10 Best Ways To Lower Your Car Insurance Costs

By Zach Buchenau

Last Updated: December 28, 2020

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How to lower your car insurance costs | Be The Budget

If you’re looking to lower your monthly expenses, one of the best steps you can take is to reduce your car insurance costs. In fact, if you know what you’re doing, this one little step could increase your savings by hundreds of dollars per year.

In even better news, reducing your monthly car insurance premium doesn’t take that much time. Seriously, even just a few minutes of effort can lead to an impressive increase in savings.

The question is, how do you go about it?

Well, that’s exactly why we’re both here. In this article, I’m going to cover 10 of the best ways to reduce your car insurance costs.

So, if you’re ready to find a little extra room in your budget, and make a positive impact on your monthly savings, keep reading!

1. Shop Around

Starting off, the simplest way to reduce your monthly car insurance premium is to shop around and get quotes from multiple providers. This is especially important if you’ve been insuring your car through the same provider for more than a year or two.

And here’s the best part, this shouldn’t take you more than about 15 minutes. Seriously, with so many providers offering free online quotes these days, you can get quotes from multiple providers in less time than it takes you to drink a cup of coffee in the morning. (Trust me, I’ve tested it!)

So, where should you get car insurance quotes?

Well, if you’re looking for a suggestion, we recommend getting online quotes from: Liberty Mutual, Allstate, Nationwide and Esurance. However, the more quotes you get, the better. So, don’t be afraid to expand your search to other providers as well.

2. Use A Quote Comparison Tool

If getting quotes from multiple providers feels a little overwhelming for you, then our next suggestion is to use an insurance quote comparison tool.

The only downside to this option, is that it can result in a flood of emails entering your inbox within a matter of minutes. But, in the name of both convenience and saving money, that is a pretty small price to pay. (No pun intended!)

If you’re looking for a great car insurance quote comparison tool, the only websites we recommend are Insurify, or EverQuote. There are other options out there, but in our experience, these are the most user-friendly.

3. Opt For A Higher Deductible

As with any form of insurance, if you want to reduce your monthly premium, one of the fastest ways to do so is by opting for a higher deductible. Though, this is something we only recommend if you are a very safe driver.

In other words, if you are the kind of person that is prone to cause accidents, then picking a plan with a higher deductible is actually a bad idea. After all, what’s the point in saving money on your monthly premium if you are just going to have to shell out a bunch more money to fix your car when you back up into a stop sign?

Ultimately, the role of car insurance is to protect your finances in the event of an accident. So, don’t take this decision lightly.

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4. Drive Safely And Obey The Law

In the long run, if you want to get the best rate possible on your car insurance (with any provider) the best thing you can do is drive safely. Remember, the more insurance claims you file, the more likely it is that your premium will go up.

Additionally, you might not know this, but speeding tickets, and other driving offenses are known to increase the cost of your insurance. So, if you want to keep your rate as low as possible, be sure to obey the laws of the road.

In other words, put your phone down while you’re driving. Check your blind-spots whenever you change lanes. Watch your speed. And for goodness sake, don’t get behind the wheel if you’ve been drinking.

10 best ways to lower your car insurance costs | Be The Budget

5. Take Advantage Of Low-Mileage Discounts

If you don’t spend a ton of time driving, or you have a short commute, you should ask your insurance company if they offer a low-mileage discount.

Here’s the thing, the less you drive, the less likely you are to get in an accident. And the less likely you are to get into an accident, the more willing your insurance provider will be to offer you a cheaper rate.

As a good rule of thumb, if you drive less than 7,500 per year, check with your insurance provider about a discount. This is one of the lesser-known ways to lower your car insurance costs.

6. Drive An Older (Or Less-Expensive) Car

In short, the more expensive of a car you drive, the more costly it will be for your insurance company to pay for repairs in the event of an accident. And that extra cost is sure to increase your monthly insurance premium. It’s only logical. After all, insurance companies need to make a profit in order to stay in business.

So, if you’re driving around an expensive, luxury car, but you’re tired of paying out the nose for insurance, then you might want to consider selling your car and buying a cheaper ride.

This can have a massive impact on your monthly premium, and financial life as a whole.

7. Bundle Multiple Policies

Unless you’ve been living under a rock for the last 20 years, you’ve probably heard the phrase “bundle and save” on a car insurance commercial at some point in your life. And while it might not have meant much to you at the time, this is a great way to lower your total monthly insurance costs as a whole.

But what does it mean, exactly?

Well, in many cases, insurance providers will give you a discounted rate on your insurance if you purchase more than one policy (i.e. a home insurance policy and an auto insurance policy). So, if you are currently paying insurance premiums to multiple providers, then you might want to consider bundling your policies with the same provider.

Depending on the policies you bundle, this could seriously lower your monthly insurance costs.

8. Take Advantage Of Good Student Discounts

In the simplest terms, if you have a student in the family, or you are a student that pays for your own car insurance, be sure to check with your insurance provider about a “good student discount”.

In some cases, insurance providers will offer a discount for students that maintain a GPA of 3.0 or higher. Though, to be clear, not every provider offers this.

Either way, if your child has good grades (or you are a student with good grades), it’s worth a call to your insurance agent. They might just offer you a discounted rate.

As my dad always says, “you don’t ask, you don’t get.”

9. Pay In Full

Have you ever heard the phrase, “a bird in the hand is worth two in the bush”?

Well, I’m not sure who came up with that saying, but there’s a good chance it was an insurance agent.


Well, many insurance companies will offer you a discounted rate if you pay for your policy upfront, rather than on a monthly basis. So, if you have the financial capability, I recommend paying for your insurance policy in full.

It might be tough at first, but it could result in a nice chunk of savings.

10. Don’t Forget Senior And Military Discounts

If you are over the age of 65, or you are active-duty military, many insurance providers will offer you a discounted rate.

You see, in most cases, senior citizens tend to drive less, and more carefully, than younger people.

Also, members of the military are some of the most responsible, law-abiding people around.

So, if you fit into either one of those categories, be sure to ask your insurance provider about discounting your premium. In some cases, this could save you quite a bit of money each year.

On a more personal note, if you are a member of the military, we at Be The Budget would like to thank you for your service!

Final Thoughts

Lowering your monthly car insurance costs is one of the best ways to increase your monthly savings. Even if you only save a few bucks each month, the long-term results of that extra money can make a nice impact on your finances.

Think about it like this: even if you only save $10 per month, that’s $120 every year that you get to keep. I don’t know about you, but that’s more than enough incentive to get me to shop around, compare rates, and ask my insurance agent about some discounts.

Did you find this article helpful? If so, be sure to subscribe to our email list! Here at Be The Budget, our goal is to help our readers save more money, earn a better living, and improve their financial life. So, if that sounds good to you, we’d love to have you join our community!

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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