Spending on auto insurance is up: Here's how drivers are saving money

In a bid to save money, 65% of drivers said they considered driving less and 10% said they thought about dropping their insurance coverage altogether, according to a recent Insurify study. (iStock)

American drivers are looking for ways to save money on the rising rate of car insurance to cope with inflation, high interest rates and rising costs, a new survey said.

The average American spent $1,705 per year on auto insurance in 2022, up 4% from 2021 and 17% from 2020, according to Insurify's 2022 auto insurance trends report.

In a bid to save money, 65% of drivers said they considered driving less and 30% of drivers are considering switching insurance providers to find more affordable premiums. Additionally, 10% of drivers said they’ve thought about dropping their insurance coverage altogether.

The insurance market is unlikely to stabilize until at least mid-2023, according to Betsy Stella, Insurify's vice president of insurance partnerships.

"Based on our comprehensive research and feedback from over 100 carriers, the general consensus is that it will be eight to twelve months (from fall 2022) before the market stabilizes," Stella said in a release. "Some think it could be several years before a soft market returns."

If you are looking to save money on your car costs, you could consider changing your auto insurance provider to get a lower monthly rate. You can visit Credible to shop around and find your personalized premium without affecting your credit score.

INFLATION DRIVING MANY AMERICANS TO CURB INSURANCE POLICIES TO SAVE MONEY, SURVEY SAYS

Falling gas prices offer little relief

Gas price volatility has also taken a toll on how much drivers are spending.

The average American driver pays $4,960 per year to operate their vehicle, the survey said. Of the primary upkeep costs — insurance, gas, taxes, and maintenance — gas has been the largest single expense in 2022, amounting to $1,726 based on August gas price data, according to Chase Gardner, a data journalist at Insurify.

Gardner said that the drop in gas prices since their June peak means "the average driver is now spending $45 less per month for fuel than they were this summer."

"That drop is helping to offset a lot of other auto-adjacent costs that are on the rise in 2022, like car insurance," Gardner said.

Through October, prices at the pump dipped, but by the first week of November they increased again, according to AAA.

If you are shopping around for new auto insurance, you can use the Credible marketplace to compare multiple providers and find your personalized rate in minutes without affecting your credit score.

MORE CONSUMERS SHOPPING FOR NEW AUTO INSURANCE TO SAVE MONEY: J.D. POWER REPORT

Tips for lowering your insurance rate

Americans looking to lower their auto costs said they've considered buying a hybrid or electric vehicle (30%), while 16% said they've mulled moving to a city with better public transportation and walkability. Here are other ways Insurify recommended that drivers could save on costs:

Compare quotes from at least four to five companies before picking a policy and reevaluate your policy every six months to make sure it still covers your needs.
Look into insurance discounts and savings. Drivers can lower car insurance premiums by up to 15%, amounting to $258 in yearly savings for the average driver, through policies that offer discounts for low-risk behaviors, according to Insurify. These behaviors can include being a member of AAA or taking a senior driving safety class.
Only pay for the coverage you want and need. Understanding what your policy covers is the first step towards determining if it covers your needs. All U.S. states, except New Hampshire, require liability coverage, according to Insurify. This covers injuries and property damage sustained by other parties when you cause an accident.

If you are struggling with rising prices and want to save money, you could consider finding a new auto insurance provider to lower your monthly premium. Visit Credible to compare multiple car insurance providers at once and choose the one with the best rate for you.

AUTO, HOMEOWNERS INSURANCE SHOPPING CURBED IN Q2, TRANSUNION SAYS

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