deductible
Raising your deductible involves a bit of risk if you’re not a good driver because you’re going to spend more out of pocket in the case of an accident. But if you need to save some money right now, it might not be a bad idea.
Check Rates Before You Buy a New Car
Always make sure you get an insurance quote on several cars that you have an interest in purchasing. You may be surprised at the long-term cost of one car over another.
Become a Good Customer
Make sure that when you need insurance for your house, another car, or your prized comic book collection, to go through your current insurer. Overall, you’ll save money and gain good status with that company.
Shop Around Every Six to 12 Months and Before Your Policy Expires
Insurance companies usually know when your policy is going to expire, so if you’re in a hurry because your coverage is about to end, they’re going to jack up their rates, maybe by 15 percent. Be careful and plan ahead.
Ask for Discounts
It never hurts to try, so call your insurer up and see if there’s anything else they can do for you.
Use Your Credit Card
Auto insurance is a fixed cost. You should think about using a credit card that has multipurpose points rewards such as one from American Express. You’ll get thousands of points, built up over time. Plus, if you keep paying with credit, the points won’t expire until you do.
The insurance industry is a very competitive business, so make sure you are always willing to try new companies. Don’t be afraid to switch every once in a while; a new company just might save you money.
Enter your zip code in now for a free car insurance quote comparison from many top car insurance companies!