Buying a car is a big investment. For most people, it's the second-most valuable asset they'll ever own. But the costs don't end once a car is paid off. There are several ongoing expenses that car owners have to worry about. And among those, there's no greater ongoing expense than car insurance.
In the US, the average car owner pays $136 per month to insure their vehicle. That's a hefty sum — and it's not optional. In most places, car insurance is a requirement, and failure to carry it while driving is a crime. That said, there are some ways that car owners can lower the cost of their car insurance. Here are the five best methods.
Choose Your Vehicle Wisely
The fact is, some cars are more expensive to insure than others. In many cases, you can use a vehicle's sticker price as a handy way to tell how expensive insuring it will be. But vehicle cost isn't the only factor. For example, electric vehicles tend to be more expensive to insure because insurers must pay more to repair them if you have an accident. And, any car that's popular among thieves will carry a higher insurance cost, too. So, choosing the right vehicle in the first place is an excellent way to lower your insurance costs.
Improve Your Credit Score
Although many people don't realize it, driving records aren't all that car insurers look at when determining rates. They take a variety of socioeconomic data into account, in addition to the location of the insured vehicle. And that's why one of the most effective ways for drivers to lower their insurance rates is to work on improving their credit scores. Insurers use credit scores as a data point in their rate calculations, and studies have demonstrated that drivers with bad credit pay around 61% more than drivers with average credit – and almost double what those with very good credit pay.
Take an Approved Defensive Driving Course
Part of the formula that determines car insurance rates has to do with how well an insurer thinks you can drive. That's why many auto insurers will offer discounts to drivers that have completed a defensive driving course. The idea is that drivers with some training should get into fewer accidents. But beware — not every defensive driving course qualifies, so check with your insurer for details before signing up for one.
Install an Anti-Theft System
For insurers, there's nothing more expensive than covering the cost of a stolen vehicle. That's why most insurers offer discounts for cars that have an anti-theft device installed. The good news is that many new cars these days come with passive alarm systems that should qualify for available insurance discounts. And if yours doesn't have one, you can always install an aftermarket alarm that will qualify. And once you have it installed, all you'll need to do is let your insurer know about it and you'll start to see the savings right away.
Take Time to Shop Around
Although it seems like obvious advice, one of the best ways to save on car insurance is to shop around. And it's especially good advice for those who have kept the same insurer for years. The reason it works is simple. Even though it may not be apparent — there is plenty of competition amongst insurance carriers. But that doesn't mean every insurance company will pass on savings to their loyal customers. That's why switching insurers can yield some impressive savings. According to some recent data, drivers saved an average of $416.52 per year by switching carriers — and it costs nothing but a little bit of research time.
The Bottom Line
It's no secret that car insurance is expensive. But with a little planning and effort, it is possible to save yourself some money while maintaining the insurance you need. The five methods above can add up to some significant savings, particularly when applied together. So, if you're dreading your next car insurance payment, don't worry — because now you know how to lower your car insurance bills for good.
Disclaimer: This article is for informational purposes only and is not intended to be a substitute for professional consultation or advice related to your health or finances. No reference to an identifiable individual or company is intended as an endorsement thereof. Some or all of this article may have been generated using artificial intelligence, and it may contain certain inaccuracies or unreliable information. Readers should not rely on this article for information and should consult with professionals for personal advice.