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12 Budget Saving Tips for Car Insurance

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Vehicles are one of the most expensive things we buy, and they lose their value almost immediately. With the rising costs of vehicles and the increase in lawsuits surrounding accidents, car insurance rates are also on the rise. In 2007, the annual car insurance premium was $798.54, and in 2016, it was up 5.4% to $935.80.  The industry isn’t expecting a decrease in rates over the next few years, but there are a few ways you can decrease your rates individually. Here are 12 budget-saving tips for shopping for car insurance. 

1. Insure Multiple Cars/Drivers

Bundling services is all the rage, and this applies to car insurance as well. Often, a quote for one vehicle is higher than if you wanted to cover two or three. The same is true for the number of drivers you’re looking to insure. A discount for multiple cars and drivers is beneficial for the company and for you. 

There are usually some rules on who you can add to your policy, but if you share a residence and can prove a relationship, you stand a good chance of qualifying. This discount can also apply to two people who aren’t related but co-own a vehicle. 

On top of a discount for more than one car or driver, you may also receive a discounted rate if you use the same company for your home or renter insurance and your auto insurance. Ask your AFI representative what other services are available in your area to see what meets your needs.

2. Keep a Clean Record

There’s no more straightforward way to keep your car insurance premiums down than keeping a clean record. Accidents and moving violations will increase premiums, and the opposite is also true. Some companies offer a discount for several years of clean driving. A clean driving record is an excellent goal for all drivers! 

3. Take a Defensive Driving Course

Did you know that taking a defensive driving course can lower your insurance premium? Some insurance companies will discount premiums after a driver has taken classes to improve their driving skills. Check out the accredited courses available (some are available online) and the cost and time it takes, as you’ll want to make sure it’s a good deal. 

4. Shop Around

You may have heard rumors that companies increase your premiums after the first renewal. Sometimes this is true. If you notice your policy increased considerably after a renewal, talk to your insurance company. Sometimes the rates simply spike. And sometimes, it’s better to shop around for other options.

There’s much more to a car insurance policy than the price, however. You want a good, quality company on your side. Make sure to do your research!

5. Reduce Your Mileage

Do you have to drive your car to work every day? When your car insurance company asks you how many miles you drive each year, they are using that number to determine your risk. If you drive 60 miles to work each way, your rates will be higher than someone who takes the bus or train. Are there ways you can reduce your driving risk and your miles? Check with your insurance agent to see what kind of discounts may be available if you start carpooling or using public transportation.

6. Select Your Vehicle Carefully

Your vehicle type definitely plays a role in how much you’ll be paying for insurance. Older cars are cheaper to replace and, therefore, less expensive to insure — most of the time. Smaller cars are generally cheaper to insure than a large SUV. Consider all the options and variables when car shopping, and when shopping for insurance. 

7. Consider Raising Your Deductibles

Most people have insurance with a $500 deductible. In fact, when using online quote generators, those are usually the default. But you may not need to have a $500 deductible. Typically, a lower deductible means a higher premium. And the opposite is also true. If you’re in a position where $1,000 deductible is something you can easily manage, you may want to increase it and save some money on your premiums. 

8. Improve Your Credit Rating

Your credit rating is another factor in your insurance premium. It may not be fair, but companies often look at the financial security and responsibility of an individual and assume that carries over to the rest of their life. So someone with a good credit score will probably be a responsible driver. 

9. Pay Attention to Where You Live

If you have a choice in your next move, give a quick look at insurance rates. Some states have different requirements that will make the cost of your insurance premium higher. The military won’t likely care what you think, but if the difference between one state and the other is vast, that may impact your housing choices. At the least, you can budget for the change. 

10. Drop Unnecessary Coverage

Dropping coverage for something you may not need is an option in reducing your premium, but it shouldn’t be the first one. Just because you didn’t need that coverage in the past, does not mean you won’t need it in the future. But, sometimes, it makes sense. You may not need rental coverage on your second vehicle. Or collision coverage on a very, very old car. Consider the value of the car and the deductible and talk to your insurance agent before making drastic cuts. 

11. Install Anti-Theft Devices

Just like a burglar alarm may lower your home insurance premium, a car alarm may also lower your insurance premium. Anti-theft devices are more common in newer vehicles and can be an easy way to reduce the cost of your premium. Get the details from your insurance agent and do a quick cost-analysis.

12. Question Your Agent

Sometimes the easiest way to save money is to ask. Ask your insurance agent if there are any additional discounts available. Sometimes there are “good student” rates for teenage drivers or discounts for professional associations or memberships.


Chances are, you’d be pleased to pay less for your car insurance without sacrificing the quality of your coverage. Start with these 12 tips and make sure to as your agent for the best deal. For more questions on coverage, talk to your AFI insurance representative today. 

Source: ©2010 Yahoo Finance finance.yahoo.com