After going through your expenses, you might notice some trends. Your highest expenses are likely rent/mortgage, food, and transportation costs. Among transportation costs is your car insurance premium. If you feel you’re paying too much for car insurance, you might be trying to figure out how to lower your car insurance cost. If you want a lower rate for your car insurance premium, here are 10 tips to get started.
1. Understand your current coverage
The first thing you want to do is understand your current car insurance policy. You want to see where you currently stand, so you can evaluate whether the coverage and limits you originally purchased are still the right fit for you.
You might have purchased your policy when your lifestyle was different. For example, if you are now driving an older car, you might not need as much coverage as when you had a newer model vehicle. Once you understand your current coverage, you can make an apples-to-apples comparison with other available policies to make a more informed financial decision.
2. Switch to pay-per-mile car insurance
In many cases, if you have traditional car insurance, you pay a flat premium per month (or per term). This can mean that if you don’t drive that much, you may be overpaying for coverage. Car insurance is based on numerous factors that include risk assessment and vehicle use. Obviously, every time you start your car and get on the road, there’s a level of risk.
So naturally, if you drive less, there’s less risk. So why not reward yourself for that and pay less for insurance at the same time?
Using pay-per-mile insurance, you can do just that. If you drive less than 10,000 miles each year, you could be a good fit for pay-per-mile insurance and be able to slash your car insurance premium significantly. In fact, Metromile customers were able to save up to $947* after making the switch.
3. Compare rates among car insurance providers
Are you satisfied with your car insurance rate? Or do you want a way to figure out how to lower your car insurance rate? If it’s the latter, it’s important to take the time to comparison shop. You may have purchased a policy with your car insurance provider years ago based on a family or friend recommendation, but there may be better coverage out there now. Be sure to check among various car insurance providers to see prospective rates. You can look at traditional car insurance vs. pay-per-mile insurance and assess what is best for your unique situation.
4. Make a switch and downsize your car
Here’s something you may not want to hear. The type The type of car you have could be costing you more. Why? If you have a bigger or more luxurious vehicle, it’ll be more expensive to insure. If anything were to happen, the replacement costs would likely be higher. Additionally, costs can be higher with bigger vehicles because of the potential damage done to other cars in the event of an accident. If you downsize to a smaller or more fuel-efficient car, your car insurance costs may be reduced.
5. Increase the deductible
If you have a good driving record and very rarely get into accidents, you could increase your deductible to save money on your car insurance. You generally pay more for car insurance if you have a lower deductible.
Keep in mind that your deductible is how much you need to pay before your insurance kicks in. For example, if your car needs $1,500 in repairs and your policy has a $500 deductible, you’ll be responsible for paying $500 before your insurance covers the remaining $1,000. If you increase your deductible, you might want to consider saving money to make sure your emergency fund could cover the difference to avoid any unwanted surprises later on.
6. Ask for discounts
A simple way to lower car insurance is to ask for discounts! (yes, really). It often goes unnoticed, but insurance companies have different discounts available depending upon your personal situation. When you signed up, you might have been unaware of the potential discounts that you qualified for.
Additionally, your situation may have changed since you first purchased your policy, and you may now qualify for a discount.
A common car insurance discount is a multi-vehicle discount if you insure more than one car on the same policy. There are also rate reductions available in some states based on the type of job you have, whether you’re married, or there may be rewards for being a safe driver. These discounts can add up, so it’s worthwhile to call your insurer to see if there are any available discounts you may qualify for.
7. Review a car’s safety and anti-theft features
Your car’s unique safety and anti-theft features can help you score a lower car insurance premium. Your car’s airbags, anti-theft devices, brakes, and more all affect the overall safety of your car and can also affect how likely the car is to be stolen. If you reduce some of these risks by adding more safety features or getting a car that already has these features, you may be able to reduce your car insurance rate.
8. Consider temporarily changing your coverage
Your car insurance policy should work for you. Fortunately, Metromile and some other insurance companies let you personalize your policies, including your coverage limits and totals. You can ask your insurer about any optional coverage unique to your state that you could temporarily reduce to help you save, for example.
Also, if you finance your car, review your financing information, as your lienholder or lease company could have coverage requirements or require you to let them know if you make any changes to your insurance policy.
If you do make any changes, make sure you remember to review your policy again later. You don’t want to get caught without the coverage you might need when you return to your usual driving habits.
9. Enroll in a defensive driving course
Defensive driving courses aren’t just for new drivers. If you want to learn how to lower your car insurance, enrolling in a defensive driving course may help.
This may also help you lower your driver’s license points in the case of a traffic ticket. Some insurance companies may reward you for taking a proactive role in promoting driver safety.
10. Boost your credit
There are various factors that can affect your auto insurance rate. In some states, insurers use your credit information to assess overall risk.
If you want to learn how to lower car insurance, it’s best to boost your credit rating, so it doesn’t negatively impact your car insurance premium. Your best moves are to pay your bills on time and keep your overall balances low compared to your credit limits. Be mindful of borrowing too much and opening up too many new credit accounts in a short period of time.
The bottom line
If you’re wondering how to lower your car insurance, use these ten tips to help you get the best insurance rate possible. If you’re a low-mileage driver, your best bet might be to switch to pay-per-mile insurance coverage. If you’re still paying for miles you aren’t actually driving, it’s time to re-think your auto coverage. Grab a free quote with Metromile today to see your potential savings.