Save Money and Lower Your Automobile Insurance Premium

6 Proven Ways to Pay Less for Car Insurance

Experts say these techniques could shave hundreds of dollars each year off your rates

Getty Images With a little shopping around and knowing what makes your rates rise and lower, you can save big, says Michelle Megna, managing editor of CarInsurance.com: “I recommend doing this at least once a year, if not at each six-month renewal.” The savings really can be tremendous. A rate analysis by shows the average savings you get from comparing rates range between $350 and $3,000, depending on what state you live in. Each insurer plugs dozens of different data points into its . But no two companies calculate rates the same way, which is why it's worth consulting several of them. It’s particularly important to shop around when milestone events occur, whether positive or negative in nature. They include: Purchasing a car Adding or removing a driver from a policy Getting married or divorced Moving Buying a house Getting a DUI or other major violation Being in an accident Having a significant change in credit score Take the AARP Smart Driver course or near you

How to Save on Car Insurance

Review the discount menu. Don’t just rely on an insurance agent to tell you which discounts you qualify for; ask for the full menu that the company offers and review it carefully. You might find a few that aren’t so obvious. Note that in some states drivers can receive a discount on insurance if they complete a driver safety course, for example, like the . Groom your credit report. CarInsurance.com’s rate analysis found that rates for drivers with fair credit scores were, on average, 17 percent higher than rates for those with good credit scores. Rates for drivers with poor credit were even higher: 67 percent more than those for drivers with good credit. Consider giving up smoking. “Most car insurance companies don’t ask if you’re a smoker or not,” says Penny Gusner, consumer analyst at CarInsurance.com. Still, there are exceptions. A few car insurance companies may inquire about your smoking habit and charge you higher rates if you say yes. This has everything to do with their internal claims data. “It’s likely these companies have data that shows smokers are more likely to be in accidents,” Gusner says. If you’re a smoker and aren’t ready to quit, ask your insurer if your habit factors into your rates. If it does, consider shopping elsewhere. Change your deductibles. A deductible is the amount you pay for a repair before insurance coverage kicks in. Often, people buy insurance with a deductible of $500. But if you can afford it — or truly believe in your ability to avoid causing an accident — consider raising your deductible to $1,000 or higher. “You can save up to about 30 percent off your monthly premiums by hiking your deductible,” Megna says. Lower coverage for older cars. “Don’t buy if you have a car that’s more than 10 years old and worth less than $3,000,” Gusner says. State laws generally mandate only that you buy insurance that covers damage to others — liability insurance. Comprehensive and collision coverage for your own car is optional (unless the car is still financed; most finance companies require these coverages). Why pay hundreds of dollars a year for coverage that at most will pay out the full value of a car worth just a few thousand dollars?

Safety Features May Not Equal Discounts

You would think that insurers would offer discounts if you have such as on
Getty Images Automatic Braking System This should change as data starts to roll in regarding the actual value of these safety features. And a handful of insurers have begun offering discounts for certain ones, such as a lane-departure warning system, a collision-preparation system and adaptive cruise control. Ask your insurer if you might qualify for lower rates. But don’t let insurer ambivalence keep you from buying a car with driver-assistive features. “Paying a little more to have a blind-spot detection system, for example, may keep you from having an accident,” Megna says. Warren Clarke has been writing about autos for 17 years, many of them as content editor for Edmunds.com

Also of Interest

Find your next safe car with the AARP Auto Buying Program

Find a car with safety features you want and get upfront pricing information

Select Make Enter Zip Code SHOP NEW CARS Select Make Enter Zip Code SHOP USED CARS Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures

Close In the next 24 hours, you will receive an email to confirm your subscription to receive emails related to AARP volunteering. Once you confirm that subscription, you will regularly receive communications related to AARP volunteering. In the meantime, please feel free to search for ways to make a difference in your community at Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.