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How to Reduce Your Car Insurance Costs

There's nothing you can do about gas prices, but there are many things you can to reduce your car insurance costs.


  • Step 1: Request a credit report Get a free copy of your credit report from and check for errors that may be affecting your rates. Ninety-two percent of insurers consider credit history when determining premium rates.
  • Step 2: Assess your car's value Determine the value of your car through a source like the Kelley Blue Book. If you decide that your car would not be worth fixing after an accident, drop collision insurance, and just keep the minimum insurance required by law.
  • TIP: Consider trading in your car for a lower-profile vehicle. Snazzy rides cost more to insure.
  • Step 3: Pay a high deductible to save money in the long run Reduce your premium by 15 to 40 percent by requesting a high deductible, which is the amount of money you would have to pay in the event of filing an insurance claim.
  • Step 4: Seek out discounts Make sure you are getting all the discounts you're entitled to. Many insurance companies provide a lower rate to drivers over 50, those who have car-safety features or anti-theft devices, a good driving record, and low annual mileage. Students with good grades also qualify for lower premiums.
  • Step 5: See if you apply for a multi-policy or car discounts Receive a multi-vehicle discount by insuring all your family vehicles through one company, or a multi-policy discount if you have another form of insurance with the same company.
  • TIP: If you have teenage drivers, invest in a defensive driving course for them after they get their license. These programs not only teach safer driving techniques, they can also reduce your premium up to 15 percent.
  • Step 6: Reduce your annual car mileage Drive less often. If you drive fewer than 7,500 miles a year and do not use your car for business purposes, you may reduce your premium by as much as 18 percent.
  • FACT: The most expensive place to buy auto insurance is the District of Columbia, with an average cost of $1,164 in 2006.

You Will Need

  • Patience
  • Math skills
  • Credit report
  • Car's current value

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