KEY LEARNING POINTS
- One of the ways to lower car insurance is through a discounted bulk rate for insuring multiple vehicles and drivers at once.
- If you have other insurance policies with the same carrier, lower auto insurance rates may also be available.
- Keeping a safe driving record is key to getting lower car insurance rates.
How much does car insurance cost?
The cost of car insurance is different for every driver depending on the state they live in, their choice of insurance company and the type of coverage they have. But when you’re trying to save money on car insurance, it helps to know what the average driver pays.
On average, the average person spent $1,190 on car insurance in 2018, based on the latest figures from the National Association of Insurance Commissioners (NAIC)1. Auto insurance premiums rose 30% from 2014 to 2018, according to NAIC data, despite the fact that the number of insured vehicles only increased by 7%1.
Data from AAA puts the average cost of auto insurance for new vehicles slightly higher in 2020, at $1,202 per year2. The numbers are pretty close, suggesting that if you’re budgeting for a new car purchase, you may need to shell out $100 or so a month for car insurance.
While some things that affect car insurance rates, such as your driving history, are within your control, costs can also be affected by things like government regulations and accident rates.
How to save on car insurance costs
There are a number of strategies you can use to save on car insurance. Once you know how much car insurance will cost you, you can employ some or all of these tactics.
1. Take advantage of multi-car discounts
If you get a quote from a car insurance company to insure one vehicle, you may get a higher quote per vehicle than if you inquire about insuring multiple drivers or vehicles with that company. Insurance companies offer what amounts to a bulk rate because they want your business. Under some circumstances they are willing to give you a deal if it means you get more of it.
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Ask your insurance agent if you qualify. In general, several drivers must live in the same home and be related by blood or marriage. Two unrelated persons may also be able to get a discount; however, they must usually jointly own the vehicle.
If one of your drivers is a teenager, you can expect to pay more to insure them. However, if your child’s grades are a B average or above or if they are in the top 20% of the class, you may be able to get a good student discount on coverage, which generally lasts until your child turns 25. can range from as little as 1% to as much as 39%, so be sure to prove to your insurance agent that your teen is a good student.
Incidentally, some companies may also give a car insurance discount if you maintain other policies with the company, such as homeowners insurance. For example, Allstate offers 10% off auto insurance and 25% off homeowners insurance when you bundle them, so check to see if such discounts are available and applicable.
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