How to Save Money on Auto Insurance

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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 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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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember...

  • Shopping for auto insurance can help provide you with the best rates on your policy
  • Insurance companies typically offer a variety of discounts on car insurance to help save even more money
  • Do your research to find out the best ways to lower your auto insurance rates

People are always looking to save money in their budget, whether it is a lower car payment, cheaper gas prices or finding the best car insurance rate.

It doesn’t matter if they are insuring a brand new BMW or a 15-year-old Ford Expedition, people want to know that they are not overpaying when they purchase auto insurance.

However, most people are unaware of how to truly shop for car insurance, nor are they aware of the numerous amount of discounts and options that are available to them.

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Why People Should Shop for Auto Insurance


A recent study has shown that most people are overpaying for their current car insurance, and the average that people are overpaying is at a staggering 40 percent.

That means that a person who is paying $200 a month for their current policy may be able to purchase the same coverage for just $120 a month, a savings of almost $1,000 a year.

Insurance companies will not adjust a driver’s rate for them in most cases unless they consistently ask the insurer for a policy review.

The companies need to make as much money as possible, which often means that people do not understand the huge profit margins that the policy currently has.

Consumers who compare at least three different companies before they buy get the best rates on the market.

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All Insurance Companies are Different


While car insurance companies use the same type of formulas to calculate their risk, they all choose to build their portfolio of customers differently.

Some auto insurance companies will only insure the best drivers with flawless credit, and they will offer the lowest premiums to those customers to obtain them.

Other companies get into the business to help the high-risk drivers with multiple moving violations, accidents or DUIs.

When looking for an insurance company, a consumer should first look at what customers typically choose that insurance company.

A high-risk company will usually be more expensive for a good driver because they simply can’t make money off that customer.

The same goes for a high-risk driver at a conservative company; they will receive an outrageous quote or a denial so that the customer continues to shop around for a better price.

Typical Car Insurance Discounts


There are numerous ways that a person can save on their auto insurance policy besides just choosing a company that fits their driving habits.

All insurance companies offer discounts of some kind to their drivers, such as:

  • Safe Driver Discount – The safe driver discount is one of the oldest and most popular discounts that an insurance company will offer their drivers. Simply put, if a person does not have any accidents or moving violations, then that person will qualify for a generous discount on the auto policy
  • Driver Education Discount – Drivers who have recently completed a course in driver’s education or a defensive driving class can receive a discount. While most people have had education at some time in their life, insurance companies like to see recent classes to help drivers keep their minds sharp on the rules of the road and tips on how to avoid accidents
  • Buy Online/Paperless Discount – If a person purchases their auto insurance online, they will often receive a discount. If a driver elects to receive their monthly statements via email, then they can receive a discount since it saves the company time and money to send out messages through traditional mail
  • Bundling Discount – If a person is insuring more than one vehicle, then they will typically see a discount on their policy due to the increase of business that the person is giving the insurance company. Also, a driver can get a discount if they use the same insurance company for their homeowner’s or rental insurance
  • Auto Safety Discounts – There are plenty of safety features on a vehicle that can help a driver get a lower auto insurance premium. If a vehicle has anti-lock brakes, an anti-theft system, passive restraints or if the car is a hybrid, then the driver can usually get some discounts on their policy

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Review the Current Policy

Most people have too much insurance, but if they ask their agent, the agent will always spin it so the person needs more and more insurance. In many cases, this is simply just not true.

Depending on a driver’s personal assets and the vehicle that they drive, they might not need as much insurance as they are currently paying for.

Each person is different, so they need to make sure they review the entire policy line by line and determine what is needed and what they can cut.

Millions of people pay for double coverage unknowingly. If a driver is paying for AAA, then they do not need to pay for roadside assistance and sometimes rental car services on their insurance policy.

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Raise the Deductibles

People can raise the deductibles on their policy if they are looking for more ways to save if they do not have a habit of getting into accidents.

The deductible is the amount of money a person has to pay if the accident was their fault before the insurance covers the repair.

If a driver raises their deductible from $0 to $1,000, then they will be responsible for paying $1,000 in damage repairs before the insurance covers the rest of the repair.

While this will save the driver in premiums, they may have to pay a large sum of money before they get their vehicle repaired.

Research the Vehicle


A person that drives a brand new Ford Mustang will pay considerably more money for auto insurance than a person who drives an eight-year-old Ford Focus.

If a driver is looking at saving the most on their insurance, then they should buy practical vehicles with smaller engines in them.

Typically, the cheaper a vehicle costs, the less a driver can expect to pay to insure that vehicle.

If a driver is looking at buying a new vehicle and they need to finance the purchase, they need to understand that they will have to carry comprehensive and collision insurance on that vehicle to protect the bank’s interest in the automobile.

These two options make up the largest portion of insurance, so it will be costly if they are being added to a policy.

When a person is looking to save money on auto insurance, they need to understand how to give and take. If they want a lower payment, they will either need to take more risk or get a more practical vehicle that will cost less to insure.

Whatever way a driver decides to go, they need to thoroughly review all their policy options to save the most money and be sure to shop around before they make a final decision.

The easiest way to shop is through our FREE comparison tool. Just click here to compare rates from several auto insurance companies!



Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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