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25 Easy Steps To Lower Your Monthly Auto Insurance Premium

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Updated November 6th, 2020

Are you tired of paying too much for your premium?

Would you like to get cheap coverage and a reduction in your monthly payment?

Since the average annual premium is nearing $1,400, I have compiled 25 ways to help you save big and get the best rate in your area to keep your monthly expenses low with your current policy. 

25 Quick & Easy Options to Lower Your Premium

These 25 identified options will help you get the best premium for the lowest price.

You can lower your premium if you fall into any of these categories of safe drivers:

Categories or Reasons
Looking for the best car insurance for young drivers.
Want the most affordable coverage for a luxury vehicle.
Looking for Pay-as-You-Go car insurance.
Your insurer is Amica, Progressive, Allstate or another major insurer.
You need cheap car insurance with full coverage.
Want affordable coverage but have bad credit.
Have outstanding credit and are ready to find cheaper coverage.
Want to pay less for coverage.
You may not be able to use all 25 of these options to pay less.

However, each one will help you save money on a policy in your area.

Comparison Shop

You can save money and pay less by shopping around for a car insurance policy.

Use a comparison platform to find cheap companies near you is an easy step to switching car insurance. 

You will be able to compare premium costs, deductibles, cover options and more.

Below are top comparison sites to get low quotes:

Top Comparison SitesRating*
Compare.com4.3/5
Insurance.com4.4/5
Quotewizard.com4.1/5
TheZebra.com4.7/5

*as of May 2020

Increase your Deductible

Low deductible rate plans often carry higher premiums.

An easy way to lower how much you pay for a car insurance rate is to raise your deductible.

Higher deductible plans are often less expensive and keep insurance costs low. 

Just keep in mind that you will have to pay more should you need to file a claim.

Here is an excellent article about choosing the correct amount for your deductible.

And below I have table showing you the cost difference for a $250 and $1,000 deductible:

Company$250$1,000Difference
Allstate$1,053$865$188
Erie$1,132$912$219
Liberty Mutual$1,094$911$183
Progressive$811$720$91
Mercury$1,108$925$183
State Farm$1,012$879$133

Look into Multi-Policy Discounts

If you have home or renter’s policy, you can pay less for a car insurance rate with multi-policy discounts.

Most companies offer additional discounts for the following plan combinations:

  • Home and Auto
  • Auto and Renter’s
  • Life and Auto
  • Life, Home, Auto

When comparing quotes, you should also compare combined home, life, and auto policy with quotes.

You’d be surprised how much money you can save by consolidating your policies with one provider.

Here are top companies offering multi-policy discounts: 

CompanyGood DriverMulti-PolicyMulti-Vehicle
Progressive
Farmers
Liberty Mutual
Allstate
Nationwide

Multi-Car Policy Discounts

Are you insuring different cars on different policies?

You can get cheaper coverage by moving those cars on to the same policy.

Pay Yearly or Biannually

Most car insurance companies want you to pay upfront for your policy.

They usually offer a percentage discount off your premium if you pay for the year in advance.

Contact the agent in your area today and ask if they will offer a discount if you pay for the full year.

Listed below are insurers offering 12-month policies and the percent discount you get:

Company12 month policy% discount
Erie15%
Liberty Mutual10%
MetLife10%
The General10%

Reduce Policy Add-ons

You have to keep your liability coverage, but companies love to push policy add-ons on customers.

They push add-ons because they are usually easy ways to generate more profit.

Do you think you are paying too much, and you want a lower premium?

Ask what add-ons your plan currently includes.

Some add-ons include:

  • Roadside Assistance
  • Accident Forgiveness
  • Gap Cover
  • Vanishing Deductible
  • Personal Injury Protection
  • Uninsured Motorist Protection
  • Underinsured Motorists Coverage
  • Medical Payments Coverage

Some add-ons are worth the price.

However, if you want to pay less for your premium, you should decide which ones you don’t need.

There is another article here explaining why uninsured motorist protection is one of the most powerful add-ons.

Review your Existing Policy

If you want more affordable car insurance rate, then make sure you know your existing policy.

You might be paying extra to get a better rental car if you have an accident.

What goes into your policy, like comprehensive, collision, property damage and bodily injury

*Personal Injury Protection (PIP) **Uninsured Motorists Protection (UMP)

Note: Illustrated above is the types of insurance in a policy. How much each costs depends on the amount of protection you have. Many times people get more protection than they need. If you look into your policy carefully you may be able to drop or lower coverages in areas you don’t need.

You might have a very low deductible and high monthly payments.

You’ll find ways to get lower your premium when you know exactly what your plan includes.

Ask for Loyalty Discounts

It’s no secret.

You are more likely to get cheaper quotes by shopping around.

However, if you really like your existing insurer, you can always ask for a loyalty discount to reduce your monthly expenses. 

Insurers offering loyalty discounts:

CompanyLoyalty discount% discount
USAA10%
Farmers 10%
GEICO10%
Allstate5%
Nationwide5%

Retirement

An insurance company usually offers biggest discounts for seniors.

If you are 55-years old or older, contact your local agent today to talk about discounted rates.

If you’re probably less than you did when you were working, you’ll be able to get an even more affordable premium thanks to reduce mileage.

Additionally, you may qualify for an AARP discount if you are an active member.

Below are car insurance companies offering programs for those 55 and older:

CompanyProgram
Allstate55 and Retired
GEICOPrime Time contract.
The HartfordRecoverCare program

Good Grade (Student)

Retirees aren’t the only group that is eligible for discounts.

If you’re in the market for low-cost premium for young drivers, you better get your grades up!

Insurers often offer a discount for students that provide a report showing outstanding grades.

There is an article here explaining why Allstate has one of the best student discounts available.

Below are insurers offering packages for students with good grades and other options:

CompanyGood student discountStudent away at schoolYoung driver training
AllstateUp to 35%Up to 35%Up to 35%
Amica15-25%VariesNo
ErieNoVariesVaries
EsuranceVariesNoNo
FarmersVariesVariesVaries
Liberty MutualVariesVariesNo
NationwideVariesVariesNo
ProgressiveVariesVariesNo
Travelers8%7%8%

Affiliate

Organizations typically offer special perks for their members.

Usually these perks involve some sort of discount.

For example, you can get an AARP discount with a membership.

Teachers’ unions like NYSUT offer discounts for their members.

Not sure if you qualify for an affiliate discount?

You might qualify for a discount if you are in a group that:

Has at least 50,000 active members

  • Professional association
  • University or alumni association
  • Charity

Employment

Depending on your place of employment, you may qualify for cheaper auto policy with an employment discount.

Depending on your profession, contact your company today and ask about these discounts:

  • Nurses
  • Teachers
  • Federal employee
  • Law enforcement
  • Homeowners

Below are popular companies offering discounts for teacher, government employees and law enforcement:

CompanyTeacherFederal EmployeeLaw Enforcement
Allstate
Farmers
Liberty Mutual
Nationwide
Progressive

Military

Active duty and ex-military also qualify for discounted rates on their policy.

The brave men and women that serve in our nation’s military deserve the best.

If you are military veteran, contact the agent near you and ask about discounts for veterans or military.

I have an awesome article explaining why USAA is the best for military and veterans.

Below are companies offering perks and benefits to military personnel:

CompanyMilitary Benefits
USAAIf you store your car while deployed, you’ll receive up to a 60% discount on your auto insurance.
GeicoUp to a 15% auto insurance discount for retired or active duty military.
EsuranceAllows service members to cancel and reinstate auto insurance policies.

Reduce your Coverage

When you first purchased your current plan, there is a good chance your local agent sold you more than you really needed.

Getting the proper level of coverage can be tricky. 

When you compare car insurance quotes online, you can see how much money you can save if you lower your protection amount.

If you have an older car, you could save hundreds of dollars each year by dropping comprehensive and collision cover.

If you have a car payment, loan, or lease you will have to keep both on your auto insurance premium. 

Below are various states with the cost of a full coverage policy.

And the cost of stripping comprehensive and collision plus the potential savings:

StateFull CoverageLiability policySavings
Delaware$1,580$697$883
California$1,916$962$954
Florida$1,830$1,009$821
Georgia$1,391$593$798
Kentucky$1,496$612$884
New York$2,456$1,169$1,287
Tennessee$1,693$986$707
Texas$1,495$768$727
Washington$1,863$1,047$816

Get a Car Alarm

Car alarms can be a useful tool to boost the security of your car.

It is a common safety feature with most vehicles today. 

Most insurance companies offer a discount when a car alarm is installed.

Take a Defensive Driving Course

If you have received any tickets or gotten into an accident recently, then taking a defensive driver course is a must.

Even if you have a relatively clean driving history, defensive driving courses can lower your monthly bill.

These courses usually have an enrollment fee and take a few hours.

However, the savings you will get from car insurance companies makes it well worth it.

Clean up your Driving Record

People with a clean driving history almost always pay less for a premium. 

You can lower get a lower rate if you get these items removed from your driving record:

Your driving history is considered when coming up with your annual premium.

That is why it is important to clean up your driving record if you want to pay less to your insurance company.

Address All Car Safety Issues

Fixing car safety issues can help you prevent unnecessary accidents that could raise your existing policy.

Or prevent you from getting a moving violation depending on safety features that don’t work. 

Check your car manufacturer’s website for any open recalls.

Your current insurance company may have information about open recalls too. 

They will fix recall problems for free, keeping you safe and your current insurance payments low.

And it could keep your vehicle out of the repair shop. 

Mechanical breakdown coverage is another option.

I have an article explaining the pros and cons of it. 

Look into Carpooling (Drive Less)

The less you drive, the lower your premium will be.

You can find out how much you can save on insurance options when you compare rates online.

By carpooling or using public transportation when available, you can cut back on your car’s mileage and pay less for a premium by driving less.

Mileage discounts are handed out often by insurers.

Below is table showing the savings if you drive less per year:

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

Reduce your Daily Commute

You will be asked how far your daily commute is when you fill out a quote online.

That is because companies use that information to figure out how much you drive.

Carriers lower rates for those that prefer mass transit and leave their car at home.

And it’s a sure fire way to keep a safe driving record. 

You don’t need to get a new job or move to reduce your daily commute. Instead, you can:

  • Carpool with someone else at work
  • Take public transportation to work when available
  • Look into your employer’s work-from-home policy

When you drive less, you will be able to take advantage of pay-as-you-go safe-driving program.

With pay-as-you-go coverage, your monthly budget plans depends on how much you drive.

You can get it from Allstate or a Progressive auto policy. 

When you drive less, you pay less; it’s as simple as that.

Avoid On-Street Parking

On-street parking is a risk-factor that can increase how much you pay for a premium.

Depending on your local town or city, you may be able to rent secure parking in a garage at a low price.

To find out if you will save money by renting garage space, you can compare car insurance quotes.

Improve your Credit Score

Your credit score not only impacts loan rates; it also might impact how much you are paying for an auto premium.

By increasing your score by 100 points, you could save up to ten percent on your insurance rate for additional savings. 

If you struggle with a low credit score, you can get coverage for bad credit until your score improves.

Below is table showing the price difference with a low and high score:

StatePoor (300-579)DifferenceExcellent (800-850)
New Jersey$2,31831%$1,765
North Carolina$2,49836%$1,832
Oregon$2,20053%$1,432
South Carolina$2,01535%$1,487
Vermont$1,70031%$1,294
Virginia$1,40943%$986

Consider Getting a Different Vehicle

It’s no secret that some cars cost more to insure than others.

Therefore, the type of vehicle you drive makes a difference. 

An annual premium doesn’t always cost more for new cars or less for older cars.

The more the automobile costs, the more it costs to insure.

However, with an older car, you might be able to eliminate comprehensive and collision coverage options to reduce your premium significantly with your current provider. 

If you want to see how much money you can save on auto coverage by getting a different car, you should compare car insurance quotes online.

Relocate

This option isn’t always the easiest.

However, it could possibly help you reduce your monthly or annual payment.

If you live in a high-risk or dense area, you are probably paying more each for a premium.

By moving to a newer, less dense area, you can lower your premium.

Never Assume

Finally, you should never assume you are paying the cheapest rate.

Car insurance companies will sell you add-ons you don’t need and premiums are changing all the time.

Plus, try not to have monthly expenses from your carrier to be as much as your car payment. 

You should compare car insurance quotes online every six months and check online customer reviews

By comparing rates, you can make sure you that pay less, keep monthly bills low, and get the car insurance discounts available to you.

Sources

https://www.tdi.texas.gov/pubs/consumer/cb020.html

Greg Fowler

Greg Fowler

Managing Member of AutoInsureSavings LLC, Greg has been in the insurance industry for 12 years and enjoys rebuilding vehicles. His goal is to help drivers save on anything related to automobiles. Travel and enjoying the outdoors are some of his hobbies. The best way to reach him is at his Twitter or Facebook Profile.

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