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How to save on auto insurance

Rates are going up. Here’s how to keep yours low

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Everything seems like it’s more expensive these days — and that includes auto insurance. As the Washington Post reports, some states have seen auto insurance rates increase by more than 50 percent in the past year. Rates in your area may be closer to the 17.8 percent increase calculated by the Bureau of Labor Statistics, but that’s still a significant price difference — and you may be wondering how to cover the cost.

While you’re probably going to have to adjust your household budget to cover some of the rising costs of auto insurance, there are still ways to keep rates low. I’ve been writing about personal finance for years, including how to save on auto insurance. Here is some of my expert advice on how to lower your costs while still maintaining the coverage you need to stay safe on the road.

In this article:

Compare rates — and consider your options

If you want to save money on car insurance, the first thing you need to do is compare various insurers’ rates. Most auto insurers offer free car insurance quotes, and many insurers provide useful tools that allow you to estimate what it might cost to add optional protection packages such as new car replacement coverage.

You need auto insurance to drive legally, but some people may choose fewer coverage options and/or a higher deductible in exchange for a lower monthly payment. Keep in mind that if something happens to your car, you’ll need to afford the deductible you’ve chosen — so don’t pick a deductible so high that paying it off might put you into debt.

Drive a car that costs less to insure

Some cars are more expensive to insure than others. BMWs and Teslas, for example, are practically guaranteed to raise your insurance rates, and some insurance companies refuse to insure cars that are likely to be stolen.

That’s why you should think carefully before buying a new car — especially if you’re considering an electric vehicle, which could cost more to insure than a gasoline-powered car or hybrid.

In many cases, choosing a car that costs less to insure could save you a lot of money over time. In some cases, downsizing from your current car to a less expensive used vehicle could save you even more money, both in terms of insurance rates and monthly car loan payments.

Bundle multiple insurance packages

One of the best ways to save money on insurance is by bundling your auto insurance package with another type of insurance, such as homeowners insurance. Most major insurers offer home-and-auto bundles that can help you save money, and some insurers even allow you to bundle your auto insurance with renters insurance.

Since insurance rates are going up across the board, bundling multiple packages could help you keep costs down. This is especially true if you are thinking about buying a home, since the cost of home insurance has gone up significantly in the past few years.

Build your credit

Some states allow car insurers to take your credit score into account when determining your auto insurance premium rates — so it’s a good idea to build your credit as high as possible before shopping for car insurance.

Start by checking your credit report and making sure all of the information is correct. Believe it or not, many of us will spot errors on our credit reports at some point — including me! — and some of those errors could have a negative effect on our credit scores. It’s relatively easy to contact the appropriate credit bureau and get the mistake resolved, as I learned a few years ago when I discovered that someone else’s credit history was showing up under my name.

Once you’ve got your credit report taken care of, get in the habit of making on-time payments and keeping your credit card balances as low as possible. That’ll help you build the kind of credit score you need to get the auto insurance rates you deserve.

Drive as safely as possible

There’s one last way to save money on auto insurance, and it’s probably the best advice I’ve got: Drive as safely as possible, at all times.

Many of the major insurers offer discounts for safe drivers. But even if your insurer doesn’t offer that kind of perk, it’s still a good idea to stick to the speed limit and maintain safe, defensive distances between your car and other vehicles.

You’ll also want to use lights and turn signals appropriately, and avoid hard braking whenever possible. Keep your smartphone tucked away, so you won’t be tempted to text and drive. And it goes without saying that you should never, ever drive under the influence.

If you combine savvy shopping and safe driving, you could end up saving a lot of money on car insurance — or, at least, keeping your insurance package within the range you need to balance your budget. Think of it as something you can do for your finances, your loved ones and anyone else who is likely to spend significant time as a passenger in your vehicle — not to mention all of the other drivers, passengers, cyclists and pedestrians on the road.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate,, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

Read more by Nicole Dieker

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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