Four Tips to Save on Car Insurance

Four Tips to Save on Car Insurance

Find Cheap Auto Insurance Quotes in Your Area

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For drivers across the country, car insurance is a significant expense—costing, on average, more than $1,500 per year. However, drivers who know the following tips can save money on car insurance. These include comparing multiple quotes, utilizing discounts, keeping young drivers on their parents' insurance and increasing your deductible for comprehensive and collision coverage.

Tip 1: Compare Car Insurance Quotes

Shopping around for car insurance is often the best way to save on insurance. We found that comparing quotes to find the cheapest policy can save you as much as 50% on your annual car insurance costs compared to going with an insurer with average rates.

Insurers consider a number of elements when setting rates, meaning the cheapest company for you will vary depending on your driver profile. Your age, whether you've been in accidents and what car you drive all have an effect on your auto rates, and comparing quotes is the only way to identify which company can help you save the most.

Tip 2: Utilize Discounts

There are several "standard" auto insurance discounts that nearly every insurer offers, such as multivehicle and multipolicy discounts. What drivers may be less familiar with are the dozens of niche discounts that can add up to hundreds of dollars in savings on car insurance each year.

Affinity Group Discounts

Many car insurance companies offer reduced car insurance premiums for drivers who are members of certain affinity groups, such as AAA. Geico, in particular, has teamed with hundreds of professional and alumni organizations—including fraternities and sororities—to help drivers save money on their car insurance.

Good Student Discount

High school and college students who are able to maintain good grades—usually at least a 3.0 GPA—are eligible for a good student discount with most insurers. We've found that student drivers can get up to a 25% savings on their car insurance costs with certain insurers. Often, to qualify for this discount, all you have to do is submit a copy of your transcript to your insurance company.

Occupational Discount

Depending on the field you work in—and in some cases, your employer—you may qualify for a discount with some auto insurance companies. For example, educators and teachers can expect to receive discounts from Liberty Mutual. Similarly, emergency responders, including police officers, firefighters and EMTs, receive discounts on their auto insurance from Farmers Insurance and Nationwide.

Electronic Billing Discount

Many national insurance companies offer a discount for agreeing to pay your premiums electronically or choosing to receive paperless statements via email. Drivers who take advantage of these car insurance discounts could save as much as 10% on their coverage costs.

Tip 3: Keep Young Drivers on Their Parents’ Policy

Having a young driver on their parents’ policy usually results in much lower auto insurance costs. Compared to the cost of insuring a teen driver on their own policy, we found that adding young drivers on their parents' plan can save 66% on car insurance.

The flip side, however, is that insurance rates for the parents could increase if their children get into a car accident and have to file a claim. It’s wise to explore pricing for both a separate policy for your teen driver and for adding them to (or retaining them on) the family policy, and to consider both premium costs and your comfort level with their driving.

Tip 4: Adjust Your Collision and Comprehensive Deductible

Opting for a higher comprehensive and collision insurance deductible is an easy money-saving tip for individuals who can afford to pay more out of pocket for car repairs in the event of a covered accident. Based on our research, increasing your deductible from $500 to $1,000 can reduce the cost of coverage by 25% for comprehensive and collision coverages. Furthermore, if your car is worth less than a few thousand dollars, dropping collision coverage altogether would reduce your car insurance premiums even more.

Bailey is a Research Analyst at ValuePenguin, covering insurance. He graduated from Occidental College with a B.A. in Mathematics and a minor in Computer Science. Bailey's analysis of the insurance industry and driver behaviors has been featured by CNBC, the Houston Chronicle and the National Transportation Bureau Safety Board.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.