How To Lower Auto Insurance Premiums


Lower Auto Insurance Premiums

When it comes to lower auto insurance premiums, there are factors that you have absolutely no control over, but the good news is that there are a number of factors that you can control.

Most auto insurance companies consider these factors when they determine how much to charge you.

1. Vehicle Type

Each vehicle is assessed a different risk variable depending on a number of factors, including:

  • category classification
  • crash test rating
  • price
  • cost of replacement parts
  • horsepower-to-weight ratio
  • how often the model is stolen

If you want a lower premium you should avoid sports cars, expensive vehicles, newer vehicles, and those that are not considered to be top of class in safety (smaller vehicles). Each year, the National Highway Traffic Safety Administration (NHTSA) reports an insurance make and model comparison.

2. Pay In Full

Some insurers offer a discount if you pay your policy in full versus a monthly payment plan. If you have the cash (or a credit card) to pay in full, don’t worry about losing it if you cancel your policy early. Your insurance company is required to pro-rate your total bill and refund you for the days that you won’t be covered under them.

3. Good Drivers

Your driving record is still considered to be one of the top factors that insurance companies look at. An accident or a major traffic violation within the last few years can have a huge impact on your premium. Some car insurance companies look back three years, while others look back for five years.  If you have the opportunity to take defensive driving to remove a violation from your record, it’s highly recommended.

4. Cut your Miles

Some auto insurance companies will offer you a discount if you drive less miles. Moving closer to work might not only save you on fuel and commute time, but it may also decrease your auto insurance premium as well.  We offer Snapshot with Progressive that can save you up to 30% based on your mileage.  (And you can TestDrive it before you switch).

5. Improve Your Credit Score

Credit history is a highly valued variable that is being looked at by most insurance companies.  So anything you can do to improve you credit, could help with your auto insurance premiums.

6. Reduce your Coverages

Carrying collision and comprehensive coverage dictates how much your premium will be, but your decision to carry it should come down to how much your vehicle is worth.  If you have an older vehicle with a relatively low value, it makes a lot of sense to have a high deductible. It makes even more sense if you don’t have collision or comprehensive coverage to begin with – because there is not much else that would make the cost/benefit of having a low premium worth it.  Two options to lowering your premium:

  • Remove comprehension and collision on an older vehicle
  • Increase Deductibles

State requirements dictate the amount of liability coverage you carry, and we do not suggest lowering your coverage to the minimum to save money (it could end up being a big mistake should you get into an accident.) However, if your liability coverage is high and you are in need of cutting your premium, this might be one area to consider.

If you are insured with a preferred or standard carrier, uninsured motorist and PIP coverages usually are not a significant cost.  For non-standard drivers, the cost could be quite high.  Ask you agent to discuss benefits vs. cost.

7. Anti-Theft Device

Purchasing a vehicle with an anti-theft device will sometimes get you a discount.  But not usually enough to offset the cost of installing one.   If your vehicle has an anti-theft device, let your insurance company know.

8. Multi-policy Discount

Having multiple insurance policies with the same insurance company, or at least in the same agency, will typically save you money.  You may find that even though one insurance company would charge you more for auto or home insurance than another, your ‘total’ insurance cost to go with them is less when you look at the complete package.

9. Loyalty Counts

Loyalty can be rewarded when it comes to your auto insurance company.  That’s why a number of insurance companies will give you benefits the longer you are a customer.  Some in the form of continuous insurance discounts and/or loyalty rewards just for sticking around, such as accident forgiveness or deductible savings.

10. Additional Discounts

Discounts differ depending on the state in which your insurance policy is written and what your carrier offers. Here is a sample of the additional insurance discounts that might be available:

  • Advanced Quoting Discount
  • Education Level Discounts based on your education
  • Good Student (for young drivers with B or better GPA)
  • Pay As You Drive
  • Accident Free Discounts
  • Electronic Signature Discounts (E-Sign)
  • Bankdraft discounts
  • Paperless Discounts
  • Homeowner Discounts
  • Multi-car

See a full description of the discounts offered by one of our preferred carriers, Progressive.

How to Lower Auto Insurance Premiums