Lowering Auto Insurance Costs When You Can’t Seem To Find Any Savings

by Andrea Norris-McKnight

Over the past several months, I’ve received a few emails from readers who have tried much of the conventional advice offered for lowering auto insurance rates but have been unsuccessful in lowering costs. So, you’re not alone if you’re feeling the pinch of rising car insurance premiums and frustrated you can’t find any savings. Inflated insurance rates have many drivers seeking uncommon ways to save on auto insurance policies without compromising coverage.

If you feel you’ve exhausted all avenues of savings, there still may be strategies you can employ to lower your car insurance costs and keep more money in your pocket.

Why Is Car Insurance So Expensive Right Now?

According to expert sources such as the Insurance Information Institute and the Congressional Research Service, there are three primary reasons we’re experiencing a significant increase in auto insurance premiums:

• Severe Accidents: An uptick in the number and severity of accidents has led to higher claims payouts for insurers, prompting them to raise premiums.
• Supply Chain Issues: Ongoing supply chain disruptions have made vehicle parts and repairs more expensive, and insurers have adjusted their premiums to account for these higher expenses.
• Advanced Vehicle Technology: Modern vehicles are equipped with sophisticated technology and electronics, making repairs more complex and costly, which insurers must factor into their pricing models.

Uncommon Ways To Save on Auto Insurance

While you may already have the best rates available, even if significantly higher than a few years ago, the following tools could potentially help you find some savings:

Use an Auto Insurance Broker

Nowadays, it’s not uncommon to shop for auto insurance online. This article includes a tool for doing just that. However, these tools aren’t designed to evaluate specific needs based on your financial situation, such as your net worth or the amount you have in emergency savings. Considering such factors can help ensure you have the right amount of coverage and a cost-effective deductible.

For instance, the higher your net worth, the more liability coverage you may need to protect your assets in case of an accident. You may be underinsured. Or maybe you’re overinsured if you have a lower net worth. Regarding your emergency savings, if you have a substantial balance, you may be able to choose a higher deductible to lower your premium. (See Is Raising Your Insurance Deductible a Good Idea?)

An auto insurance broker can help you assess your needs, making it less likely you aren’t under or overinsuring. The broker can also do the comparison shopping for you, possibly finding you more significant savings than you can find on your own.

Some brokers work with several insurance companies, while others work with a single company. Some charge fees and others work solely on commission. If you’ve never worked with a broker before, do some research to learn more about their role in the insurance-buying process and how they might be able to help you save.

Review Your Driving Record

Your driving record significantly affects the amount you pay for auto insurance, and drivers considered high-risk (unsafe) will pay more. But just as your credit report can contain errors, your driving record can also contain inaccurate information.

Review your driving record regularly and address any errors or misrepresentations promptly. Contest incorrect violations or accidents that could be impacting your insurance premiums.

Each state varies in how you can obtain your driving record and correct errors. Search online for the steps to take in your state. If you correct any inaccurate information, follow up with your insurance company to see if the correction will lower your premiums.

Review Your Auto Insurance Claim History

Check with your insurance company to determine if any claims have increased your rates and get details about any claims. I once filed a claim to replace my windshield after a small rock cracked it. The claim was coded incorrectly in the system due to an accident and my rates increased. The error would have gone unnoticed if I had not questioned the increase. Once my insurer updated the claim code, my premium returned to the previous rate.

Take a Defensive Driving Course

Check with your insurer to determine if you can get a discount for taking an approved driving course. Completing a driving course is a commonly suggested strategy for saving on auto insurance, but few people take the time to take advantage of this discount.

Consider Pay-Per-Mile Insurance

A pay-per-mile policy could be a good fit if you work remotely or otherwise don’t drive often. With this type of insurance, you’re charged a flat daily rate with an added per-mile surcharge (typically a few cents per mile). There is a tradeoff in privacy since most pay-per-mile programs require drivers to attach a device that tracks their vehicle’s mileage, speed, acceleration and braking distance, but it might be well worth the savings.

Pay Your Annual Premium Upfront

Many insurers charge a fee for dividing your premium into monthly installments. However, according to car insurance comparison site The Zebra, paying the entire balance upfront could save you up to 4%.

If you have room in your budget, consider starting a sinking fund and saving for your next premium renewal so you have the money to pay the balance in full rather than in monthly installments. And if you still receive a paper statement in the mail, see if you may get a small discount for opting for e-billing.

Take Steps To Prevent Future Rate Spikes

When auto insurance companies incur higher costs, as they have over the past few years, you may experience a rate increase that is out of your control. However, some rate hikes are controllable, and you can take steps to prevent them.

Maintain a Clean Driving Record

A clean driving record might not help you get a lower premium right now, but it can help prevent your premiums from skyrocketing down the road due to traffic tickets, accidents, and the loss of any safe driver discounts you may earn.

Improve Your Credit Score

In most states, your credit score impacts the cost of car insurance since insurers use credit-based insurance scores in their underwriting process. Improving your credit score by making on-time payments, paying down debt and using credit responsibly can help you appear less risky to insurers and potentially qualify for lower rates.

Related: The Right Steps To Take To Rebuild Your Credit Score

Buy an Insurance-Friendly Car

The type of vehicle you drive plays a significant role in determining your car insurance rates. Generally, less expensive cars with lower repair costs and fewer advanced features tend to be cheaper to insure.

Buying a new car doesn’t make financial sense just to save on auto insurance. But the next time you are in the market for another vehicle, do your homework to determine which makes and models are insurance-friendly and which usually come with higher insurance premiums.

The Key To Lower Auto Insurance Premiums

Right now, the key to lower auto insurance premiums may require some legwork — diligently evaluating your unique circumstances, exploring all available options and implementing a combination of these tips that best suits your needs. Make sure you’re getting all possible discounts available to you and employ the help of an auto broker if you don’t have the time or ability to do the legwork yourself.

Related:

• How Often Should You Shop for Better Auto Insurance?
• Auto Insurance: How Much Liability Coverage Do You Need?
• Do You Know About These Auto Insurance Discounts?
• Do I Have Enough Auto Insurance?

Reviewed June 2024

About the Author

Andrea Norris-McKnight took over as the editor of The Dollar Stretcher and After 50 Finances after working under the site founder and previous editor for almost 15 years. She has also written for Money.com, GOBankingRates.com, HavenLife.com and The Sacramento Bee.