Looking for affordable car insurance can sometimes feel like scouring for Black Friday bargains. You have a clear idea of what you want, but comparing prices from different companies can be overwhelming. With each insurer having a distinct pricing model, it can be challenging to determine the best deal.
Car insurance costs are on the rise, prompting many to seek out cheaper coverage options. A 2024 J.D. Power study found that nearly half of American car insurance customers have shopped around for a new policy in the past year.
Despite the increasing rates, there are steps you can take to secure more affordable car insurance.
1. Collaborate with an Agent
The most effective way to find affordable car insurance is to compare insurance quotes from multiple insurers annually. While this process can be time-consuming, an independent agent can do the legwork for you. They have access to a variety of insurers, including smaller regional ones that may offer more cost-effective coverage than larger companies. An agent can also help you identify available discounts and select suitable coverage limits.
To find an independent agent, consider asking for recommendations from friends or family, conducting online searches, or checking insurer websites or national networks of independent agents.
2. Inquire About Discounts
Don’t assume you’re receiving every discount you’re eligible for. Speak to your insurer or agent about potential discounts to ensure you’re maximizing your savings.
While you may not qualify for every discount offered by your insurer, common ways to save include:
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Bundling multiple policies with the same insurer.
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Maintaining a clean driving record or completing a defensive driving course to be a safe driver.
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Opting for paperless billing or setting up automatic payments.
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Driving a vehicle equipped with anti-theft or specific safety features like airbags or anti-lock brakes.
3. Raise Your Deductible
If your policy includes a deductible — the amount you’re responsible for in a claim — increasing this amount can lower your car insurance costs.
Ryan Andrew, president of the Andrew Agency, has noticed more customers raising their deductibles to maintain affordable auto policies. “Our standard deductible is currently $1,000, the highest it has ever been,” Andrew explains.
If you opt to increase your deductible, ensure you have enough funds available to cover the amount. Typically, the deductible will be deducted from a claim payout. For instance, if your insurer approves a $10,000 claim and you have a $1,000 deductible, you’ll receive a claim check for $9,000.
4. Assess the Necessity of Full Coverage
If your policy includes comprehensive and collision coverage (two components of “full coverage” insurance), you might consider dropping them if you drive an older vehicle with minimal value. These coverage types only pay up to your car’s current market value, minus the deductible. If you could afford repairs for your older car after a severe accident, eliminating these coverages could lead to savings on your premium.
While comprehensive and collision coverage aren’t mandatory for legal driving, you might still need them if you have an auto loan or lease.
5. Improve Your Credit Score
Many states permit insurers to use a credit-based insurance score to determine auto insurance rates. Poor credit can significantly raise your policy’s cost. Drivers with poor credit pay an average of 60% more for car insurance than those with good credit, according to BW’s July 2024 analysis of auto insurance rates for 35-year-old drivers with clean records.
Improving your credit score can lead to substantial savings on car insurance. To enhance your credit, focus on paying bills promptly and keeping credit card usage below 30% of your limit.