There are several reasons why your car insurance rates can go down over time. Here, we take a look at what you could do to get the best car insurance coverage for your needs.
As you may already know, your car insurance rates depend on several factors, such as your age, driving record, and credit history. Based on these factors, your car insurance premiums can go down or become more expensive over time. While some of the factors that affect your car insurance rates are under your control, your car insurance provider determines others.
In general, your car insurance can go down as you become older. However, there are other ways in which you could reduce your car insurance premiums. Maintaining a clean driving record for three years after you’ve filed a claim for an accident is one of them. You could also switch to a different insurance company for lower car insurance rates. Let’s take a closer look at how you could reduce your annual car insurance premiums and save money in the process.
10 methods to make your car insurance rates go down
What you’ll read about
1. Increase your deductibles.
Your deductible is the amount you must pay out of pocket before your insurance kicks in, usually between $500 and $1,000. Though you’d certainly like to spend as little as possible out of pocket in the event of an accident, increasing your deductible can lower your car insurance rate by sharing more financial risk with your insurer.
If you raise your deductible, be sure it isn’t so high that you won’t be able to afford it if bad luck strikes.
2. Boost your credit.
If you have no credit or bad credit, a boost in your credit score might significantly reduce your interest rate. Some states prohibit insurers from determining premiums based on credit scores. If your state allows it, the savings can be as much as 10% to 15%, say car insurance providers.
3. Maintain a clean driving record.
In most circumstances, accidents, tickets, and claims will raise your car insurance rate for at least a few years. Minor offenses like a parking ticket will most likely affect your insurance rate for three years. However, major violations, like a DUI, could affect your premium for five to ten years.
The longer it has been since the driving offense or claim, the better off you will be. On average, having no accidents in the last three to five years results in your car insurance rates going down by up to 26%.
4. Install anti-theft devices.
Owners who take steps to reduce the risk of their car getting stolen usually receive discounts from car insurance companies. You could install gadgets such as a car alarm that deter thieves. Or you could even equip your car with a GPS tracking device that makes it easier to recover your car if it gets stolen.
Installing these types of devices might save you anywhere from 5% to 30% on your comprehensive coverage car insurance.
5. Reduce coverage for older vehicles.
Downgrading your coverage is an easy method to save money on car insurance. Naturally, you don’t want to put yourself in jeopardy by being underinsured on an expensive vehicle. Opting for liability-only coverage if you have an older vehicle that is paid off, on the other hand, could be a wise financial choice.
To be sure, check out its actual cash value (ACV) and weigh if the risk of losing that much in a catastrophic loss is worth the monthly premium savings.
6. Get married for lower car insurance rates.
If you decide to marry, the cost of your car insurance will almost certainly decrease. Statistics are appealing to insurers. Evidence shows that married drivers are less likely to be involved in accidents. Married folks are also more likely to buckle up and follow the rules of the road.
You can also save money when you combine plans and acquire multi-car insurance. Even if you marry a non-driving spouse, your insurance premiums can reduce considerably – by roughly 10% on average.
7. Switch to a smaller car to reduce car insurance rates.
If you no longer need to drive your children to school and soccer practice, consider trading in your minivan or SUV for a smaller hatchback or sedan. Downsizing to a less expensive and more fuel-efficient vehicle can save you money in various ways, including on insurance. You don’t need as much coverage if the value of your car isn’t quite as high.
8. Become a homeowner.
Since insurers view homeowners as more stable than renters, most companies will lower your premium whether or not you insure your home with them. The size of the discount may vary, though. Generally, owning a home can reduce your car insurance rates by around 1.6%.
Bundling your home and car insurance might save you a lot of money, too! Based on our research, you could save up to 8% by combining your homeowners’ insurance with your auto insurance policy.
9. Buy a new car.
Getting rid of that fancy Mustang and replacing it with a people carrier can help your car insurance go down significantly. One of the most important aspects in determining your car insurance rate is the car you drive.
However, your claims rate has a greater impact on your premium than the car itself. Even if you have a spotless driving record, you’ll pay a higher rate if your car model is involved in more incidents. Other drivers who drive the same make and model as your car impact how an insurer assesses risk.
10. Shop around for the best car insurance rates.
The best way to reduce your car insurance rate is to shop around. Perhaps you initially bought your current car insurance when your credit was in poor shape. You don’t have to be trapped with the same high rate now that you’re older and wiser. In fact, there’s no obligation for you to stay with the same insurance provider.
