Car insurance is a legal requirement in almost every state if you want to get behind the wheel. Nationwide, the average cost of car insurance is $1,674 per year for full coverage, which is roughly $139.50 per month. However, car insurance rates are personalized, so factors like your claims history, age and driving record can affect your premium.
While car insurance can be expensive, there are ways that you can save money. Most car insurance companies offer discounts that can lower your rate. To get car insurance discounts, you should look for car insurance companies that offer savings you qualify for, like a safe driver discount or a student away at school discount.
How can I get car insurance discounts?
Getting car insurance discounts is relatively simple. The majority of auto insurance providers have discounts for drivers who want to save money on their premiums. Not only can discounts help you save money, but some discounts can also help you reduce the likelihood of a claim.
Here are some of the common discounts that many car insurance companies offer.
If you are a licensed high school or college driver, you may qualify for special savings. Students can often get a lower car insurance premium for getting good grades in school or maintaining a minimum GPA. You can also find discounts for students who attend school a certain distance away from home and do not take their car with them.
Affiliation discounts are often provided for members of certain organizations, clubs and even employers. For example, if you are a member of a professional group or a fraternity or sorority, you might qualify for a discount depending on your insurance company. Some carriers also have special discounts for college alumni.
Good driver discounts
Good driver discounts are among the most popular discounts that car insurance companies offer. You may qualify for a claims-free discount if you have not filed a car insurance claim recently (typically between three and seven years) or have no accidents on your driving record. Many providers will also give you a discount if you drive safely and agree to allow them to track your driving habits using an app or device through a telematics program.
Bundling discounts are easy to take advantage of, especially if you have more than one insurance policy. Most insurance companies offer a bundling discount if you purchase two or more insurance policies from the same provider, like auto and home or auto and renters. Usually, you can also save money for insuring more than one vehicle on your auto policy.
Depending on how you choose to pay your car insurance premium, you may be able to get a lower rate. Many auto insurance carriers offer discounts for drivers who pay their premium upfront and in full rather than monthly installments. Additionally, you can often get an extra discount for enrolling in automatic payments and paperless policy statements.
Depending on the vehicle you drive, you could automatically qualify for certain discounts. For example, many insurance carriers will lower your rate if your car has safety features, like anti-lock brakes, an anti-theft device or a forward-collision warning system. You might also be able to save money if your vehicle is a newer model. However, you should keep in mind that sometimes car insurance premiums are already higher for new vehicles because they might be more expensive to repair or replace.
How do car insurance discounts work?
Every car insurance discount works differently. Each insurance provider offers unique discounts, and the savings potential will vary. Below are a few things to know about car insurance discounts:
- Discount amounts can be capped: If you qualify for a car insurance discount, chances are your provider will cap the amount of money you can save. For example, if you get a good student discount, you might only be able to save up to $500 on your premium. Or, if you qualify for multiple discounts, the insurance company may limit your total potential savings amount.
- Not everyone gets the maximum savings: In some cases, discounts can help you get a lower rate, but you may not get the maximum discount. For instance, if your car has an anti-theft device but no other safety features, you might only receive a small portion of a safe vehicle discount.
- Discounts can vary based on various factors: Car insurance discounts can differ depending on your car insurance company, state, vehicle, and even your age. Make sure to ask about limitations and exclusions if you are looking for providers with good discounts.
- Discounts do not guarantee the lowest rate: Even if you are able to take advantage of multiple car insurance discounts, it does not mean that you are paying the lowest possible rate. It is still important to shop around and get a few quotes from several providers for the same coverage options.
Other ways to save
Besides car insurance discounts, there are some additional ways that you can save money on your car insurance premium. Here are a few options:
- Raise your deductible: Your deductible is the out-of-pocket expense you have to pay toward a covered loss to your vehicle before your insurance coverage will kick in. Raising your deductible will lower your monthly rate, but make sure you can afford the higher out of pocket cost in the event of a loss.
- Improve your credit score: In most states, insurance companies will run a credit check when they calculate your premium. Drivers with a poor credit score may pay higher rates because they are viewed as more risky to insure.
- Purchase the right amount of coverage: Understanding how much car insurance coverage you really need can be tricky. It might be a good idea to talk with your insurance agent to see what coverage options and limits are right for you — and to ensure you aren’t paying for more insurance than you need.
- Switch providers: Another way to save money on car insurance is to switch to a different provider. Some companies will give you a discount for simply being a new customer. Switching providers can also help you avoid a big rate hike if you recently had a claim, although you should be aware that it is highly recommended you do not switch carriers until all claims have been processed with your old carrier.
Frequently asked questions
What is the best car insurance company?
The best car insurance company varies because every driver has different insurance needs. To find the right provider for you, do some research and compare providers using your personal criteria, like good customer service, low rates or specific endorsements. Then get quotes for the same coverage options and limits from your preferred providers to see which company can give you the best rate.
Which car insurance company has the cheapest rates?
There are several car insurance companies that have a reputation for offering low rates. However, the cheapest car insurance company is unique for every driver. You should compare quotes from several providers for the type and amount of coverage you need to find the cheapest provider for you. And remember that cheapest doesn’t always mean best. Make sure that you are getting the coverage you need and are doing business with a company you can trust.
How do I get a car insurance quote?
Getting car insurance starts with getting a quote. Whether you get a quote online or over the phone with an agent, you will need to share some personal information, as well as information about your vehicle, like the make, model, year and your annual mileage. You may also have to provide your social security number.