Saving money on car insurance might seem complicated, but it doesn’t have to be. Insurance rates aren’t set in stone. They depend on several factors like your driving record, age, and even the type of car you drive. The good news is that you may have more control over these costs than you think. By understanding how insurers calculate your rates and knowing which changes can make a difference, you could save a lot this year.

You May Be Able to Save on Your Auto Insurance Costs This Year

There may be things you can do to lower your car insurance costs. It takes some work, but there are ways to consider:

• Compare Rates from Multiple Insurers
• Take Advantage of Discounts
• Raise Your Deductible
• Think About Usage-Based Insurance
• Improve Your Credit Score
• Think About Your Car Type

Compare Rates From Multiple Insurers

You need to look around, but shop smarter, not harder. Insurers give different weights for risk factors which causes prices to range from company to company. For instance, one insurer might place a heavier weight on a recent accident compared to another. It’s important to get quotes from several insurance providers so that you can compare car insurance, from multiple vendors, at the same time.

Take Advantage of Discounts

Nearly every insurer offers a list of ways that you may be able to get discounts. See if your provider lists common discounts, because most companies offer many options. You might find discounts for things like insuring multiple vehicles, being a good student, bundling your home and auto insurance, being a safe driver, or even belonging to certain groups. You might not always find a substantial discount that balances the need to lower car insurance costs, but even small changes do help.

Raise Your Deductible

Increasing your deductible is a useful way to reduce your premium. The deductible is the amount you pay out of pocket before your insurance company pays the claim.

For instance, if your deductible is $500 and your bill is $3,000, you only have to pay the first $500. A higher deductible shows the insurance company that you’re willing to take on more financial risk, which they typically reward with lower premiums. However, keep in mind, this can be tough if you get into an accident and can be different depending on the insurer.

Consider Usage-Based Insurance

If you’re comfortable with your driving habits being monitored, this might work for you. Usage-based insurance programs give lower costs based on actual driving data.

You often install a device, or use a mobile app, that tracks things like mileage, speed, and braking habits. Safe drivers, or those who drive infrequently, typically save the most money with these programs.

Improve Your Credit Score

Outside of the handful of states that prohibit using credit scores to influence car insurance prices, people tend to pay a lower premium for better credit scores. Start working towards improving your credit score with better practices and more time.

First, focus on paying your bills on time, every time, because consistency is the foundation. Reduce existing debt to reduce your credit utilization ratio, but also avoid new debt so your overall score doesn’t dip.

Think About Your Car Type

It’s nice to think ahead. Before buying or leasing a new car, get quotes for the vehicle. The type of vehicle has a pretty big impact on your premium, and the safer the better for price. Features for reducing claims may be able to help lower the insurance bill. Check reliability reports too as costs like frequent issues with certain engines cause expensive repair bills over the long run.

Example of Savings in Real Life

Let’s look at an example of how these tips could lead to savings! Let’s say Sarah is a 35-year-old driver with a clean record, but her insurance premiums are $1,800 per year. First, she compares quotes from multiple insurers and finds that another company offers a similar policy for $1,500 per year, saving her $300. Next, she raises her deductible from $500 to $1,000, which reduces her premium by another $200 per year. Sarah also signs up for a usage-based program since she drives less than 5,000 miles a year, which gives her an additional $150 in savings. By taking these steps, Sarah could reduce her total annual premium from $1,800 to $1,150 — saving $650 per year.

In Summary

Lowering your car insurance costs takes some effort, but it’s possible with the right approach. By understanding the factors that affect your rates and making smart choices, you could save a lot over time. Comparing rates, finding discounts, and adjusting your coverage are all steps that can make a big difference. Even small changes can help reduce your premium and put money back in your pocket.