How to Save Money on Car Insurance: Tips to Help You Lower Your Rate

Everybody wants to get a better deal on their car insurance. In fact, a ValuePenguin survey shows that 74% of Americans have shopped around and compared rates on auto insurance at least once—and for good reason! Car insurance is one of the larger fixed monthly expenses that all drivers have to account for, so when someone is able to find a great deal on auto insurance, those savings can have a big impact on their budget.

The average monthly cost of auto insurance is about $136 per month, but the individual cost of auto insurance from one person to the next will vary based on numerous factors.

Read on for the inside scoop on how to save money on car insurance and score brag-worthy car insurance rates for years to come.

Review Your Insurance Policy

To get the best car insurance rates, you'll first need to understand what you currently pay and what coverages you're paying for. Check to see what your current limits are, what your deductibles are, and if you're carrying any optional add-on coverages. If you don't fully understand your insurance policy or are unclear on any of the aspects, you can contact your agent or insurer directly for help.

Check for Discounts

One way that Clearcover makes insurance simple is by automatically including discounts in our low rates. Rather than itemizing discounts and making you prove your eligibility, we pass the savings on to you from the start. If your insurance company doesn't automatically bake discounts into your rate, you'll want to find out what discounts you're getting and if there are any other discounts you qualify for.

You can ask your insurance company for discounts by contacting them directly and requesting they review your policy for possible discounts. Tell them if you are eligible for a specific discount they offer and/or fill them in on any new major life changes that could result in a discount, like getting married or joining the military.

Some common car insurance discounts that can help lower your rate include:

Multi-car discount
Multi-policy discount (bundling your auto insurance with other types of insurance, like homeowners insurance or umbrella policies)
Good driver discount
Safe driver discount
Driver training discount
Anti-theft device discount

Compare Auto Insurance Premiums from Several Insurance Companies

One of the easiest ways to save money on auto insurance is to switch companies if you can find a lower rate. Auto insurance companies are all competing to earn your business, and that competition presents an opportunity for savvy shoppers to nab lower auto insurance rates.

You can compare auto insurance rates quickly and efficiently using an online quoting tool like The Zebra. Online quoting tools allow you to get multiple quotes from different companies at the same time, enabling you to easily compare them side by side. Make sure you compare apples to apples by quoting similar coverage limits and deductible amounts to get an accurate comparison.

When you're comparing companies, consider more than just the rate. You might find that some insurance providers have unique qualities or features that are meaningful to you. For example, if you're looking for the most affordable rates, you might be willing to sacrifice hands-on human customer service for the promptness and ease of an app. Some drivers might find that to be a sacrifice, while others might actually prefer avoiding phone calls for basic insurance related tasks.

If you like the convenience of an app and want access to a customer service team, be sure to include Clearcover in the mix as you compare quotes. Our award-winning app, friendly customer service, and amazing rates help you feel confident in your coverage.

It's important to compare rates from multiple carriers, as rates can vary widely from company to company. Even if you think you're getting a great deal with your current provider, it's worth checking to see if you could be saving even more.

Important note: Auto insurance companies may be eager to earn your business, but they want to know you'll stick with them. Drivers who have been with their current carrier for a while are typically offered better rates than drivers who change providers regularly. You'll usually find the best rates if you show loyalty. Consider shopping regularly, but aim to change providers no more than every 18-24 months.

Be a Safe and Alert Driver

One of the most impactful things you can do to lower your car insurance rates is also one of the simplest: be a safe and alert driver.

If your driving history includes accidents, traffic violations, or other red flags, your rates will generally be higher than someone with a clean record. On the other hand, if you have a good driving history, you're more likely to get a lower rate and may even be eligible for a discount.

There are a few different ways you can demonstrate safe driving to an insurance company to earn a safe driver discount.

Avoid Accidents and Tickets

With some insurance companies, being an accident-free driver for a set number of years can qualify you for a safe driver discount. Eligibility requirements vary amongst carriers, but they'll generally be looking for a lack of accidents over a specific period of time. Some insurers may require you to also be free of traffic violations, like speeding.

Complete an Approved Defensive Driving Course

Defensive driving courses are designed to refresh your understanding of safe driving practices and help you avoid accidents and traffic violations in the future. Upon completion of the course, you should receive a certificate that you can submit to your insurer to earn a safe driver discount (if it is a discount they offer).

Install a Telematics Device

Some insurance companies offer safe driving discounts by measuring your actual driving habits. To earn this discount, you'll need to install a telematics device in your car that will track your driving habits, like how fast you're going, how often you brake hard, and how often you drive late at night. If the data collected shows that you're a safe driver, you could fast-track your way to a safe driver discount.

Safe driver discounts range from premium reductions by several percentage points to reduced or eliminated deductibles to accident forgiveness (where your rates aren't increased if you do have an accident).

Swap Your Vehicle for Another That Costs Less to Insure

The type of car you drive plays a big role in determining how much your car insurance will cost. Things like how safe a vehicle is or how often it is stolen are some of the factors, but put simply, some cars just cost more to insure than others.

It usually won’t make sense to sell your car specifically to obtain a lower rate on your insurance, but if you're already in the market for a new vehicle, it may be worth considering one that will cost less to insure. Here are a few vehicle-specific factors that insurers may consider or ignore when determining rates.

Safety Features Come First

Insurance is all about balancing risk. Cars with a lot of safety features tend to be cheaper to insure because they're less likely to be involved in an accident, and if they are, any resulting injuries are likely to be less severe. Insurers particularly appreciate vehicles with good crash test ratings, advanced safety features like automatic braking, and features that help prevent theft.

Do Red Cars Cost More To Insure?

Nope—you don’t need to worry about the color of your vehicle. This insurance myth stems from the prominence of red sports cars years ago. Most red cars at the time happened to be sports cars, which were likely deemed less safe at the time and subsequently carried higher rates. The reality is that your vehicle's color has no bearing whatsoever on how much you'll pay for insurance.

Consider Your Vehicle Type

Sports cars and luxury vehicles tend to be more expensive to insure than sedans or SUVs. This is due to the fact that they're usually not as focused on safety ratings, tend to cost more to repair, and are more likely to be stolen. Of course, there are always exceptions. Your best bet is to speak to an agent or get multiple quotes before making your purchase.

Raise Your Deductible

If you carry comprehensive and/or collision coverage, you may be able to raise your deductible(s) to lower your rates. In doing so, you are agreeing to pay more money out of pocket if something happens to your car. You will usually receive the immediate benefit of lower rates, but make sure you're comfortable covering a larger deductible if needed. If not, raising your deductible may not be worth the short-term savings.

Boost Your Credit Score

Credit is commonly a significant factor in car insurance calculations, with rates increasing up to 76% for those with poor credit. Most states allow insurers to factor credit scores into how they set rates. A higher score means you're considered a lower risk to the insurer, so you're likely to earn a lower rate. If your credit could use some improvement, consider taking steps to raise it before you start shopping around for other insurance rates so you can be sure you’re getting the best possible rates. Here are some credit best practices and quick wins to get you where you need to be.

Lower Your Debt to Credit Limit Ratio

You may be familiar with your debt to income ratio, but have you considered your debt to credit limit ratio? This ratio provides a quick way to determine how much debt you're carrying month to month relative to the amount of credit you have available to you. You'll take the total of all of your monthly debts and divide it by the total credit limit of all your accounts. The lower this number is, the healthier your debt to credit limit ratio is. For credit health, aim to keep your balances below 30% of your credit limit. When you're really needing to get your score up, aim for under 5%.

Resolve Collection Accounts

If you're receiving phone calls or letters about accounts in collections, take care of them as soon as possible. Unpaid accounts will stay on your credit report for seven years from when you first fell behind, even after you pay it off. You can also make a deal with the collection agency to settle the debt for less than the full amount owed, have it removed from your credit report, or both.

Get More Positive Tradelines

If you have a limited credit history, one possible way to give your score a near-instant boost is to get additional positive tradelines (a term for all the data associated with each individual account on your credit report) onto your report.

You can obtain additional positive tradelines by asking a family member with a good credit history to add you as an authorized user on one of their accounts or by using utility and cell phone payment tradelines. Some of the major credit bureaus offer services like Experian Boost that can help you add these positive accounts to your report quickly. Getting those tradelines added won't be as impactful to your score as a longstanding credit card, but when you have a limited credit history, it can be helpful to increase your positive data points.

Save Money on Car Insurance Today with Clearcover

To save money on car insurance, it’s important to be aware of the different factors that contribute to your rate. You can review your policy for opportunities for savings and discounts, compare your current rates to what you can get elsewhere, and work to improve your credit score.

If you're looking for a new car insurance policy from a car insurance company that's making big waves in the insurance industry, give Clearcover a shot. Our claims processing time is lightning fast, and we offer a variety of unique features, like our award-winning app, super friendly customer service, and automated just-about-everything. Get your free quote today!