If you own a car, insurance is a necessary expense—but to save on car insurance is not outside of your control. Maybe you can’t do anything about where you live or substantially decrease the amount of driving you to do, but you still have plenty of options available to decrease your car insurance premiums.
Here are five ways to save on car insurance:
5. Decrease Your Coverage
If you’re still making payments for your car, your lender probably required you to purchase collision coverage. However, if you’re driving an older car that’s already paid off, reducing your coverage to liability only will substantially lower your premium. Keep in mind doing this means insurance won’t pay for repairs to your car if you’re the one who caused an accident. You can also decrease your premiums by raising your deductible—but make sure that amount is still within your ability to afford if something happens to your car.
Meanwhile, in a situation where you have vehicle problems or an accident and your car is being repaired, one way to save on car insurance after an accident is if you have another vehicle, you don’t need to pay for rental reimbursement coverage.
Another way to save on car insurance and decrease coverage is by dumping roadside assistance if you have an auto club membership or if it’s part of your new car warranty. Think carefully before adding extras such as legal expenses cover, windscreen cover or use of a courtesy car to your car insurance package. Including too many add-ons is not a good move if you are trying to save on car insurance.
4. Combine Policies
Most carriers offer discounts if you have more than one insurance policy with them. If you drive more than one car, ensuring all of them with the same company makes sense. You save yourself a hassle by having a single premium to budget, and you usually qualify for a multi-car discount that saves you some money. If your carrier offers homeowners or renters insurance as well, they may offer additional discounts if you add those policies to your account.
However, make sure to check out total cost both ways: Compare premiums from different insurers with single-insurer packages.
The financial blog Wise Bread contends that drivers can save between 10 to 20 percent on their insurance by combining a car insurance policy with, say, a renter’s or homeowner’s policy from the same company.
3. Compare Carriers
Insurance carriers are private companies competing with each other for your business—and they do so by trying to offer you the lowest possible rate and the most potential discounts. Rates vary widely, and the only way to know you’re paying as little as possible is to shop around.
Get different quotes, a minimum of three, from both different insurance companies and different types of insurance companies—that is, those that sell through their own agents; those that sell through independent agents and those that sell directly to consumers via the phone, an app or the Internet. Ask friends and relatives for their recommendations based on their experiences, and do your own due diligence by researching the company before committing.
Also, when you’re comparing new or used vehicles to purchase, research what each will cost to insure. To start, you can check safety rankings for specific models with the Insurance Institute for Highway Safety’s (IIHS) online Top Safety Pick rating tool.
Carriers offer discounts based on the length of your average daily commute, the number of miles you drive in a year, your membership in an auto club and even your job—in an attempt to lure drivers who present the lowest risk.
Finally, it is important to understand and have adequate knowledge to save on car insurance. You can learn by asking a prospective insurer informed questions. Anyone you speak to should take the time to answer to your satisfaction. The whole purpose of doing this is if the worst happens and you need to make a claim.
2. Don’t Buy a Ferrari
Buying a brand new vehicle is a great feeling, but it is not a prudent way to save on car insurance.
New cars, of course, are also significantly more expensive than older cars. You pay a significant premium to drive a new car off the lot. You will also pay more for car insurance.
Some cars cost more to insure than others. Part of this has to do with the price of the car—if it’s extremely expensive to repair, chances are it’ll be equally expensive to insure.
And if you’re driving a bright red sports car, insurance companies see you as a driver with a lead foot who is more likely to get popped for speeding or reckless driving. If you choose a car that’s more economical and less ostentatious—and with plenty of safety features—you’ll spend less insuring it. (In other words, you should probably steer away from ridiculous cars.)
Typically, a five-year-old vehicle is 18-25 percent cheaper to insure than a brand new car. A 10-year old vehicle can be less than half the price to insure. Prices continue to drop from there, especially once you feel comfortable dropping comprehensive insurance.
READ MORE: Getting the Best Gas Mileage Out Of Your Car
1. Drive Safely
It seems obvious, but the number one way to save on car insurance is to be a safe driver. Speeding tickets and accidents put points on your license and make you a greater insurance risk, which means insurance companies will charge you more. Keeping your driving record clean not only keeps you and other people on the road safe, it saves you money. Some carriers also offer bonuses for drivers who maintain safe driving habits while insured.
Traffic tickets and accidents drive up car insurance premiums. If you get a ticket, you may be offered the opportunity to go to traffic school to get it dismissed or reduce the number of violation points that go on your driving record. If you can keep the violation off your driving record, the time spent in class could save you hundreds of dollars over several years.
Many insurance carriers have discount programs in place for drivers who elect to take a defensive driving course. In fact, some states, such as New York, New Jersey, and Delaware, have mandated premium reductions for drivers who complete a driver safety course.