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15 Ways to Save on Car Insurance

By: Financial Hotline
Winter 2023 (Vol. 40, No. 4)

For most of us, insurance takes a big chunk of our money every month. It is also one of the most common expenses where we neglect to take advantage of ways to save. Here are some key points to consider:

1. Shop Around. Look at it the same as you would when shopping for a new washing machine or Television. Get quotes from a variety of carriers. Differences in prices can vary greatly. Online sites like or can help you compare.

2. Ask for Discounts Offered. Common price breaks are based on bundling auto and home policies, your location and how many miles you drive. However, you may also qualify for a lower rate based on random circumstances like where you work, where your car is usually parked or what organizations you are a member of.

3. Avoid tickets and accidents. Of course, an insurance company doesn’t want to pay claims, so following traffic rules and driving safely will help you get the best rate and keep it.

4. Location. When you are calculating the cost or savings of a move, make sure you compare the cost of insurance. Policy rates are based on the zip code where you live. If the new area has a higher claim history, you will pay more for the same coverage.

5. Take advantage of Low Mileage Discounts. Update your insurer if a change in job or other circumstances lower the miles you drive daily. Driving fewer miles decreases your accident risk and your premium.

6. Maintain your Credit Score. Higher insurance rates are one more disadvantage in letting your credit score slip. If you have recently improved your credit score, update your insurer, and see if you qualify for a lower rate.

7. Compare prices on a Higher Deductible. Do the math. If increasing your deductible by $500 saves you $800 in premiums per year, it makes sense to take the higher deductible and put the extra you would have spent on premiums in your emergency fund each month. Chances are you won’t be faced with paying a deductible every year. If you can save $50 per month by increasing your deductible an extra $1,000 and end up paying a deductible every 3 years, you still saved $800 in premiums.

8. Use Based policy. If you have a care that is only used sporadically you may benefit from a Pay-Per-Mile policy. You pay a basic rate each month and then a small fee for mileage if you drive the car that month.

9. Put your Driving to the Test. Using a telematics device that plugs into the OBD II port under your dashboard, your insurance company can track when you drive, how far you drive, and your driving habits. If you accelerate aggressively, brake hard, or trigger advanced safety systems, such as stability control or automatic emergency braking, your insurer will know and base your risk assessment on the results. If you are a conscientious, meticulous driver who is getting hit with high-risk rates, this may be helpful But for some folks, this may be a bad idea.

10. Review your Policy Carefully. Don’t pay for coverage and add-ons that you don’t need. Some insurers automatically add road assistance or gap insurance that you may not need.

11. Don’t Pay More in Premiums than your Vehicle is Worth. Check the value of your vehicle and do the math. If the value of your vehicle has declined to the price of or less than the yearly comprehensive and collission premium and you are financially able to replace your vehicle out-of-pocket you should consider removing this coverage from your policy.

12. Paper Statements, Auto Debit and Payment in Full. Ask your carrier if they offer discounts for different payment methods. You can also pay your bill with a cash back reward credit card. But be sure to pay the balance in full each month or the interest will overcome any savings.

13. Check Insurance Rates Before you Buy. When comparing vehicles, don’t forget to get an insurance quote. It may cost a little more for that car with anti-theft or advanced safety systems but if it translates to monthly discounts in the future, it may be the cheaper option in the long run.

14. Get a Short Loan and Make a Big Down Payment. Doing so keeps your loan to value (LTV) ratio low, and lets you avoid the need to purchase gap insurance.

15. You Don’t Always Have to Make a Claim. If there are no injuries, the damage is minor and doesn’t include anyone else’s property, you may not need to call your insurer. Visit a repair shop and get an estimate first. If the estimate is less than your deductible, it may not be worth filing a claim and risking an increase in your premiums.