How to Lower Car Insurance Costs

Want to know how to lower car insurance premiums? Start by reviewing discounts, deductibles and bundle options before removing important coverage.

These strategies can help you effectively manage your car insurance expenses while ensuring you maintain the protection you need. To learn how to lower car insurance, the most effective approach is usually a mix of comparing quotes, reviewing your policy, and making sure you’re using every discount available to you.

Key factors affecting auto insurance premiums

Car insurance rates are influenced by a variety of factors, each playing a role in determining the overall cost of your premium. Understanding these factors and how to reduce your car insurance costs can help you make informed decisions.

• Driving record: Your individual driving record may be one of the most significant factors in determining your insurance premiums. Drivers with a history of accidents or traffic violations are considered at higher risk and may face higher rates than those with a clean driving record. It may be a good idea to review “How Much Does Car Insurance Go Up After an Accident?” and “Does a Speeding Ticket Affect Your Insurance?” when making decisions about your coverage.
• Vehicle type: Your vehicle’s make, model, safety features and repair costs all play a role in your insurance rate. For example, a minivan with numerous safety features is generally less expensive to insure than a high-performance sports car. When purchasing a vehicle, consider its insurance costs along with other factors like fuel efficiency and maintenance costs.
• Location: Where you live or “garage” your car can influence your insurance premiums. Areas with high population density may have higher premiums due to increased loss frequency. Similarly, regions prone to natural disasters, like hailstorms, may also lead to higher premiums.
• Mileage: Lower annual mileage or less time on the road reduces the likelihood of an accident and can often result in a lower car insurance premium. Conversely, high-mileage drivers may be seen as higher risk. For example, if you work from home, your premium may be lower than someone who has a long commute.
• Credit score: Many insurance companies use credit-based insurance scores as a risk indicator to determine rates. These scores are typically based on factors such as payment history, length of credit history, amount of outstanding debt and types of credit in use.

7 effective strategies to save on car insurance

1. Compare car insurance quotes

Comparison shopping can help ensure you’re getting the coverage you need within your budget. Insurance costs can vary for the same coverage, so it’s important to check multiple companies to learn how to lower car insurance premiums.

If you want to know how to get lower car insurance, compare quotes using the same coverage limits, policy duration and deductibles. That way, you can evaluate price differences more fairly. You’ll want to balance the cost of insurance with the service the carrier has to offer. Evaluate the reliability of the insurance company and their customer satisfaction. You can do this by checking their reviews to understand how they treat their customers.

Shopping around? Read: “How to Compare Car Insurance Quotes”

2. Take advantage of discounts and savings programs

Amica offers various car insurance discounts for vehicle safety features or for how you pay.¹ Here are a few easy ways to save money on your premium:

• Passive restraints: You may qualify for a discount if your car is equipped with passive restraints.
• Electronic stability control: Discounts may be available if your car is equipped with electronic stability control to help maintain handling when driving on icy or wet roads.²
• Forward-collision warning: If your car has forward-collision warning, you may be eligible for a discount on your policy.
• Paid in full: Savings for paying your policy premium up front.
• AutoPay: Discounts for enrolling in automatic payments.
• Paperless: Savings for opting to receive your bill and policy documents electronically.³

Trying to lower car insurance rates? Discount programs can be one of the simplest places to start because they may reduce costs without changing your core coverage.

3. Bundle your insurance policies for additional savings

Choosing to bundle auto and home insurance with the same company can save you up to 30% off your policy premiums. Bundling offers the convenience of dealing with one company and the benefit of lower car insurance rates. If you don’t own a home, consider bundling with renters, condo or life insurance policies.

If you want more details on how bundling works, read “How to Bundle Your Home and Car Insurance for Savings”.

4. Adjust your coverage and deductibles

Your insurance needs may change over time. For an older car, repairs and insurance may cost less than for a new one, so adjusting your limits and coverages could lower your premium. As your car’s value declines, consider whether coverages like collision and comprehensive are still worth it—especially when the annual premium plus your deductible is close to the car’s value. Raising your deductible can also reduce your premium, but choose an amount you can afford to pay out of pocket if you file a claim. Adjusting your limits and coverages accordingly may help reduce your auto insurance premium.

Raising your deductible may be a way to lower your car insurance premium immediately. However, make sure the deductible is an amount you can afford to pay out of pocket if you need to file a claim.

Before making changes, it can help to review how much car insurance you may need and how car insurance deductibles work.

5. Maintain good driving habits

Keeping a clean driving record by avoiding accidents and traffic violations is key to keeping your insurance premiums low. Drivers with no incidents on their record usually pay lower car insurance rates.

Taking a defensive driving course may qualify you for discounts on your policy and improve your driving skills. Alternatively, you can use a telematics program like the StreetSmart by Amica™ mobile app, which rewards safe driving habits.

Learn more about defensive driving courses and what telematics is if you’re exploring ways to reduce your premium over time.

6. Choose a car with lower insurance costs

Researching the cost of auto insurance before purchasing a vehicle can save you from the sticker shock associated with insuring some newer vehicles. Certain parts and features in newer vehicles are more complex and can be expensive to repair, leading to higher insurance premiums.

Choosing a car with a high safety rating and anti-theft devices can lower your insurance costs by reducing the risk of accidents and theft.

7. Review your policy regularly

Reviewing your car insurance policy around the time it renews is a smart habit. You can ensure your coverage remains appropriate for your needs, and it can help you identify opportunities to save.

Updating your car insurance policy after major life changes is important, as these changes may impact your premium. For example, you’re recently retired and no longer commute to work every day, or a member of your household who was listed on your policy has moved out. Both can potentially lower your premium.

Recommended reading: 7 Life Changes That Should Prompt an Auto Insurance Checkup 

Managing your auto insurance rates

Learning how to lower car insurance rates can help you save money and keep the coverages you need. We’re here to support you every step of the way. An Amica representative can review your policy and answer any questions you have about coverages or discounts.

You can also explore car insurance policies to better understand your options and ask whether your current policy setup still fits your needs.