How to Lower Your Car Insurance Premiums
Things to consider and check to make sure you are not overpaying
Many factors, large and small, help auto insurance companies determine how much they charge for policies, beginning with the types of vehicles being insured. It should come as no surprise that insurers charge more to cover newer and more expensive vehicles because they obviously will be more expensive to repair or replace. Also, higher-performance vehicles typically tend to rate higher premiums, probably because their drivers (perhaps unjustly) are presumed to be higher accident risks.
So, for starters, driving an older, cheaper family sedan will save you insurance money compared to a newer luxury SUV or high-performance sports car. That key consideration might well enter into your next transportation purchase or lease, and your next new (or late-model used) vehicle will likely come with safety and anti-theft features that earn you lower premiums.
Auto insurance rates also can be affected by where you live, since higher-crime areas bring more risk of theft or vandalism. And they are affected by age, since more mature and experienced drivers are statistically lower accident risks than newer, younger ones. There's nothing you can do about your age, but single folks can often save money (at least on insurance) by getting married. Married people are viewed as more responsible, and insurers usually offer discounts for couples and families insuring more than one vehicle...and perhaps their home and its contents...with them.
Beyond all those key factors are a variety of discounts offered by some (not all) insurers that can lower your payments on the vehicles you are currently insuring. For example:
- Annual mileage discount - for vehicles driven much fewer miles than average
- Anti-theft discount - for vehicles equipped with one or more anti-theft devices
- Daytime Running Lights discount - for vehicles with DRLs that light whenever the engine is running (because they make a vehicle easier to see even at a distance in daylight)
- Multi-car discount - for more than one private passenger vehicle at the same location
- New-vehicle discount - for vehicles three years old or newer (less each year)
- Passive restraint discount - essentially all '84-models and newer private autos
- Premier driver discount - for drivers with near-perfect claims and driving records
- Vehicle storage discount - for vehicles that are stored and not driven
So check with your insurance provider to learn which of these (and maybe other) discounts they may offer and for which you and your vehicle(s) qualify, then make sure the ones that do are being applied to your premiums. And you may well want to also invest some time in researching other providers to compare their rates and applicable for your vehicles.
Finally, you should be aware that some life changes will likely drive your auto insurance rates in the wrong direction. Among these may be getting divorced, moving to a higher-crime or accident-rate area, or adding a teenage driver to your policy. You will also very likely see your premiums increase after filing a claim (especially for an at-fault accident) and/or accumulating (typically two or more) traffic violations.
In fairness to insurance providers -- who won't stay in business long by underestimating risks to where they are paying out in claims more than they are earning in premium dollars -- their rates are not set arbitrarily or intentionally unfairly. All of these factors that determine your premiums are accompanied by long-term, risk-predicting experience and statistics. Your challenge in seeking the lowest possible rates is to offer providers the lowest possible risk.