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5 Ways to Lower Your Car Insurance Rates

Continuing along with the car theme this week, I wanted to explore one topic (nearly) everyone hates to deal with: car insurance.

Why is this so hated?

It should be pretty simple.

I mean, you agree to pay a company XX number of dollars each year in exchange for a certain agreed upon coverage in case something happens to your car.

It shouldn’t be that bad right?


Unfortunately it rarely works out that way.

From premium increases, to not covering the full value of your car in an accident, these companies figure out ways to get every dollar out of you, while paying for as little as possible.

Yea sorry… that’s not covered…

They are, after all, looking to make a profit.

However, the thing is, unless you are an extremely high risk driver (you get into a lot of accidents, have many tickets, etc), these insurance companies do not want to lose you as a customer.

After all, if you are paying monthly premiums for insurance, yet rarely or never file a claim, you are their ideal customer.

Straight profit.

And because they don’t want to lose you, this gives you (some) power.

Once I realized this, I was able to drop my premium from $70-$75/month to $50-$55/month with the exact same coverage I had before.

Think $25/month doesn’t amount to much? That’s $300 a year to add to your savings!

Now, there are some things when it comes to car insurance prices you can’t control, such as location (premiums in a city are usually much higher), but many things you can.

Here are 5 ways to lower your Car Insurance Premiums:

1) Shop Around Other Insurance Companies

After three consecutive 6 month policies in which my insurer raised my premiums each time, I decided it was time to look around to see what else was being offered.

During those 18 months, I had gotten in no accidents, gotten no tickets and even turned 25 when your rate is supposed to go DOWN!

I figured I had nothing to lose.

In fact, it was the opposite: I had everything to GAIN.

I simply went to three separate car insurance companies, filled in my information online, and immediately received quotes.

The premiums offered were all MUCH lower than what I currently had, and I had the exact same coverage!

I immediately called the company I wanted and switched on the spot.

It was too good of a deal to pass up!

When I called my old company the next day to tell them I was cancelling, the conversation went something like this:


Me: Hi, I’m calling to let you know I’ll be cancelling my policy as I’ve found a better rate.

Insurer: I’m sorry to hear that. What’s your rate going to be? Let’s see if we can match that.

Me: I’ve found one for $50-$55/month.

Insurer: Ok, hang on, yep we can match that no problem…..



Of course I declined as I had already paid for the other company, but had I went to them first I could’ve gotten the big discount with going through the (slight) hassle of switching!

The thing is, your insurer isn’t just going to give you a discounted price.

If you don’t say anything, they’ll assume you’re fine with your payment and probably try to sneak a few price increases past you too.

This is something everybody should periodically be doing!

Personally, I will probably look around at least once a year to see whether I’m still paying the best price.

2) Raise Your Deductibles

When filling out insurance coverage forms online, many line items will come with “recommended” options.

For collision and comprehensive coverage, the recommended deductibles are typically $250 and $500 respectively.

However, if you raise these to higher limits, say $500 and $1,000, you’ll find that the premium will drop.

How much it drops will depend on how much you were paying from the start, but sometimes can be as much as 20-40%.

If you go this route, make sure you have enough cash on hand to cover the deductible amount if the worst case does happen.

This is where having an emergency fund is very handy.

3) Reduce Coverage with Older Cars

If you have an older car, the monetary value of it usually is somewhat low.

With this situation, it may be useful to consider dropping collision and comprehensive coverage.

Think about it:

If your car is only worth $2,500 and you pay $250 annually for collision and comprehensive, as well as having a high deductible for $1,000 is it really worth paying all that?

If your car is totaled you’re looking at a maximum payout of $1,250 ($2,500-$250-$1,000).

Would it be better to save those premiums instead for your (eventual) next car?

If the worst case does happen and your car is totaled, many times you can sell the parts of your car for slightly less or similar value on their own.

The choice is up to you and depends on your risk preference.

However, taking off collision and comprehensive can save a lot of money each year.

4) Bundle / Browse Other Discounts

If you have homeowners or other insurance with a company, it’s worth checking to see if they offer any good discounts for “bundling” and getting your car insurance policy with them as well.

There are also many other discounts that can be offered based on your driving record.

Not all companies offer these, but it could be worth asking if they apply for you.

Here’s a short list:

  • Low annual mileage discounts (if you don’t drive a lot)
  • Good credit score
  • Discounted through employers benefits
  • Taking Defensive Driving Courses
  • Antitheft Devices
  • Good Driving History (no accidents/tickets for XX number of years)

Personally, my good driving history and credit score definitely have helped me get cheaper rates.

5) Be a Good Driver

This should go without saying but this is the most important factor when it comes to determining your rate!

As mentioned earlier, sometimes there’s not much you can do.

For instance, a few weeks ago my Mom was stopped at a red light waiting for it to turn green when someone who was distracted while driving, failed to slow down in time and rear ended her.

Luckily, everyone was fine and the damage was minor, but this is something that’s impossible to avoid.

On the other hand, there’s a whole bunch of things you CAN do to help avoid getting in or causing any accidents.

I’m not trying to tell people how to drive but it can’t hurt to have a little refresher every now and then 😉

Here’s a brief list:

Don’t text and drive

  • Just don’t, it’s not worth it. This also goes for fidgeting with anything else that can distract you from the road.

Don’t follow the car in front of you too closely (also called “tailgating”)

  • Doing this gives you much less reaction time and limits your field of vision.

Use the left lane only for passing

  • Even if you’re technically going the speed limit in the left lane, if people are passing you on the right side this is extremely dangerous and in many cases YOU are in the wrong. Many states have laws guarding against this.

Assume everyone else is a bad driver

  • This means being on the lookout for people making unsignaled turns, sudden stops, swerving, etc. Many times you can’t do much about it, but it helps to be aware.

Monitor your own car

  • Be aware of any issues with your car, especially your brakes. Make sure to get an oil change and/or tires rotated when needed. Check your tire pressure every now and then to avoid blowouts.


Hopefully using these methods will help you to get the best car insurance rate.

When you can save some serious money, what’s there to lose!?

Let me know of any other ways to lower your premiums or a good safe driving tip you have!

8 thoughts to “5 Ways to Lower Your Car Insurance Rates”

  1. I was looking forward to this post! I am in the process of shopping around and it has been interesting. Most of the quotes I have received have been about the same or even more than I currently pay. I did find one that can save me around $665-675 per year (I pay every 6 months in full). It seems like a no-brainer but my gut is telling me it’s too good to be true. I have my current insurance agent reviewing it and he’s someone I trust. Hoping he can work with my existing insurance company to match it or at least come close to it.

    I am going to experiment with raising the deductibles and see how much that brings it down on the existing quotes I have. I have to run the numbers but it’s probably worth it as I imagine I would pay more in premiums over time for my existing level of coverage even if I raised the deductibles and was unfortunate and got in an accident.

    1. Wow nearly $700 would be an insane amount of savings! Definitely a good choice to get that checked and make sure it’s legit though.

      Yea in some cases raising the deductibles may not save you much in which case it’s probably better to keep them where they’re at, but can’t hurt to check and see!

  2. Oh yeah, I immediately assume everyone else around me is an idiot (and often they prove me right!). I’d always heard that NC drivers were horrible but didn’t really understand that, having learned to drive surrounded by them. Now I understand. WHY do so many of them use the left lane for going 5 mph UNDER the speed limit?

  3. Since we always drive older cars (to the point where my 2008 is still “the new car”) we don’t carry comprehensive insurance. Since I’ve owned a car for 11 years now and never used the deductible (knock on wood), it’s definitely been the right decision.

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