14 Simple Ways to Lower Your Car Insurance Premiums

Insurance premiums may be going up, but there are ways for car owners to keep their costs down.
Last updated Jan. 31, 2022 | By Jenny Cohen | Edited By Michael Kurko
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Car insurance can be a big-ticket item when looking at your monthly budget, and that cost is going up for car owners. According to a recent study, auto insurance rates increased 28% since 2011, and 3% between 2020 and 2021 alone. So how can you get your costs down? Here are a few simple options to consider. 

Take a defensive driving course

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Defensive driving courses can teach you how to handle emergency situations, road rage, and stress while driving. By taking a course, drivers can reduce their risks on the road. Fewer risks mean fewer claims an insurance company has to pay out. And depending on the state you live in, insurers like Progressive will offer 5% to 15% off your premium for taking a defensive driving course.

Bundle your insurance policies

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Many of us have more than one insurance policy. We may have homeowners, renters, or life insurance, or policies for other vehicles, like motorcycles or boats. Look into the different types of insurance covered by your provider and see if they offer discounts for bundling all your policies together.

Increase your deductibles

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If you’re a safe driver, this may be a good option to help you save a little in monthly costs. For example, raising your deductible from $200 to $500 can reduce your premiums. But be aware of the downside. If you get into an accident or need a repair, you’re going to have to pay that deductible out of your own pocket before your policy kicks in.

Improve your credit score

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Good credit can help with financing a new home or car, get you a better deal on a student loan, or make it easier to get approved for a credit card. Similarly, auto insurance providers take a look at your credit history or use a credit-based insurance score before offering you a quote. As a result, having a good credit score may help you save on your car insurance.

Review your policy

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If you have an older car, you can lower your car insurance premiums by reducing your coverage. For instance, if your car is only worth $1,000, it might not make sense to pay $500 per year for collision insurance since your insurer will likely consider the car totaled if you get into an accident. You can also contact your insurance agent to see if there are any other add-ons you can drop from your policy.

Downsize your vehicle

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The physical size of your vehicle is actually a factor that insurance companies consider when calculating your rate. The larger the vehicle, the more likely it is to cause damage to other cars in the event of a collision. That means more money the insurance company will have to pay out if you’re responsible for a crash.

Shop around

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Buying insurance is just like buying any other high-ticket item. There are many factors insurance companies consider when determining the best rate for you, but each company may use different calculations to figure out your plan. Check with more than one provider and don’t be afraid to switch policies if you find a better rate and coverage.

Read our guide to the best car insurance companies.

Move to a different area

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Location isn’t just something to consider when buying a house. Where you live can have a positive or negative effect on your car insurance policy. Areas with higher car theft rates or more accidents tend to also have higher automotive insurance rates.

Avoid accidents and fines

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Being a responsible driver and following the rules of the road really can save you money on car insurance. Insurance providers will adjust the cost of your policy — and not in a good way — if you cause an accident or get a ticket for a traffic violation. So be safe and follow the law, and you can keep your costs down.

Track your driving

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Some insurance companies offer usage-based insurance that tracks your driving and then adjusts your policy costs accordingly. Using a mobile app or device plugged into your car, insurance companies can track your mileage, how hard you brake, or what time you usually drive. Then they can take that information and adjust your policy depending on how safe a driver they think you are.

Take mass transit

Michael DeFreitas/Danita Delimont/Adobe People taking the subway

If you’re not driving your car, you’re not putting it at risk. Leaving your car in the garage and taking a bus or train on occasion means you’re keeping your car safe from any potential issues that could lead to filing a claim with your insurance company.

Install anti-theft devices

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A major cost for insurance companies is replacing a stolen vehicle. Anti-theft devices such as a GPS tracker, car alarm, or even a lock for your steering wheel may help you reduce the cost of insurance from your provider.

Cut back on miles

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Do you really need to be taking another trip to the grocery store? Or have you thought about finding a work-from-home job to cut out your commute? Maybe you’ve decided to move closer to an area with more walkability. Little changes to how much you use your car can add up to a low-mileage discount with insurance providers. You may get some extra exercise out of it too.

Look for group discounts

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Insurers try to incentivize organizations by offering special group discounts that you can take advantage of. An insurance company may have a deal to provide a discount to alumni of the school you graduated from or a professional organization you belong to. Also, keep an eye on your corporate employee portal for new deals being offered to your company’s workers.

Bottom line

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As insurance rates fluctuate, understanding how car insurance works can help you choose a policy that fits your budget.  Compare their costs to other insurance companies to see if there’s a better — and cheaper — plan for you. 

Learn more about how to save money on car insurance.

  • Save up to $500 a year on your car insurance
  • Compare dozens of providers in under 5 minutes
  • Fast, free and easy way to shop for insurance
  • Quickly find the perfect rate for you

Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.