How to Lower Your Car Insurance Premiums

• Make sure to check out all the discounts for which you qualify
• Don’t pay for more car insurance than you need
• Consider a cheaper car 
• Get married!

Many factors, large and small, help auto insurance companies determine how much they charge for policies, beginning with the types of vehicles. It should come as no surprise that insurers charge more to cover newer and more expensive cars. New cars will be more costly to repair or replace.

Also, higher-performance vehicles typically tend to have higher premiums. That’s likely because insurers consider their drivers (perhaps unjustly) as 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. Though your next new (or late-model used) vehicle will likely come with safety features that earn you lower premiums.

Read on and get tips to make car insurance cheaper.

What Does Car Insurance Cost?

According to Bankrate and 2021 Quadrant Information Services data, the average car insurance costs Americans $1,674 per year for “full coverage,” or about $139.50 per month. Minimum coverage costs an average of $565 annually in the United States.

RELATED STORIES: 10 Easy Ways to Lower Your Car Insurance Costs

These national averages are for drivers with clean records, meaning no accidents or mishaps. However, insurers base their premiums on many factors, including age and marital status. Insurers reward more mature and experienced drivers with lower rates since these drivers statistically bring lower accident risks than newer, younger ones.

You can’t do anything about your age. But single drivers can usually save money on car insurance once married. Insurers view married people as more responsible. They offer discounts for couples and families insuring more than one vehicle.

Auto insurance rates also can increase or decrease depending on where you live. For example, in larger cities, higher-crime areas bring more risk of theft or vandalism, so insurers weigh those factors when considering your rate.

How to Get Cheaper Auto Insurance Rates

Beyond all those key factors are a variety of discounts offered by some (though not all) insurers that can lower your payments on the vehicles you are currently insuring. For example:

• Annual Mileage Discount: For vehicles driven fewer miles than average.
• Anti-theft Discount: For vehicles equipped with one or more anti-theft devices.
• Daytime Running Lights Discount: For cars 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 cars three years old or newer (less each year).
• 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 offer. Find out which you and your vehicle(s) qualify, then make sure the ones that do get applied to your premiums. And you may well want to also invest some time in researching other providers to compare their rates.

RELATED STORIES: 7 Biggest Car Insurance Discounts for 2021

How Life Changes Affect Auto Insurance Premiums

Finally, you should be aware that some life changes will likely drive your auto insurance rates in the wrong direction. Those include:

• Getting divorced: File for divorce, and your insurer will update your rates, most likely with an increase.
• Moving to a large city: If you change residences and your new one is in a larger city with higher crime rates, you can expect your insurance premiums to go up.
• Living in a place with more traffic density: If your new home, condo, or apartment sits near busy intersections with a high volume of car accidents, insurers will weigh the risks, likely causing a rate increase.
• Adding a teenage driver to your policy: Studies show that teen drivers cause more accidents than experienced, older drivers. When yours wants to drive, and you add them to your policy, your rates will jump. See our story on how to monitor your teen behind the wheel and find a safe new or used car for your teen.
• Filing a claim: You will also very likely see your premiums increase after filing a claim (especially for an at-fault accident), or accumulating (typically two or more) traffic violations.

In fairness to insurance providers, their rates are not set arbitrarily or intentionally unfairly. Insurers would not stay in business long by underestimating risks to pay out in claims more than they earn in premium dollars.

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.

Do Your Research

Lastly, do your homework before choosing insurance from a smaller, less-familiar provider based on price alone. The very nature of insurance means size is an essential factor when selecting a provider.

Read Related Stories on Car Insurance:

• What Auto Insurance Do I Need to Buy?
• Compare Car Insurance: How to Choose the Right Policy
• What Does Full Car Insurance Cover?