8 Ways to Save Money on Car Insurance

When I was 19 years old, I sped through the empty roadways of rural Wisconsin—with Walk the Moon's "Shut Up and Dance" blaring on the radio—and got pulled over. That was the day I got my first speeding ticket. It came with a $250 fine, which ended up being the same amount I paid a lawyer to try to fight it. And if that wasn't enough, my car insurance premiums went up by almost $100 a month—for two years. I learned my lesson. Quickly.

Cars are more expensive these days and that monthly car insurance bill never seems to get any smaller or less complicated. But there are ways to save money on your car insurance premium, so here are some avenues (pun intended) to consider.

01 of 08

Update how many miles you drive.

Are you working from home these days, or have you transitioned to a job that requires less driving? According to the Federal Highway Administration, the average American drives about 13,000 miles per year, and car insurance companies offer discounts on premiums for people who drive less than average. Give your insurance agent a call, let them know your current driving habits, and reap the rewards.

02 of 08

Bundle your policies.

Despite incessant commercials insisting that bundling saves money, it's often a forgotten factor. If you have multiple policies or are underinsured, consider combining or adding policies to save money. Renters, homeowners, and umbrella insurance coverage (among others) are eligible for bundling discounts. In fact, adding a renter's policy can often save you more money than the cost of the renter's policy, effectively making you money just by adding it.

03 of 08

Improve your credit score.

In most states, a bad credit score, significant debt, and poor payment history can significantly impact your insurance premiums, but car insurance companies don't weigh credit the same way banks and lenders do. Outstanding debts and payment history carry the highest weight for insurance purposes. Consumer Reports found that a low "insurance" credit score can increase your premium from $500 to $2000 or more per year depending on your state.

04 of 08

Use an agency to shop rates.

If you're insured by the same company that insured your parents, you may have never considered that better—and sometimes cheaper—options are out there. Shopping for insurance is a hassle, so most of us simply renew when our insurance sends the renewal notice, not thinking twice.

Agencies such as the Jerry app, which uses AI to find the best rates, or more traditional agencies such as Auto Insurance Specialists make looking for the best rates painless. When insuring your car through an agency, they find you the best rates, and then at every renewal, they shop your rates again to ensure you're paying the lowest and best rates.

05 of 08

Earn good driving and good grades discounts.

Driving a few miles over the speed limit, running through that yellow, and forgetting to use your turn signal might seem like small infractions, but they can have a major impact on your rates. What's worse, moving violations significantly impact your car insurance premiums for at least two years after the ticket was issued.

Besides, speeding doesn't get you where you're going as fast as you might think (or want). According to AAA, "You have to drive at least 100 miles at 75 mph instead of 70 mph to save just 5 minutes." Plus, you're wearing down your brakes from sudden stops and risk paying fines and increased premiums. Slowing down and following the rules of the road can save you big money.

06 of 08

Consider increasing your deductible or reducing coverage.

When money gets tight, many of us opt to increase our deductible or reduce our coverage without understanding what we're giving up. While cutting coverage and increasing your deductible are two ways to save money, but they may not be best for your situation.

If you have an old clunker with full-coverage insurance, switching to a liability-only plan might make sense, but it might not make sense for a car that you can't afford to replace if it gets totaled. If you have a padded savings account, increasing your deductible to $1000 or more is an economical choice—but doing the same when you're living paycheck-to-paycheck might land you in a pickle when it's time to pay up.

07 of 08

Take a defensive driving class.

In some states, insurance companies offer discounts to drivers that take certain defensive driving courses. While these discounts are sometimes available only to teenage or senior drivers, taking such a class is beneficial for everyone, even if your insurance company doesn't offer any savings for it. Driving carefully and avoiding collisions and tickets can save you money in the long run.

08 of 08

Get a safer car and park in a garage.

While parking in a garage can make your car less susceptible to theft and other damage, it can—depending on your insurance carrier—also earn you deductions on your insurance premiums. When buying a new (or a new-to-you) car, consider that safety features such as automatic braking, reverse cameras, and blind-spot monitoring may also make you eligible for savings.

Car insurance is a necessary evil, but savings are out there. And driving better is the biggest saving of all. Slow down, follow the rules of the road, and you'll save money—and maybe you'll even save a life while you're at it.

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