5 Easy, Yet Simple Lifestyle Choices To Lower Your Car Insurance Premium Fast
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UPDATED: Oct 31, 2020
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Over the last half-decade, you’ve seen commercial after commercial advertising ways to lower your car insurance.
Insurers seem to be offering up discounts to anyone that wants them.
The promises made in these commercials aren’t exactly false.
Believe it or not, the major carriers are actually telling the truth in that they’ll help you save a few dollars.
However, what’s a few dollars when you’re already paying through the roof on your car insurance bill each month?
Illustrated above are lifestyle changes you can do to lower your premium. Your vehicle type, driving record, and credit score are going to make the largest impact on your premium. Shopping for a new insurer will have a slightly lower impact. Mileage has the least significant impact. I’ve included the coverage amount, but I’m not covering that in this article.
What these borderline annoying yet somehow amusing commercials fail to tell you is that there are things that you can do without the help of a talking animal or former NFL MVP to save big money on your monthly bill.
By making the following lifestyle changes, you reduce your premium and fatten your wallet with extra spending each month.
Below I have compiled a quick guide for you:
|Vehicle||The type of vehicle you drive can make a significant difference in your monthly premium.|
|Clean Record||Maintain a clean driving record is the best way to keep your premium low.|
|Credit Score||In 47 states insurers can use your credit score to determine your premium.|
|Mileage||Driving less can lower your premium slightly. Less driving equals less chance of accidents.|
|Comparison Shop||Every year or so, you should get quotes from other companies to compare coverage and price.|
Get a Reliable Car That Doesn’t Scream for Attention
When it comes time for you to purchase your next car, skip over the fast and furious, and take a long, hard look at a reliable car instead.
That reliable yet possibly somewhat boring car may not catch a glance from the opposite sex, but the extra zeros in your bank account from your savings sure will.
What cars are the cheapest cars to insure?
The Subaru Outback, Jeep Wrangler, and Honda CR-V.
If you drive any of those vehicles, you can be sure you are paying 10 to 20% less for coverage than your family or friends.
In the table below are 16 vehicles and the average cost to insure them:
|Make & model||Average premium||Starting MSRP|
|Dodge Ram 1500||$1,656||$32,145|
Stop Getting Pulled Over and Avoid Accidents Like the Plague
Okay, so not everybody can afford to go out and buy a reliable car tomorrow.
However, there is still plenty you can do to reduce your premium significantly.
It may be stating the obvious, but you’re on the road, drive a little more carefully.
How much more are drivers with a poor record going to pay for a premium?
Depending on the points, a driver with a poor record will pay 14 to 45% more.
Avoid falling victim to speed traps by, dare I say it, driving closer to the speed limit.
Those speeding tickets amount to fines, potential points, and an almost guaranteed spike to your premium.
Need I say anything about accidents?
I remember a good friend from college, showing off his insurance check after totaling his car in an accident.
He wasn’t just happy that his car was wrecked – he was thrilled.
That is until he saw how much more he had to pay in insurance premiums when his policy was renewed.
To put it bluntly: the safer you drive, the more you will save on car insurance.
After all, you can only take defensive driving so many times!
Below is a table showing drivers with a good and poor driving record:
|Good record||Poor record*|
|Vehicle||Nissan Rogue||Nissan Rogue|
*driver with 6 points on driving record.
Improve Your Credit Score
Seriously, what doesn’t your credit score impact nowadays?
From mortgage rates to determine whether or not you get the job you want, your credit score can influence just about everything and anything in your life now and in the future.
Did you know if you get a loan and your credit score declines, your premium will go up?
Your credit score plays a major factor in the amount you’ll pay each month when it comes to your premium.
That means that those with higher credit scores typically get better rates and save more on their premium.
There’s also the fact that those with better credit scores tend to be involved in a few accidents.
The numbers don’t lie.
Below I am showing the cost of a premium from the same company with a poor and excellent credit score:
|Company||Poor (300-579)||Difference||Excellent (800-850)|
As you can see, your credit score can affect your premium by 74%!
How much more will you pay for a premium with a poor credit score?
It depends on the company.
Most drivers see their premium increase by 21% if their credit score takes a significant hit.
Drive Less Frequently
The more you drive, the greater your chance is of being involved in an accident.
When determining your rate, insurers take into consideration the number of miles you drive.
Naturally, those that drive less will pay a reduced rate compared to those that seem to live on the road, according to Allstate.
Does driving less really lower your premium?
Yes, it does, but not by much.
If you drive 10,000 miles in a year rather than 20,000, you could save about $25 over 12 months.
Driving less reduces the chance of an automobile accident.
That’s the key point.
|Annual mileage*||Premium Rates|
|10,000 - 15,000 miles||$1,532|
|15,000 - 20,000 miles||$1,548|
|20,000 - 25,000 miles||$1,579|
|25,000 - 30,000 miles||$1,610|
While it may not be possible to change jobs or even bike to work, you could start driving less by consolidating the number of additional trips you take by car.
By combining a few errands into one trip, you’ll drive fewer miles and use less gas.
That equates to more savings across the board!
As I stated earlier, there is some truth behind the advertising campaigns of insurers.
Can you save more by shopping around?
Yes, if you’re already driving a reliable car, have great credit, drive minimal miles, and are ticket and accident-free, you could still actually save a little more by shopping around.
In the table below, I got two quotes from the same company with a different price each time:
|Company||1st quote||2nd quote|
And you can see the price difference among companies.
The difference between Travelers and Progressive is over $100.
When it comes time for you to renew your policy, you’ll likely see an increase in your premium no matter how amazing of a driver you are.
Most insurers take advantage of the fact that customers would rather not shop for the lowest rate year-after-year.
By shopping around and changing companies at renewal time, you could actually save a decent chunk of change.
That’s right – it actually pays not to be loyal!
Who would’ve thought?
Tired of overpaying for car insurance?
You should be.
While the major insurance firms may all be telling the truth about the savings you could get by shopping for rates, the considerable savings come from lifestyle choices that you can make on your own.