Does your monthly car insurance bill give you a headache and cause you to contemplate the mass transit route? We can relate. Learn how to lower your car insurance with this complete guide. You could also try our auto insurance calculator to see how much people like you pay for car insurance and ways to save.
PRO TIP! If you’re curious about other auto insurance options, MoneyLion can help. Search numerous insurers and find savings in seconds at the Auto Insurance Marketplace. Plus get free support with some partners when you make the switch.
8 ways to lower your car insurance
If you want to learn how to lower your car insurance premiums, you might start with these nine tips. You’d be surprised at how everything from your driving record to your credit score and your age can influence your car insurance cost.
1. Improve your credit score
Auto insurance companies use your credit score when factoring in your car insurance premium. Their logic is that a better credit score will result in your making timely payments and being a safer, more responsible driver. If your credit score is in the 690-850 range, that should be high enough for you to get preferred rates. If your credit score is in the 689 or lower range (which industry experts would say is average at best), try boosting your score for a lower rate.
You can try improving your credit score by doing the following:
- Pay all your bills on or before the due date
- Don’t close any credit cards
- Address any collection accounts
- Apply for a Credit Builder Loan
Once you raise your credit score, shop around for car insurance and see if you can beat your current premium.
Healthy credit is crucial. You can help build yours with a MoneyLion WOW membership! As a member, you’ll unlock the ability to apply for a Credit Builder Loan that’s helped more than half of our members raise their score by 27 points in 60 days!1
A Credit Builder Loan is a small loan that is held in a secure account while you make monthly payments. As you make your payments, those payments are reported to all three credit bureaus to help boost your credit score.
Why would this help you? When you pay off your Credit Builder Loan on time, you can reduce your debt-to-income ratio and show positive payment history – both of which could help improve your credit score. By improving your credit score, you could qualify for lower interest rates on future loans or refinancing options.
Join MoneyLion WOW and apply for up to a$1,000 Credit Builder Loan with a competitive rate and no hard credit check. You’ll also unlock the full suite of MoneyLion WOW’s exclusive features, including cashback2, VIP deals and discounts3, and added benefits to your favorite MoneyLion products.
2. Bundle your policies
Consider adding your car insurance to an existing homeowners or other policy to potentially save through bundling. Insurance companies usually offer anywhere from a 5%-10% savings for bundling your products. You can bundle your car with another vehicle, your home, or a rental property if you have one. Check with your agent on all the ways you can bundle policies to save.
Auto insurers offer a variety of car insurance discounts available, and you might qualify for some. Check to see if your company offers any discounts and contact your agent about applying for them. Some common car insurance discounts are:
- Good student: Students who maintain a specific GPA are eligible for this discount
- Claims free: Requires no claims filed
- Military: Military personnel past and present qualify for this discount.
- Senior: 65+ years and older
- Loyalty: Clients who maintain coverage with the company for a certain time frame and continue coverage
- Pay in full: Pay your auto insurance premium for the year at once and get a discount
- E-pay: Sign up for monthly automatic payments to unlock this discount
- Bundling: Insure another vehicle or your home to qualify for a bundling discount
- More: Discounts vary from company to company, see what ones your provider offers
3. Install an anti-theft device
Some insurance companies charge you a lower premium for having an anti-theft device in or on your car because it will make it harder for your vehicle to be stolen, thus lowering your risk as a driver. Lower risk = lower premium.
Some examples of anti-theft devices you can install:
- Alarms
- Tire locks
- Wheel locks
- GPS tracking system
4. Check insurance before you buy
If you’re in the market for a new vehicle or trading in your old one, get an insurance quote before you buy it. The make and model factor when it comes to what you pay for insurance. Get auto insurance quotes from multiple companies on the exact vehicle you are looking at. This action will help you determine if you can afford the monthly bills (car payment, insurance, parking, fuel) associated with the vehicle before making the purchase.
If you’re looking for ways to save on car insurance, MoneyLion can help! Save hundreds* on auto insurance by turning on Driver Score powered by Zendrive4, a program that measures your safe driving habits, such as your speed, braking, and acceleration.
*Average savings is based on program data. Not all drivers will be eligible or qualify for an offer or discount. Actual savings varies based on your driving behavior. Not valid in CA or certain other states.
5. Get pay-as-you-go insurance
This tactic has the potential to save on car insurance if you don’t have a long daily commute and use your vehicle sparingly. This type of insurance creates a custom rate based on your mileage. Your insurance company will keep track of your miles through a GPS or installed device on your vehicle. Your car insurance premium will likely change month to month, so be sure to plan accordingly. You can do this by averaging up a few months’ payments and determining how much you’re usually spending.
6. Increase your deductible
Depending on your car insurer, you may be able to lock in a lower car insurance rate by raising your deductible. You’ll pay more out of pocket in the event of an accident, but you may save more money long-term.
7. Take a defensive driving course
Your car insurance company may offer discounts on your liability insurance (or other policies) if you complete a defensive driving course. These courses demonstrate safe driving habits, which make you less of a liability, thus lowering your car insurance premiums.
8. Drive fewer miles
Ask your auto insurance company about discounts based on mileage. For instance, if you have a short commute or don’t take many road trips, your insurer may extend a low-mileage discount.
Make the Most of Your Budget
You can’t avoid car insurance, but you can try to control the costs. Learning how to lower your car insurance payments will help you make the most of your budget. Keep these methods in mind the next time you get insurance quotes and make sure your agent is thorough with your policy by adding all your eligible discounts.
If you can, take the bus or ride your bike and get a low-mileage car insurance policy. Invest in your vehicle by adding anti-theft devices to lower your risk of having to file a claim. Work on your credit score and look for discounts.
FAQ
Will my car insurance premium decrease as my car depreciates?
While your vehicle’s value influences your insurance rate, it’s not the only factor. Your driving history, age, and location also play a role in determining the cost of your insurance.
Can I lower my premium by reducing my coverage?
The less coverage you have, the lower your auto insurance rate will tend to be. But check with your state or your insurance company, as some states legally require certain types of insurance. Besides, it’s not always wise to eliminate coverage, and some insurance bundles may be conditional on purchasing a particular insurance product.
Can I negotiate my car insurance premium with my insurer?
Your insurance company may be open to negotiation, whether it’s to keep you as an existing customer or to gain your business as a new customer.
