Owning a car and getting behind the wheel of it comes with a lot of responsibilities. And one of those is getting car insurance to protect you and your car.
Car insurance really isn’t an optional expense. Do you own a car? Then you need to have some coverage on it.
It’s pretty common to see your premium increase as times goes on. This is because your rate can vary quite a bit depending on a host of factors: Your credit score, types of policies and coverage limits, driving record, age, and gender.
It can even vary depending on your ZIP code and which insurance company you’re with.
So what can you do when you see your premium creep up and up? We’re sharing the advice from four people who managed to lower their rate through different methods.
Should I compare my car insurance premium to other people?
So you notice that you’re paying more and more for car insurance. And you might think it’s a good idea to compare the average car insurance rates in the nation and in your state.
The average cost of car insurance in the U.S. is $1,427. It breaks down to $118.92 a month.
But that number is if you’re 40 years old, have a strong credit score, and a clean driving record. Insurance is based on so many factors, it’s highly unlikely that those average numbers match up to your characteristics.
It can be helpful to compare so you know if you’re significantly overpaying or not, but don’t take too much stock in the average car insurance rates.
It’s a good start, but let’s take a deeper look at what’s affecting your car insurance:
Did you see your car insurance premium increase? Here’s why.
It might seem as if your insurance premium went up for no reason.
Here are a few reasons why the cost of your insurance premium might’ve seen an increase:
Filing a claim
When you file a claim after an accident, and you’re at fault, your insurance rate usually gets pushed up by a certain percentage.
This bump in your rate typically stays on your policy for at least three years.
Serious traffic violations
The more serious the traffic violation, such as driving recklessly, speeding, driving under the influence, or taking off after the scene of an accident can all cause your premium to rise.
By the way, this is all noted down in your driving record, which insurance companies use to determine your car insurance rate.
Not only can moving to a different state bump up the cost of your car insurance, but just uprooting to a different ZIP code in the same city can also increase your premium.
Your credit score taking a hit
Most states take into account your credit score when deciding on the rate of your premium.
In fact, 95 percent of auto carriers use credit scores in their underwriting process.
Adding a young driver to your policy
Car insurance companies usually charge a higher rate on premiums for drivers under 25.
And if you add someone who has a far from perfect driving record, been in several accidents, or filed lots of claims, you will see your premium increase.
The type and limits of coverage
Trading in your old car for a new one?
Ways to lower your car insurance premium
The good news? There are certainly ways you can save on car insurance.
Here are some pointers on how you can lower your car insurance premium, from folks who have done it themselves:
Switch car insurance companies
Michael Lacy lives in Houston, Texas, and is a financial educator at Winning to Wealth.
He decided to switch car insurance carriers on his two cars. This saved him $300 for the six-month term.
He had full coverage on both his 2013 Chevy Malibu and 2015 Chevy Equinox.
“I always shop for a new carrier at the beginning of each year, just to verify that the rate I’m paying is competitive,” says Lacy.
“Sometimes I get a quote that’s much lower, and other times my current carrier is within the ballpark of the new quotes and I won’t switch at all — but it definitely doesn’t hurt to be aware.”
Boost your credit score
A few years ago, Victoria Pierre’s credit score was in the low 600s. As her score was considered subprime, she needed a co-signer on her loan for a used car.
“At the time I was paying close to $100 a month for a pretty basic insurance policy,” says Pierre, who writes about car insurance for AutoInsuranceEZ.com.
“But as I worked to pay down my debt and improve my spending habits, my credit score went up and my insurance premium steadily went down.”
Pierre now boasts a score of 807 and is paying the lowest monthly payments she’s ever paid as a car owner.
“If your score is improving and you don’t notice a change in rates, it could be time to make a call to your provider, or shop around for a new one,” says Pierre.
Track your driving habits with an app
Some carriers have an app where you can track your driving habits such as speed, braking, and the time of day while you’re on the road.
That’s what Sam Hawrylack did to save on his premium. He installed AllState’s DriveWise app on his phone to track his driving habits. In turn, he got a discount on his premium, plus money back for being a safe driver.
He ended up saving about 8 percent on the policies for his 2012 Hyundai Sonata and 2017 Hyundai Santa Fe.
“Yes, sometimes it’s as simple as downloading an app on your phone,” says Hawrylack, who is a personal finance expert and founder of How to Fire.
“Anyone interested should contact their insurance agent to see what programs are available.”
Research quotes before you get a new car
When Gianetta Palmer, a writer who lives in Gainesville, Georgia, started hearing noises in her car every time she got in it, she soon realized it was time for an upgrade.
After months of searching, she narrowed down my search to three SUVs: a Nissan Rogue, Jeep Cherokee, and a Ford Escape.
Besides checking the prices on these SUVs from various websites, she also compared car insurance prices online and spoke with her agent multiple times.
Her discoveries: Car insurance rates are more expensive for sports cars, plus the Mustang is stolen more often than other comparable vehicles.
What’s more, she found that an older vehicle is more difficult to repair in the case of an accident because parts are hard to find, and the cars aren’t worth that much.
She landed on a Ford Escape, got full coverage, and saved nearly $200 on her annual premiums.
“I saved money on my car insurance by purchasing a new vehicle, and changing the car I drove.”
Will it work for me?
As you can see, there are a bunch of ways you can bring down the cost of your car insurance.
Depending on your situation, you might want to try a combination of these things as a way to start getting your car insurance payment down.
It’s important to note that trying these tips will not always guarantee you a lower premium. And if it does work, the percentage or dollar amount will always vary.
But it’s always worth a shot because there are only benefits to trying these things out.