Whenever you’re financing a vehicle, full coverage auto insurance is a must – but that coverage can get pricey. If you’re looking to cut down the cost of your car insurance, we have ten money-saving tips just for you.
10 Ways to Save Money on Auto Insurance
Not all tips are going to be applicable to everyone since insurance companies and state regulations vary. However, all of them are at least worth talking to your potential/current insurance agent about. It doesn’t cost you anything to ask questions!
1. Consider a high deductible
A higher deductible means a lower premium (your monthly payment). However, know that the higher your deductible, the more you need to pay upfront before your auto insurance kicks in. An average car insurance deductible is usually around $500. If your premium is too expensive, you may be able to get a deductible of $1,000 or even higher, which can help lower monthly costs.
But the higher your deductible, the less the insurance company pays when something happens. A high deductible means having to shell out more cash if something happens to your car, so having a little extra in savings stored away to cover your high deductible would be wise.
2. Shop around
You can’t know what rates are available to you if you don’t shop around! There are many insurance companies out there, and getting multiple quotes can help you decide where the most savings could be.
You can usually get free quotes from insurance companies before you finalize your vehicle purchase. Remember that most dealerships require that you have proof of auto insurance or an insurance binder before you can drive the car off of their lot!
3. Good student discount
Have a teen driver that’s on your policy? Check their grades because if they’re a good student, you could qualify for a good student discount and save cash depending on your insurance company. This isn't available on all policies or from all insurance agents, but typically, a teen with a GPA of 3.0 or higher may get you those savings. Expect to show proof of their academic achievements as well.
4. Take a defensive driving course
Some insurance companies offer discounts for drivers that have taken a defensive driving course. The cost of a defensive driving course could be anywhere from $15 to $100, and online courses could be even cheaper. Passing a defensive driving course could get you a discount for up to three years, but this varies. Savings vary too, but you may save up to 20% on your insurance coverage in some cases.
5. Drive safe
Having a clean driving record is a good way to save money on your insurance costs, but hindsight is 20/20. If you already have some moving violations or accidents on your driving record, know that moving violations typically fall off after three years. Some convictions on your driving record can remain for up to seven years in certain states. With some time, those negative marks fall off and save you cash when you’re paying for car insurance.
While avoiding accidents is typically a high priority on the road, remembering your wallet and insurance costs while you’re driving your car could be an extra incentive for staying safe.
6. Consider your vehicle type
As a general rule of thumb, new vehicles cost a little more to insure than older ones, because they have more expensive bells and whistles that can get costly to replace in the event of an accident. The more costly a car is to repair, the more it may cost you to insure. Newer vehicles are also more likely to be stolen, which can up the insurance cost.
Another thing to consider is the type of vehicle you’re insuring. Trucks and SUVs may cost you more to insure, while an older used sedan may save you some dough.
7. Purchase a vehicle with a clean title
Cars with branded titles such as flood, salvage, rebuilt, or lemon, may be more costly to insure. If your vehicle’s title is anything but clean, then you may be facing a higher premium. If you’re shopping for your next car at a dealership, it’s unlikely that you’re going to encounter a branded title vehicle.
8. Bundle your insurance
Many insurance companies offer coverage options on your home, rental, and car. If the insurance company you’re shopping with offers bundle options to save some money, look into it! Additionally, if you have multiple vehicles all bundled under the same policy, you could save some more cash.
9. Check out low-mileage discounts
Since 2020, it’s no secret that many people have been driving less. If you’re still working from home, or your commute has always been short, then look into low-mileage discounts. States vary on what's considered low mileage, but generally, it's around 15,000 a year. While you’re getting quotes from insurance companies, ask what they consider low mileage and see if you qualify for a discount based on how much you drive.
10. Raise your credit score
Some states allow insurance companies to charge bad credit borrowers more for auto insurance. If you have a credit score of around 660 or below, you may be considered a bad credit borrower. When your credit score is low, it may cost you more to insure your vehicle depending on your home state.
Ready to Start Car Shopping?
You may already have a vehicle in mind, but with a lower credit score, it can be tough to get an auto loan approval. Bad credit borrowers often face challenges getting their hands on the vehicle they need, but here at Auto Credit Express, we want to lend a hand.
We’re connected with dealerships all over the country that are signed up with subprime lenders – lenders who specialize in assisting borrowers with less than perfect credit. To get matched to a dealer in your local area that has bad credit lending resources, fill out our free car loan request form.