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If you’ve ever wondered how you can lower your car insurance costs, it turns out there are many ways

We all have to have it, but few of us really understand it. The ins and outs of car insurance can be confusing to even the savviest consumers. While you may never learn why insurance companies do things the way they do, you can at least take back a little control over your policy by learning how to lower your costs.

Fortunately, there are many ways to do this:

  1. Shop around and get more than one automotive insurance quote.
  2. "Company prices are very different, and it pays to shop around," says J. Robert Hunter, director of insurance at Consumer Federal of America. "You can easily wind up paying double from one company to the next."

    Comparison shopping can be one of the most helpful steps in figuring out which insurer you want to get your policy from, so make sure to look at all of your options before you decide to accept an automotive insurance quote. And on a related note…

  3. Remember to consider local and regional companies.
  4. A total of four insurance companies account for almost half of the car insurance business in the U.S.: Allstate, Geico, Progressive, and State Farm. However, regional insurers—like Erie Insurance and Auto Owners Insurance—often get high customer satisfaction ratings than the major industry players, and they may also offer lower rates.

  5. Evaluate the costs before buying the vehicle.
  6. This might seem like odd advice. However, the year, make, and model of your car can significantly affect your insurance rate. If all else is equal, cars that are new, expensive, and/or sporty will cost more to insure. However, you might find a profound discrepancy when you compare the cost of insuring similar vehicles. So, if you haven't yet made up your mind about which car you want, contact your insurance company and ask what the rate would look like for each vehicle. This could get you a windfall in savings when it's time to pay the premium.

  7. Choose a high deductible.
  8. You can save a lot on your rate if you're willing to get a high deductible.

    "If you go from a $250 to a $1,000 deductible," says Hunter, "you can save between 25 and 40 percent on your policy."

    Then you can set aside part of the money you save to pay for costs if you ever have a claim.

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  9. Got an older car? Don't bother with collision and/or comprehensive coverage.
  10. If you have comprehensive and collision coverage on an older car, you might end up paying more in insurance costs than the car is worth.

    "Take your comp and collision premium and add it up, then multiply it by 10. If your car is worth less than that, don't buy the coverage," advises Hunter.

    Don't worry about being exposed to claim costs. The average policyholder makes a claim only one time in every 11 years and reports a total loss only once in every 50 years.

  11. Keep your credit score high.
  12. More and more insurers are taking credit scores into account when they calculate rates.

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    "You credit score can be very important in determining your rate. You can wind up paying up to 50 percent more if you have a bad credit score," warns Hunter.

    There are many ways you can improve poor credit and keep good credit at its peak. One is by paying all of your bills on time, every time. Another is to check your credit report regularly to make sure there are no items in your credit history that are not yours; if there are, there is a good chance your identity has been stolen, which can cause heavy damage to your credit, and you will need to get the errors fixed.

  13. Don't drive much? Ask about low-mileage discounts.
  14. If your annual mileage is lower than that of the average driver, your insurance company might be able to give you a discount. Got a short commute? Carpool often? Whatever your situation, having low mileage can get you a lower rate with some companies, so be sure to ask about it.

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  15. Are you a veteran, engineer, or teacher? Ask about group insurance discounts.
  16. Another discount that insurance companies often provide is for policyholders who are members of certain organizations or professions. Ask your company for a list of the groups for which it provides a discount.

  17. Ask about all other available discounts.
  18. Some insurers discount rates for policyholders who have a vehicle with certain safety features, like anti-theft devices or motorized seatbelts. Others provide reduced rates to senior citizens and to students whose grades fulfill certain requirements.

    There is one thing you should keep in mind when asking about discounts, though, according to Hunter: "Some of the companies that offer the highest discounts have the highest rates, so don't get too focused on discounts. Some high-priced companies offer high discounts, but at the end of the day you're still paying more."

  19. Don't let your coverage lapse.
  20. Even short lapses in coverage can disqualify you for discounts.

    "They use lapses in coverage to increase your premium," says Hunter.

    So make sure to pay your insurance bills on time, and if you switch companies, don't quit your previous one until your new coverage goes into effect.

  21. Re-consider paying in installments.
  22. Most insurance companies charge an administration fee to policyholders who pay in installments. For this reason, try to pay your premium up front whenever possible.

    Keep in mind that this charge affects policyholders with small premiums more. If you have a large premium and think you would get a better return rate by investing your money somewhere else rather than paying up front, installment payments will probably suit you best.

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  23. Bundle your policies.
  24. Many insurance companies will give you a reduction if you buy two or more types of insurance from them. They might also give you a break for insuring more than one vehicle with them. And some reduce rates for customers who have held policies with them for a long time.

    Want to Get the Least Expensive Car Insurance Possible? We’ve Got Tips for That / Want to Get the Least Expensive Car Insurance Possible? We’ve Got Tips for That
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  25. Got a garage? Use it.
  26. Parking either off-street or in a private garage can also help when getting an automotive insurance quote. Your vehicle is less likely to be damaged if you park it off the street, where other cars might hit it, and there is even less chance of damage if you park in your garage.

  27. Make sure your policy has no unnecessary add-ons.
  28. Some insurers now offer benefits and plans meant to help drivers. Unfortunately, many such packages get added onto your regular policy automatically and with your knowledge, and many aren't worth the extra money.

    Some policies will offer to replace your car with a new one of equal value in the event you're in a wreck, but keep in mind that this is talking about the value of your car at the time of the accident, not the time when you first bought it. Add depreciation in, and you'll likely get back only a fraction of what you originally paid for the car.

  29. Go green.
  30. Many companies are offering lower premiums to policyholders who buy a "green" or environmentally-friendly vehicle. Though the cost of a new car might not be worth a lower premium, if you do need a new car, you might as well buy an energy-efficient one; this will not only help save the environment, it may also give you access to lower rates.

Editor's note: NCCC is a member of the Consumer Federation of America.

Source: Edmunds, Insurance Information Institute, NerdWallet, CheapCarInsurance

Published: Thursday, February 16, 2017
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