5 Steps to Lower Auto Insurance Rates

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 14, 2021

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Things to Remember...

  • Trading in your car for a cheaper, safer vehicle can lower your car insurance rates
  • Purchasing a longer policy and paying the amount up front to have a lower premium
  • If you are involved in a minor collision, consider paying for damages out of pocket
  • Searching for car insurance discounts is another smart step to take

Use the following six steps to help lower your rates quickly and easily. In today’s economy with everything rising, these tips can put money back in your pocket.

To save on auto insurance, you must make changes. Complaining about high costs will not lower your premium.

You need to take a personal inventory and decide what you can live without but remain logical in your choices.

Before you start downgrading, look for what matches your lifestyle and your personal needs.

A way to get first-class car insurance rates is to enter your ZIP code into the FREE toolbox right away!

The Reason for Rising Auto Insurance Rates


Car insurance costs are increasing because each year more customers file claims. However, these claims are not only the result of collisions.

In fact, the National Insurance Crime Bureau explains how fraud and other claims affect the industry, too.

The reality is everyone pays the price for these types of claims. The car insurance companies must pay and pass the costs to the consumers.

Lowering your rates is the first and most logical step to saving money. There are some factors you cannot control, but there are some that you can.

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1. Trade In Your Car


If you finance your car, take it back to the dealer. Change your current model for something less expensive. If you lease, downsize as well.

Right now, you are probably paying more in insurance because both leased and financed cars require more coverage.

You cannot break your contract, but you may be able to negotiate a new one. If you are in good standing with more than half paid, give it a try. The worst they can say is no.

However, if they want to retain your business, they may work with you. Dealerships want a good customer that provides a frequent commission.

The type of vehicle you finance or lease can directly affect your theft rate too. Check the Rocky Mountain Insurance Information Association’s detailed list of the most common stolen cars in the United States.

2. Purchase your Policy for a Year


Most auto insurance providers offer multiple ways to pay your premium, including policy lengths. Some carriers let you pay annually, monthly, or bi-monthly.

This system can be a great convenience; however, extra fees may be hidden in with the convenience.

If you opt for monthly installments, you probably will have to pay a surcharge.

There are costs associated with sending monthly bills. They pay to process and mail the statement to your home every month. You can eliminate the extra costs by paying upfront.

When renewal time comes, your insurance company may even decrease your rates again.

Most auto insurance companies apply a discount if you pay in full in addition to receiving a rate reduction. The amount can easily begin at 10 to 15 percent and increase over time.

Since you may qualify for other discounts, savings can add up fast. In addition, purchasing your policy for the year keeps the rates steady.

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3. Pay for Small Accidents Out of your Pocket

Every state has an office that regulates auto insurance rates that help you understand how the auto insurance industry determines your rates.

For example, these departments explain how too many claims have a negative impact.

When you file an accident claim, the auto insurance carrier reassesses your risk factor. You may slip down a bit because they place each insured customer into groups.

Those customers with the worst driving histories tend to file the most claims.

You can avoid the change in rank by paying for your own damages, especially if the total is less than your deductible. Remember, your coverage does not remove your responsibility.

It may not be prudent for you to report the accident. You still have to pay the deductible. If your car insurance company chooses, they can raise your rates.

If you have a minor collision that results in small damage, just go to a body shop. You are not required by law to report the accident.

As long as the officer on duty records your information, you can handle the aftermath anyway you want. Just make sure anyone involved agrees with the terms.

If you pay for your damages and they call their insurance company, there could be trouble.

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4. Celebrate your Birthday


In most circumstances, your car insurance rates should drop every year. According to the Department of Financial Services, drivers over 25 usually receive lower auto insurance rates.

The assumption is drivers between the ages of 16 and 25 have less experience behind the wheel. However, as you age, you gain more knowledge and become a lower risk.

However, some car insurance companies consider people over 50 to be riskier than those under the age of 50.

While this may be true sometimes, statistics show older drivers are more careful than younger drivers. They drive more slowly, which helps them balance their reaction times.

In addition, seniors often pair their auto insurance coverage with a provider like AARP that provides them with extra benefits.

One other piece of good news is that seniors usually drive less. Fewer miles can add up to savings due to low-mileage discounts.

5. Go Back to School


You can go to your local Motor Vehicle Commission and sign up for a few classes. Most states have them available either online or in person.

The common myth about driving courses is they are for people with poor records.

The fact is, many auto insurance providers offer huge discounts if you complete driving classes.

If you decide to take a defensive driving course, your company may reduce your rate.

Many states even have classroom training courses as refresher courses. These types of learning modules reinforce positive behaviors and help you recognize the bad ones.

Find exceptional car insurance rates when you click here and just enter your ZIP code into the FREE tool now!

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