How to Save Money on Automobile Insurance

Red car beside three over-sized coin stacks.Everybody loves saving money, especially when it comes to things we are required to have. If you drive a car, truck, SUV, or similar type of vehicle, then you must obtain and keep car insurance in nearly every state. This, of course, comes at a cost, which can be expensive if you have a less than perfect driving record, receive unnecessary coverage or don’t shop around.

Furthermore, many drivers who are already covered don’t realize how much money they can be saving on what they are currently paying for auto insurance coverage. Here are 6 steps you can take to bring down this necessary bill.

6 Tips for Saving Money on Auto Insurance

1. Shop Insurance Companies

As with anything, price varies from insurer to insurer, even for similar policies. Many companies can provide quotes quickly over the phone or online, making it easier than ever to get various quotes in a matter of hours. Be sure to get quotes for the same amount of coverage so you can compare accurately. You may be surprised at the differences between insurance company prices for the exact same coverage.

However, price alone shouldn’t be the only determining factor when choosing an insurer. You want to take the time to understand how the insurance company has worked with customers in the past. Ask around to see if any friends or family currently use the company or read up on the different review sites online.

Above and beyond customer service, insurance is meant to provide some peace of mind. Should you need policy benefits in the future, you want an insurance company that will be there to help and able to pay claims. These factors, plus pricing, should help you determine your best car insurance options.

2. Choose Higher Deductibles

Your deductible is the amount paid by you, out-of-pocket, when the insurance company covers some benefit covered in the policy, like getting into an accident. This is in addition to the regular annual premium, and many policies offer deductibles ranging from $0 to $1,500.

If you request a higher deductible, you will be responsible for more of the cost in the event of a claim; however, the insurance company will compensate for you taking on greater risk by offering lower-cost insurance premiums. For example, choosing a $500 deductible over a $0 deductible can reduce monthly coverage costs by 5-10%.

It is important to understand that a higher deductible means a higher out-of-pocket expense for you in the event an accident occurs. You will want to set aside some funds for this potential expense.

3. Reduce Coverage on Older Cars

The main types of auto insurance coverage, collision and comprehensive insurance can often be dropped on older cars. A general rule of thumb is that if the car is worth less than ten times the deductible, having this coverage is not cost-effective. Eliminating these coverage options brings down the insurance premium.

4. Buy Auto Insurance with Homeowners or Renters Coverage

Many insurance companies give package discounts if you carry multiple policies with them. Also, many offer discounts for having multiple vehicles covered under the same company. Although they may offer discounts, it is still important to shop around insurers, insurance brokerages, and even individual agents as greater savings may be found elsewhere.

5. Maintain Good Credit Rating

Your credit rating is often a major factor in the rate the auto insurance company ultimately charges. Maintain a good credit score, and you are likely to have lower rates.

6. Obtain Other Discounts

Beyond the above tips, insurers offer a wide variety of discounts for many different things. These other discounts vary greatly from one insurance company to the next, so one is best served by asking about the following when shopping around:

  • Good student discounts
  • Installing car alarms
  • Defensive driving courses
  • Drivers ed courses
  • Long-time customer
  • No accidents in the past 3 years
  • No moving violations in the past 3 years

Armed with your new knowledge, you should be best prepared to lock in the best vehicle insurance policy for your situation.

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Posted on May 26, 2021 by in Auto Lending

Comments & Discussion



2 Responses to “How to Save Money on Automobile Insurance”


  • On December 4, 2020, Wesley LeFebvre wrote:

    Hi Rose, I’d recommend getting in touch with Chemical Bank to be sure, but I’m fairly confident you’ll still be required to carry full coverage. Unfortunately.

    Full coverage car insurance consists of the following:

    Comprehensive insurance – pays for damage to your car from hail, flooding, falling objects, fire, vandalism, or animal collisions, and also covers theft
    Collision insurance – pays for damage to your car regardless of who caused the accident
    Liability insurance – pays for property damage and injuries to others in accidents you cause

  • On December 4, 2020, Rose Boyle wrote:

    What insurance is required on auto in storage? Has loan of $6000.00 with Chemical Bank.




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