5 Simple Ways To Reduce Auto Insurance Bills

If you own a car, auto insurance is a must. And those insurance costs can add up. But doing these five things will help keep the costs manageable.

by Michael David

Auto insurance is a must. In almost every state across the US, at least some level of auto insurance is mandatory. But just because insurance is required doesn’t mean it can’t be affordable. Since you will be paying for auto insurance for years to come, here are five simple ways to reduce those costs.

1. Increase your deductibles.

You can’t predict the future, but if you have a good driving record and are confident in your skills, you could consider increasing your deductible. A higher deductible means that you will bear more financial responsibility in the event of an accident. But your monthly payment will be reduced because you are willing to take on more responsibility.

Make sure the amount is still something you can afford, but if you are a traditionally safe driver, an increased deductible will likely save you money over time.

Related: Is Raising Your Insurance Deductible a Good Idea?

2. Choose the right car.

When purchasing a new car, there are many things to consider, including the handling, transmission, gas mileage, and maintenance costs. But don’t forget to consider the price of insurance.

Not all cars are created equal, even in the eyes of insurance providers. Vehicles that are more expensive to repair or, more commonly, stolen models will have higher premiums. Before choosing a Porsche over a Prius, make sure you can afford a higher insurance premium.

3. Ask about discounts.

Not all insurance providers offer discounts, but many do, so don’t forget to ask about them. You can often get discounts if you insure your home and car through the same provider, if you are a military member, or if you take a defensive driving course. Did you know that there are even discounts for teens with good grades? Ask your insurance agent what discounts they can find for you.

4. Drive less.

Insurance providers consider many factors when determining your premium, but how much you drive is one significant factor. The reasoning behind this is pretty simple. The more you drive, the more likely you will be in an accident.

If you commute, car insurance will cost much more if you drive every day than if you use public transit. Find ways to reduce your mileage by carpooling, working from home or using public transportation. You will contribute to protecting the environment, decrease your chances of being injured in a traffic accident, and save yourself money on premiums.

5. Don’t pay for things you don’t need.

You need insurance, but you don’t need ALL the insurance. Assess your situation and choose the right insurance for your needs.

You might not need to include personal injury protection if your regular health insurance covers the same things. If you already have roadside assistance through your credit card or manufacturer’s warranty, you don’t need to pay extra on your insurance premium. You probably don’t need comprehensive coverage if you drive a $1,500 beater car.

Be smart about your specific situation and avoid duplicating coverage or paying for unnecessary services.

Insurance costs can add up, but doing these five things will help you keep the costs manageable.

• If you are a homeowner, make sure you know everything you should about homeowners insurance.
• Find out if you should buy home and auto insurance endorsements.

Reviewed November 2024