Some things that affect the price of auto insurance.you can’t do anything about—like your age—and some you might not want to change, like where you live. But by comparing rates, you may be able to figure out how to get cheaper car insurance.
Here are some other considerations.
How to Get Cheaper Car Insurance
Wondering how to lower car insurance costs?
There’s no downside to looking for a lower premium than you’re currently paying on car insurance. If you find out you have a better deal than you thought, you can stick with the company, and premium, you have.
But if you’ve had the same coverage and carrier for years (or even a year), you may benefit from making some changes.
Discover real-time vehicle values with Auto Tracker.¹
Now you can instantly monitor vehicle prices in this unprecedented market—to help you make smart money moves.
Shop Around and Get Some Quotes
Rates for the exact same coverage can vary from one insurance company to the next—and from one customer to another. So using an online comparison site to shop for a policy and premium based on your specific needs (or your family’s needs) can be a good way to start your search for savings.
The Insurance Information Institute recommends getting at least three price quotes when you’re shopping for a better rate.
You’ll likely see plenty of company names you know when you use a comparison site, but you also may run into some that are less familiar. If you’re intrigued by a company’s rates and coverage options but if you want more information, you can read consumer reviews online.
You also can check out a company’s financial health with a rating service like AM Best or Standard & Poor’s. And you can contact your state insurance department to ask about any complaints related to a particular insurer.
Once you’ve done some research, you also may want to contact your current insurance provider to see what savings options it might offer to keep you as a customer.
Recommended: How Much Auto Insurance Do I Really Need?
Look for Discounts
When you’re shopping, it’s smart not to overlook the opportunity to save money on your auto insurance premiums with discounts.
Many insurers offer price breaks based on things that make a driver statistically safer to insure—like a good driving record or a vehicle with extra safety or anti-theft features. Drivers of all ages may qualify for a discount after taking a defensive driving course. And carpoolers and those who work from home may benefit from low-mileage discounts.
You also might be able to get discounts for behaviors that cut costs for the insurer—by going paperless, for example, using automated payments, or paying premiums annually instead of two or more times a year.
All discounts are not created equal: Some provide a larger price cut than others, so it can help to look at the bottom line. The amount you can save also may vary by company and location, and the options can change from year to year.
Which is another reason it can be a good idea to check car insurance rates regularly.
Another way to get a price break can be to “bundle” your insurance coverage with one insurer. That might mean purchasing your homeowners (or renters) insurance and car insurance from one company, or using one company for both your car and boat insurance.
You also might get a reduction if you are insuring more than one vehicle.
Bundling can result in a substantial discount. Still, you may wish to get separate policy quotes as well, just to be sure you’re really saving money and getting exactly what you want.
Consider a Higher Deductible
Choosing a higher deductible can significantly reduce your premium. (Your deductible is the amount you’ll pay out of pocket before your insurance company pays the rest of a claim.)
According to the Insurance Information Institute, increasing your deductible from $200 to $500 could cut the cost of collision and comprehensive coverage by 15% to 30%. And going even higher, to $1,000, could save you 40% or more, the insurance industry association says.
Of course, there’s a catch: If you have an accident, you may end up having to fork over a larger chunk of money than you’re comfortable with before the insurance company kicks in its share on a claim.
Before you go for the savings, you may want to be sure you can afford an unexpected repair bill.
Review Coverage Needs
If you have a car that’s getting older, it might be time to reevaluate the coverage you’re carrying on it.
You may decide to drop your comprehensive coverage (the portion that helps pay to replace or repair your vehicle if it’s stolen or damaged in an incident that’s not a collision) or collision coverage, for example, or lower the amount of those coverages.
Keep in mind, though, that if you do give up this coverage, you may have to pay to repair or replace your vehicle if it’s damaged. So it’s important to balance today’s savings with tomorrow’s what-ifs.
As you make your decisions, you’ll have to keep any coverage that’s required by the laws in your state and by your lender (if you’re still paying for the car) or a lease agreement.
Before Buying a Car, Consider Insurance Costs
Some cars cost more to insure than others, so before you save up for a car, you may want to check out how buying a car (used or new) might affect your premiums.
Insurance companies base their prices, in part, on a car’s sticker price, its safety record, what it might cost to repair it, its engine size, and the chance that the car will be stolen.
You may have heard that color is also a factor—and that a red car can cost more to insure—but according to the Insurance Information Institute, that is a myth. You can, however, expect a powerful sports car to kick up your costs.
Improve Your Driving Record, If Needed
This one’s pretty basic: A person with a bad driving history—with multiple accidents, insurance claims, and/or traffic violations—can expect to pay more for car insurance than someone with a good record.
If you aren’t sure where you stand, or you think there might be an error on your record, you can get a copy of your motor vehicle report through your state’s department of motor vehicles or the agency that handles driver’s licenses.
Improve Your Credit, If Necessary
You probably already knew that maintaining a good credit record can save you money in many ways—and you can include lower car insurance premiums on that list.
Just how much a solid credit score can save you may depend on the insurance company and the state you live in. But you can expect your credit data to play some part in your provider’s underwriting decisions.
The good news is, there are steps you can take to build credit fast, including disputing any errors on your credit reports and paying your bills on time.
Recommended: Pros & Cons of Car Refinancing
Ask About Group Insurance
Some companies and other organizations offer group plans with lower rates for their employees or members. Your human resources department can fill you in on what’s available through your employer.
If you’re a member of a large organization, you may receive insurance offers in the mail or by email, or you can inquire with the main office.
Wondering how to lower your car insurance? A good starting point on the road to deciding how to get cheaper car insurance can be to compare your current policy to offers from other insurance companies.
Try an apples-to-apples comparison of your existing policy to others to find the best deal, and if you like your quote, buy the policy right then and there.
¹SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. Vehicle Identification Number is confirmed by LexisNexis and car values are provided by J.D. Power. Auto Tracker is provided on an “as-is, as-available” basis with all faults and defects, with no warranty, express or implied. The values shown on this page are a rough estimate based on your car’s year, make, and model, but don’t take into account things such as your mileage, accident history, or car condition.
Insurance not available in all states.
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SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.