Need to lower your car insurance? Here’s how to do it

If you’ve ever had sticker shock when opening your car insurance bill, you’re not alone. Car insurance payments can creep up for a variety of reasons — a low credit score, hits to your driving record like accidents or moving violations, or even just an increase in property crimes in your area.

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Beyond shopping around for insurance coverage, you can also use the following strategies to lower your insurance premiums:

Improve your credit score

"Your credit history and score can play a huge role in helping insurance companies determine your rate," said Vadim Verdyan, head of advice at personal finance app Albert.

Unlike a mortgage company or lender, though, car insurers aren’t looking at your debts and balances.

"Instead, they want to know how you behave as a borrower," Verdyan said. "Your credit history will let the insurance company know how reliable you are financially. If they see a lot of missed payments or items in collections or liens on your report, then they may see you as irresponsible and give you a higher rate. On the flip side, if you’ve never missed a payment and have a flawless credit history, they’ll see you as reliable and may grant you a lower premium."

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The bottom line? Good credit can often equal a higher score than if you have poor credit or fair credit. So if yours is on the lower end (think 740 or below), consider working to build credit before applying for a new policy.

Bundle your policies

Getting multiple policies from the same insurer can typically lead to a lower premium, too. With Progressive, for example, you can get about 5% off your costs by bundling two or more policies together — for example, your home and car insurance or your car and RV insurance.

Drive safe — or get a safer car

Being a safe driver or having a safe car are great ways to reduce your risk as a policyholder and enjoy lower rates. On the driving side, going extended periods without an accident or ticket can qualify you for lower premiums, as can taking a defensive driving course.

You can also opt to use your insurer’s safe-driving app. These track your driving habits on the road and reward you with discounts for operating your vehicle safely.

Choosing a car with great safety and security features can help your case as well. These can include airbags, anti-lock brakes, and an antitheft device.

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"Such vehicles are statistically less likely to be in an accident or stolen than those that don't have these features," said William Miller, senior consultant at Allstate.

Consider usage-based insurance

Usage-based insurance can be another option. This lets you pay by the mile rather than a flat fee based on estimates.

This type of policy has become more popular since the start of the pandemic, when many Americans began working from home. Just be careful, because usage-based insurance isn’t for everyone.

"Some insurance companies will track exactly how many miles you drive per month and base your rate off that number," Verdyan said. "While this can be great for those who drive less than 10,000 miles per year, it can be costly for those who drive over that figure annually."

Other strategies

There are other strategies that can work, too, to help you save on car insurance. Choosing a higher deductible is a common option. By increasing the amount you pay out-of-pocket on a claim, you can reduce your premium costs significantly.

Another option? Pay your premium up front rather than spread it across the year. In many cases, insurers will offer car insurance discounts for customers who do this.

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Finally, consider setting up auto-payment or paperless billing, as these features often come with small discounts. Just make sure you have email notifications set up if you choose the latter. You don’t want to miss a bill and owe a late fee.

The bottom line

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.