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Lower Your Car Insurance With These 13 Tips

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Drivers need auto insurance because it's required by most states, but also to protect their assets. For many people, it can be challenging trying to learn how to lower car insurance costs to get the best policy at the most affordable price. To help you out, we've put together 13 ways to save on auto insurance without compromising coverage.

Ways to help you get low car insurance rates

For drivers eager to learn how to lower car insurance costs, there are many things you can do that can save you a lot of money on car insurance premiums.

1. Choose cheap vehicles to insure

Vehicle choice plays a major role in how expensive insurance is. Vehicles with ample safety features are the cheapest cars to insure. Motorists may also want to avoid flashy cars that are attractive to thieves. Features such as anti-theft devices and airbags can also reduce the costs of coverage. Motorists looking to save on car insurance should consider prioritizing these features at the dealership.

2. Shop around for auto insurance coverage

Insurance policy premiums vary substantially by carrier. Any driver interested in determining how to get lower car insurance costs should shop around.

Comparing prices even after you have coverage can be especially important because 31 states allow a practice called "price optimization." That involves setting prices by taking into account factors other than the likelihood of a crash.

Many insurers in these states consider the likelihood motorists will switch coverage and price policies higher for some drivers if the company feels they're unlikely to change carriers. That's why it's important to get quotes from multiple companies to find which offers the most affordable prices.

3. Opt for a higher deductible

Insurance policies come with deductibles. After a covered event such as an accident or theft, insured drivers -- also known as policyholders -- must cover the car insurance deductible before the insurance provider pays. If a car sustains $5,000 worth of damage in an accident and the driver has a $1,000 deductible, the first $1,000 in repair costs must be paid by the policyholder. The insurer would then pay the remaining $4,000.

Drivers can save on car insurance premiums by choosing a higher deductible. However, before deciding this approach is a good way to reduce car insurance costs, consider whether it's possible to cover the deductible.

A motorist with a hefty emergency fund may be able to cover a large deductible without problems. But people living paycheck to paycheck and who may have to borrow to pay the $1,000 might be wise to go with the smaller deductible at a higher premium to protect against larger losses later.

4. Eliminate unnecessary coverage

When looking for options on how to lower car insurance costs, reducing coverage is one solution. This could mean choosing lower limits. For example, motorists might opt for $50,000 in liability coverage instead of $100,000.

This is often not the best approach. Choosing coverage that's too low puts assets at risk. A driver who causes a serious accident but who has insufficient insurance could be personally liable for covering damages to victims that insurance won't pay for.

A better approach to determining how to save money on car insurance would involve eliminating redundant coverage. That's coverage that's not necessary. For example, a driver who has roadside assistance through AAA may not need it through an insurer.

Motorists with very old vehicles may not need comprehensive or collision coverage either. That's because the market value of the car may be so low the insurance provider would pay little or nothing toward replacing it.

5. Bundle insurance policies

Bundling policies is an easy solution for many people interested in exploring how to save money on car insurance. Bundling coverage simply means buying multiple policies from the same insurance company. For example, it could involve purchasing both homeowners insurance and car insurance.

This approach can provide savings both on the auto policy as well as on any other insurance included in the bundled coverage.

6. Maintain a good credit report

It may seem surprising that credit would have any impact on how to lower car insurance costs. But insurers calculate an "insurance score" based on information in credit reports.

A long credit history can help reduce a driver's auto insurance rate. So too can on-time payments and limited use of available credit. These factors suggest a history of responsible behavior.

Many accounts in collections, on the other hand, could suggest irresponsible behaviors. So could past due payments and rejected credit applications. These could make a motorist riskier to insure.

7. Complete a defensive driving course

Insurers price policies based on the risk of accidents occurring. Motorists exploring options for how to lower car insurance often focus on convincing insurers an accident is unlikely. Completing a training course is a common way to reduce collision risks. Most insurers offer a defensive driving discount for drivers who have received recent driver education.

8. Sign up for apps that track driving

A growing number of insurers allow drivers to download apps that track driving behavior. When these apps show safe, responsible actions behind the wheel, insurance premiums are lower. For motorists who don't mind providing this information to insurers, this can be one of the easiest and most effective ways to save on car insurance.

9. Mention all memberships

Memberships in organizations or employment relationships could be the answer for motorists interested in determining how to lower car insurance costs. That's because many insurers offer car insurance discounts to people in certain groups. Discounts may also be available for individuals who work for specific companies. Always ask insurers what types of membership discounts are available. And list all organizations when applying for coverage.

10. Earn good grades

For young drivers, figuring out how to lower car insurance costs can be even more essential. That's because policies for teen drivers or for new drivers can be very expensive. Most insurers do offer good student discounts, though. Earning a good GPA could make a big difference in premium costs. This often means a B grade-point average or higher.

11. Drive less

The more miles a motorist drives, the greater the chances of a collision. As a result, frequent drivers face higher insurance premiums. Limiting miles driven is one answer to the question of how to lower car insurance costs

12. Stick with the same insurer

Even though it pays to shop around, loyalty to an insurer can also be a solution for how to lower car insurance costs -- in some cases. That's because many insurers offer discounts for drivers who remain covered over long periods. Some insurers also offer other perks, such as a diminishing deductible. This reduces the deductible cost for each accident-free year. These types of programs enable policyholders to get more coverage for less money.

13. Avoid accidents or tickets

Finally, a clean driving record is essential for anyone wanting to learn how to lower car insurance costs. Accidents, drunk driving arrests, or moving violations can all send premiums soaring.

RELATED: See The Ascent's guides to the best cheap car insurance and best car insurance companies.

FAQs

  • Some insurers offer loyalty discounts or safe driver discounts. These can result in a periodic reduction of car insurance premiums. However, it's not common for insurance premiums to decrease every single year. Motorists hoping to save on coverage shouldn't count on automatic discounts. Instead, it's best to shop around each year and see which insurer charges the best rates.

  • Car insurance premiums vary depending on many factors. These include driving record; homeownership status; gender; marital status; and location. The amount each motorist should pay will be based on their personal history. Drivers who want to determine how to lower car insurance costs should compare quotes from multiple insurers to ensure they pay a fair rate.

  • Paying car insurance every six months can be one potential solution for motorists interested in options for how to lower car insurance costs. That's because insurers often offer discounts to people who pay annually or who pay every six months, rather than on a monthly basis.

  • There's no guarantee rates automatically decline after age 25. That's because getting older isn't the answer to how to lower car insurance. Car insurance costs can be reduced as motorists gain more driving experience. A motorist's driving record and number of years of driving matter more in determining premium prices than age alone.

  • Drivers need to determine for themselves what deductible is best for them. This involves considering the tradeoffs involved.

    A higher deductible is one answer to the question of how to lower car insurance costs. But a higher deductible means it would be necessary to pay more out of pocket in a collision. After an accident, a motorist with a $1,000 deductible would have to pay $1,000 before the insurer covered losses. A motorist with a $500 deductible would pay half that amount.

    However, policies with lower deductibles have higher premiums. So drivers who want to reduce the chances of a high out-of-pocket insurance cost after an accident must pay more for their coverage each year.

  • Insurers don't typically negotiate rates with individual drivers. However, they offer a variety of discounts. Motorists may be able to save due to their membership in certain organizations. Premiums could also be reduced due to a safe driving record or the completion of defensive driving courses. Those interested in determining how to lower car insurance costs should ask insurers about opportunities to save.

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