The Top 6 Ways to Lower Your Car Insurance Bill

Keeping these tips in mind can help you stay on top of your auto insurance costs

It can be hard right now to cover current expenses. Many of us are looking for new ways to reduce our spending and find easy ways to save money. One place you shouldn’t cut is car insurance, as you’ll need it if you ever get into an accident. Fortunately, car insurance doesn’t have to be expensive.

Consider these six steps to help lower your car insurance bill.

1. Understand your current coverage.

It’s important to understand your current policy. You will want to know where you currently stand, so you can evaluate whether the coverage and limits you originally purchased are still right 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 than when you had a sports car. 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. Check rates often.

Don’t forget to shop around for car insurance. Car insurance prices can change over time, so this is a situation where set it and forget it might not work well for your wallet. The fact is car insurance premiums can vary among insurance companies, even for the same levels of coverage.

A good way to make sure you have a good rate is to consider pay-per-mile car insurance like Metromile. Because you only pay for the miles you drive, you could pay less for car insurance when you drive less. It’s like an automatic discount because your coverage adapts to your lifestyle.

3. Ask for discounts.

It often goes unnoticed but insurance companies have different discounts available. When you signed up, you might not have known you were eligible for some discounts, or your situation may have changed since you first purchased your policy, which now qualifies you to save.

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 based on the kind of job you have, whether you are married, or rewards for being a safe driver. These discounts can add up, so it can be worthwhile to call your insurer to check for any discounts for which you might be eligible.

4. 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 a bad surprise later.

5. 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.

Each state has minimum requirements, so don’t get too overboard with any reductions. You’ll need to keep the minimum coverage and limits required by your state so that you don’t have a lapse in coverage. Similarly, 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.

6. Drive an older car.

The car you drive affects how much you pay for car insurance. Generally, if you have an older car, you’ll pay less than if you had a newer or luxury car. Older cars tend to be cheaper to insure because their car parts are more widely available, and the value of cars tends to decrease over time.

If you have an older car, you could also drop optional coverage that you might not need. For example, if your car is worth less than your deductible, you could end up spending more money than the repair. In this case, it could be more economical to stick to your state’s minimum requirements.

Bottom line

Car insurance is often one of the biggest expenses, but it’s not something you should ever go without if you have a car. However, you don’t have to pay too much to get the coverage and experience that you deserve.