5 Hidden Ways to Save Money on Your Car Insurance

We combed through thousands of potential risk factors to uncover five ways to help you save.

Car with Purple and Yellow Lights Shining On It

Everyone should buy car insurance, but it is not always expensive. Learn about the most obvious ways to save on car insurance, like maintaining a good driving record and paying attention to your claims history. But Ovation looked at thousands of potential risk factors and discovered some factors you may not be aware of. With this in mind, you may find a little extra money in your monthly budget.

Improve Your Credit Score

Many people don’t like insurance companies using credit scores as one of the factors that determine how you pay for auto insurance. Three states (California, Hawaii, and Massachusetts) do not consider credit scores when calculating premiums, but for the rest of us, we must follow the given rules.

The good news is that with each upgrade (for example, from average to good), you can save hundreds of dollars a year. If you start at the bottom (poor) and now here (excellent), you will save $1,408 per year.

2. Bundle

Buying insurance for your car and home can save you a lot of money, and you don’t have to be a homeowner to see the benefits. On average, whether you are renting, owning, or living in an apartment, bundling your home and car insurance can save you 8% on car insurance costs. Homeowners see the biggest benefit (their car insurance is approximately a 10% discount), but apartment owners (8%) and renters (5%) can reap benefits too.

3. Keep Yourself Covered

The math behind this problem is simple: the longer you’re insured, the lower your rate. Just six months of insurance can save about 8% of the cost.

Pro tip: After six months and then again after the 1, 3, and 5-year mark of continuous underwriting by the insurance company, your good track record may allow you to lower your rates. Don’t give up your insurance in the process, not even for a day! When there is a gap in your coverage, insurance companies will hate it.

4. Pay up front

If you can pay for the entire term of coverage upfront, it will be rewarded in the future. Payment in full, rather than fees, can save you 12%. Think of it as paying $9 less per month. Doing business digitally is also an advantage.

5. Track Your Driving With Telematics

If you can use apps or small devices inserted under the dashboard to track your driving habits, the savings might be worthwhile. It is called telematics, and your speed, mileage, and total driving time are tracked and used as part of the formula for determining insurance premiums.

Almost all states (except California, Hawaii, and Wyoming) have shown some benefits of using telematics. In some states, choosing this usage-based insurance while being a safe driver can save you more than 3%..

Nationally, Auto Insurance Drops About 3.4% on Average With Each Year Your Car Ages.

Other Ways to Save on Car Insurance

In addition to these five ways that almost everyone can take advantage of, here are some more specific savings opportunities:

  • If you have a teen driver, you know how expensive it can be to have them on your policy. But check with your insurance company regularly, because the premium drops with every year they age.
  • You should probably get married for other reasons, but if you’re looking for one to sway your decision, married people pay the least in car insurance, while single people pay the most. When you get married, you can expect your annual car insurance premiums to drop by about 6%.
  • Like your car? Then hold on to it and don’t be so quick to switch to the new hotness. Nationally, auto insurance drops about 3.4% on average with each year your car ages.
  • It may seem counterintuitive, but people with a job pay less for car insurance than the unemployed. It’s only about 1%, but there is a difference. Looking to squeeze out even more savings? Join the armed forces. Being in the military or holding an advanced degree can also lead to lower insurance rates.
  • Don’t buy a car without checking what your new insurance rates will be. In general, trucks are cheaper to insure than cars.

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