Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Jul 8, 2021

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During tight economic times, Americans tend to look for ways they can reduce their household expenses. One of the things we often look at is car insurance, due to the fact that our premium payments tend to be rather significant when the bills arrive.

So how can drivers reduce auto insurance costs without compromising their own financial well-being?

You can get free auto insurance quotes with the click of a mouse. Just enter your ZIP code into our FREE search tool to get started!

There are lots of different things you can do to control the costs of your car insurance. We’ve listed a couple of the most helpful tips here, but rest assured there are lots of other possible options.

Ask your friends and family members about their car insurance policies and ways they’ve kept their premiums manageable. Also remember that even the lowest car insurance premium will go through the roof if you have a habit of driving recklessly.

Compare Car Insurance Policies

The most important thing you can do to reduce your insurance costs is to compare multiple policies on a regular basis. According to the federal government’s website, comparing auto insurance can potentially save you hundreds of dollars per year.

The fact is that insurance is an ever-changing business with various companies rising and falling from the list of “cheapest car insurance companies” on a regular basis.

How often you should compare policies depends on your level of comfort with your current rates. But seeing how insurance companies can quickly change according to their own financial situation, at least once a year is probably a good rule of thumb.

If you’re intent on knowing that you’re getting the best deal at all times, you’re probably willing to compare policies at every renewal period.

Maintain a Good Credit History

Plenty of drivers are unaware of the fact that their credit histories are included in the formula used by a car insurance company to determine rates. Credit history is important to insurance companies because it tells them how responsible you are with your car and finances.

According to the Insurance Information Institute, statistics show that drivers with good credit histories tend to file fewer claims. They also are less likely to default on their premiums.

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Ask for Discounts

Insurance companies often offer discounts to their customers as a means of retaining their business over the long term. You can get discounts for low mileage, safe driving, having good grades in school, and so on. There are even discounts for belonging to certain fraternal and community service organizations.

Just remember that insurance companies usually won’t offer you discounts out of the blue–you’ll need to ask about any you might be eligible for at the time of your policy renewal.

Consider the Age and Condition of Your Vehicle

Another way to reduce your insurance costs is to make sure you’re not paying for more coverage than you need. For example, when your vehicle was brand new, it was necessary for you to have collision and comprehensive insurance to protect the bank’s investment.

You may have even purchased gap insurance to cover the difference between the value of your car and what you owe on your loan.

You can drop gap coverage as soon as the outstanding balance of the loan is equal to, or less than, the Kelley Blue Book value of your car.

As for collision and comprehensive, the Insurance Information Institute suggests you drop the coverage if the value of your vehicle falls below a certain monetary threshold.

In other words, it’s not worth paying for collisions and comprehensive if you’re driving a 10-year-old economy car with 100,000 miles on it.

Assign Teenage Drivers Accordingly

Our last tip comes by way of your teenage and college-bound drivers. When you add your kids to your auto insurance policy, your carrier is going to assign each one to one of the vehicles in your driveway.

They benefit financially by assigning your child, as a high-risk driver, to the most expensive vehicle. Likewise, it benefits you financially to do it the other way around. Make sure when adding teenagers and college-bound drivers to your insurance policy that they are assigned to the least expensive vehicles.

In the end, reducing insurance costs is a matter of understanding how the system works and comparing multiple quotes accordingly. If you do your due diligence, there’s no reason why you can’t find a policy with which you’re happy.

Right now is the best time to begin your search for affordable auto insurance quotes by entering your ZIP code into our FREE quote tool!