Car insurance is essential if you own a car. The minimums required vary from state to state with even those that don’t require car insurance outright still requiring proof of financial responsibility should you be involved in an at-fault accident. Basically, if you’re going to buy a car and drive, then you need car insurance.
The challenge is the cost. You do research before you buy a car in the first place to get the best deal possible, right? You should do the same thing before you pick which insurance company to use and exactly what kind of car insurance to buy. It’s complicated, but we’re here to help sort things out.
Read on to find out all the ways you can save on car insurance. Learn about all the available discounts, how bundling can help you save big, why being a good driver matters, and how where you live and the car you drive can lower your rates.
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It’s not cheap to insure a car, but there are ways to save. How much can you save? Many people can get car insurance for under $100 per month. The key is doing the research to figure out what’s best for you. That’s right, it’s time to be selfish. The car insurance that’s perfect for your Aunt Sally might be way too expensive and even completely unnecessary for you and your needs. That’s why you should get quotes from a wide range of insurers. Also be aware that where you live has a lot to do with how much you pay. If you happen to live in Florida, then you’re going to pay some of the highest rates in the country. On the flip side, if you like lobster and don’t mind the winter, then living in Maine will get you a much better rate. Also, those who live in cities pay more than those who live out in the country.
Taking a driver’s education class might not sound like the most exciting thing in the world (it’s not), but it will help you save on your car insurance. Exactly how much you save depends on your insurer, but it can be as much as 10 percent. While the cost of a driver’s ed class isn’t cheap, it’s a one-time expense. Once you take the class, you’ll get the discount every year so it’s worth it in the long run.
This is especially true if you have teen drivers on your policy. It’s not cheap to insure a teenager, so the savings for taking driver’s ed can make a big difference in the overall cost of your policy. Check with your insurer to see what discounts are available for driver’s ed and check for schools in your area to see when classes are available and to find the one with the lowest cost.
Taking a driver’s ed class can also help lower your insurance rates if you have points on your driving record for speeding tickets or minor infractions. Depending on the state where you live, taking a driver’s ed class can remove some of those points from your record. Ask your insurer and check your state’s regulations to see if taking a driver’s ed class can help remove points from your record.
You can read our reviews and picks for top online driver's ed classes here.
Though it may be tempting to drive it like you stole it, the local authorities frown on that sort of behavior. Being a responsible driver is one of the best ways to keep your car insurance rates down and that means following posted speed limits.
A speeding ticket is expensive, and it has a huge impact on your insurance rate. The average cost of insurance for a driver with just one speeding ticket is $2,036 and that rate increase will stick around for years. You could end up paying a higher insurance rate for as long as a decade for one speeding ticket, so ease up on the gas.
Distracted driving can also up your rates, with an average insurance rate of $1,983 for a single distracted driving ticket. There is no reason to be checking your phone while you’re driving. Same goes for putting on make-up, shaving, or reading a book. It’s not worth the potential insurance hit, not to mention the risk of causing an accident.
Speaking of accidents, those also make insurance rates jump. The average cost of insurance for a driver with one accident is $1,920. Even if the accident isn’t your fault, you could see an increase in your rates.
If you have homeowner’s insurance, then bundling your auto insurance with the same insurer can help lower your rates. Even just owning a home can drop your insurance rates by about $50 so it’s important to let your auto insurer know if that’s the case.
Bundling your auto insurance and homeowner’s insurance can knock about 10% off the cost of your auto policy. Not every insurance company offers both types of insurance, but you may be able to find a local insurance agent who can do the legwork for you and create a package that still offers a discount.
Several insurance companies offer their own safe driver programs to help you save money. In general, these programs are known as a form of “usage based insurance,” where you’re paying for the insurance that you actually use, rather than one set fee for the entire year or six month period.
Exactly how they work varies from one company to the next, but the idea is always the same. Insurance companies get a real world look at your driving and apply a discount if they like what they see.
While your driving record is considered by every insurance company, these opt-in programs offer additional discounts. They typically collect data on hard braking, rapid acceleration, what time of day your drive, how far you drive, and in some states, if you use your mobile phone while driving.
You can save money with these programs, but there are drawbacks. Some may increase your rates depending on what the data shows. There’s also the issue of privacy as a significant amount of data about how and when you drive is collected, so think carefully before you decide to opt-in.
Snapshot is available as a plug-in device or a mobile app and needs to be used for only a limited time, usually through your first policy period. It’s important to note that while safe driving habits could net you a discount, the reverse is also true. Your premium could increase if the data collected shows unsafe driving habits.
State Farm Drive Safe and Save:
This one works either through your smartphone or select third-party systems like OnStar, which is available on General Motors vehicles. You get a 5% discount just for opting in and could earn up to a 50% discount depending on your driving habits. While there is no risk of your rates going up due to how you drive, you could lose your low mileage discount if you drive more than estimated.
Opt-in to Drivewise with a smartphone app or a plug-in device and immediately earn 5% cash back. After that, earn a discount of up to 13% every six months depending on how you drive. Your rates will not go up due to the results.
Allstate also has safe driving challenges that earn points you can use for a variety of rewards. Challenges include 3 consecutive days with no sudden braking and 3 consecutive days with no high speeds with points awarded in addition to any discounts.
Liberty Mutual/Safeco RightTrack:
Choose from an app, plug-in device, or car tag that sticks to your windshield. RightTrack monitors your driving for just 90 days. If you earn a discount, then it will be applied for the life of your policy. Your rates will not go up due to the data collected.
This program lasts from four to six months and is available as an app or plug-in device. There is a 10% discount for signing up with a discount of up to 40% depending on the results at the end of the program. Your rates might not go down based on the data, but they won’t go up either.
If you’re a living, breathing human, then there’s probably a car insurance discount that will reduce your rates. There are discounts for military members, good students, memberships in fraternities and sororities, being in clubs, going to specific colleges, and for educational professionals. Check out our story on car insurance discounts for the many ways you can save money on your policy.
Save time and money with online classes
There are lots of ways tosave money on car insurance. These include a wide range of available discounts, safe driver programs, bundling your insurance policies, and being a safe driver.
Insurance is not one size fits all. You need to make sure you meet the minimums required by your state and then adjust that number based on your needs.
The higher the deductible, the lower your premium. Sounds simple, but it’s not so simple when you have a claim and must pay that deductible. Choose an amount you know you can comfortably pay if you have a claim rather than picking a number that’s too high.
It’s a good idea to check with multiple insurers to find the best rate and see what’s out there for you. The more questions you ask and the more information you provide, the better the chance that an agent will be able to find a discount and reduce your rates.
There’s no one insurer that’s always the cheapest, which is why you have to shop around. There are national insurers that have great rates, but make sure to check with regional insurers in your area to see if they can offer a better deal.
Buying a new car can cause your premiums to go up because it’s more valuable than your old one. Some cars are stolen more often and some are more expensive to repair, which can also raise your rates. It’s worth asking your insurer about the rates on a potential new car before you buy to see just how much they will change.
Taking classes online is often faster and cheaper than the classroom.