When it comes to saving on car insurance, many drivers know the basics — maintain a clean driving record, bundle your policies, and shop around for quotes. But what if you’ve done all that and your rate is still higher than you can live with?
That’s a distinct possibility, given what’s been happening to car insurance rates. Prices for automotive policies rose 11.3% in 2024, following a 20.3% increase in 2023, according to the U.S. Bureau of Labor Statistics.
If your car insurance renewal shows up with a rate increase, even after you’ve followed the best-known steps to save, it’s easy to assume you’re stuck with the hike. But you’re not.
Here are some ways to cut insurance costs that are easily done, and don’t get talked about as much. One of them even gives you a safer car in the bargain. And none reduce the scope of your insurance coverage, unlike more drastic moves like eliminating the comprehensive or collision components of your policy.
Look into low-mileage discounts
The average American drives about 14,500 miles per year. If you’re driving less than that, you might qualify for a low mileage discount. More people are spending less time on the road, since driving habits have changed because of COVID-19. In 2022, more than 20 million people worked from home, resulting in about 9 million fewer commuters hitting the road during peak hours compared to 2019.
Despite the drastic shift, insurers often don’t automatically apply low mileage discounts. However, many still offer reduced rates for drivers who spend less time on the road, since less time driving generally means a lower risk of accidents.
Another way to save if you’re driving less is to consider a pay-as-you-go, usage-based insurance (UBI) plan, sometimes also known as “telematics” coverage. Most insurers offer policies based on how – and how far – you drive, which they measure through an app or device that travels in your car. Many telematics policies consider your mileage traditionally – in ranges that can deliver a discount if you fall within a low range. Others, though, charge you a daily rate for each day you use the car, along with a per-mile charge.
UBI per-mile plans are great options for remote workers, retirees or anyone who drives very little, because they provide a flexible and personalized alternative to traditional car insurance.
Maintain your car well
Regular car maintenance won’t directly reduce the cost of your car insurance. But it can help keep your premium down because a well-maintained car is less likely to fail, and cause an accident. The insurance company’s main job when setting your rate is to assess risk, and a well-maintained car is simply less risky. You’re a safer driver when your tires, brakes, windshield wipers, lights and other safety features are in good condition.
Key maintenance tasks include the following:
Something as simple as routine upkeep can make a real difference because a little preventive care shows that you’re a responsible driver – and minimizes the likelihood of having an accident.
Increase your deductible
One of the simplest ways to lower your premium is by raising your deductible — the amount you pay out of pocket before your insurance policy kicks in when you file a claim. Although a higher deductible means you’re responsible for paying more before insurance starts to cover the costs in the event of an accident, it lowers the potential payout for the insurance company, which often reduces your premium (or limits price hikes).
For example, increasing your deductible from $500 to $1,000 could bring your annual premium down by about 25% on average, depending on your insurer, driving history and other factors. If you don’t drive much or rarely file claims, the long-term savings may outweigh the risk of paying more upfront in the event of an accident.
