Car insurance rates have been on the rise in recent years and are expected to continue increasing in 2024. Premiums are projected to rise by 12.6% on average, with the nationwide average for full coverage reaching around $165 per month. Some states, like Nevada, may even see a staggering 28% increase. The reasons behind these hikes include inflation, rising repair and replacement costs, severe weather events, and an increase in accidents. Despite these rising rates, there are strategies you can employ to get the best price on car insurance. In this article, we will explore six effective tips for lowering your car insurance rates in 2024.
Table of Contents
- Bundle home and auto insurance
- Pay your annual premium in full
- Consider pay-per-mile car insurance
- Maintain good credit
- Take advantage of discounts
- Ask for a higher deductible
1. Bundle Home and Auto Insurance
One effective way to save on car insurance is to bundle it with your home or renters insurance. By getting both policies from the same provider, you can potentially save an average of 14% on your premiums. This translates to an annual savings of approximately $466. When considering bundling options, it’s essential to obtain quotes from different companies to compare discounts and coverage.
For example, Farmers Insurance offers a home and auto insurance bundle that can save customers an average of 20%. The company has received above-average consumer satisfaction ratings and fewer customer complaints compared to the industry average. Farmers’ auto insurance coverage is available in most states, and they offer an extensive range of discounts.
Farmers Insurance Bundle:
- Cost: Not disclosed
- Maximum coverage: Not disclosed
- App available: Yes
- Policy highlights: Covers home and property damages, personal liability, and loss of use
- Exclusions: Damage resulting from earth movement, water, nuclear hazard, failure to make repairs, war, and fungi. For a complete list, contact a Farmers Insurance agent.
2. Pay Your Annual Premium in Full
Many insurance companies charge fees for splitting your premium into monthly payments. By opting to pay your annual premium upfront, you can save as much as 12% on your car insurance costs. Utilizing a high-yield savings account can help you set aside enough money to cover the lump sum payment and even earn some interest in the process. If paying the full premium at once is not feasible, consider exploring discounts for paperless billing or enrolling in automatic payments. For example, Geico offers autopay discounts that can save you up to $36 per year.
Geico Auto Insurance:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Geico coverage and services are available in all 50 states and the District of Columbia. They offer 16 different types of discounts, including emergency roadside assistance, rental car reimbursement, and mechanical breakdown insurance.
3. Consider Pay-per-Mile Car Insurance
If you work remotely or don’t drive frequently, pay-per-mile car insurance could be a suitable option. With this type of insurance, you are charged a flat daily rate combined with a per-mile surcharge, typically a few cents per mile. While pay-per-mile programs often require a tracking device to be installed in your vehicle, they can result in significant savings for low-mileage drivers.
Nationwide’s SmartMiles program, available in 44 states, offers potential savings of around $38 per month for someone driving only 500 miles per month. The plan includes an exception for road trips, where only the first 250 miles driven in a single day count toward the total mileage.
Nationwide SmartMiles®:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Offers affordable coverage by the mile, tracked through a device plugged into your vehicle or through your vehicle’s existing system for some models. Only the first 250 miles of driving per day count towards mileage.
Another option to consider is Metromile, which provides pay-per-mile auto insurance coverage in select states. They offer discounts of up to 15% for bundling auto insurance with Lemonade home or renters insurance.
Metromile Auto Insurance:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Auto insurance coverage available in eight states, backed by Lemonade. Discounts for insuring multiple cars, bundling policies, and a discount of up to 15% for using the Ride Along program, which tracks driving for 17 days before calculating a rate.
4. Maintain Good Credit
In most states, your credit score can impact the price you pay for car insurance. While California, Hawaii, Massachusetts, and Michigan prohibit insurers from considering credit scores, it remains a significant factor in determining premiums elsewhere. Improving your credit score can help lower your car insurance rates.
Experian Boost™ is a free service that reports consistent payments that would not typically be seen by credit reporting agencies. By reporting payments such as rent, phone bills, and subscription services, you can potentially increase your credit score.
Experian Boost™:
- Cost: Free
- Average credit score increase: 13 points (results may vary)
- Credit report affected: Experian®
- Credit scoring model used: FICO® Score
5. Take Advantage of Discounts
Besides bundling and pay-per-mile options, insurance companies offer various discounts that can help lower your car insurance rates. Safe drivers, students, and members of the U.S. military may be eligible for additional savings.
State Farm, one of the largest auto insurers, offers a discount of up to 30% for good drivers who use their Drive Safe & Save mobile app to track driving habits. This app monitors factors such as braking, cornering, and phone usage. State Farm also provides discounts for safe driving and young drivers.
State Farm Auto Insurance:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Offers 13 discounts, including safe driving and young driver discounts. Terms and conditions apply.
USAA, known for its excellent customer satisfaction ratings, offers competitive insurance coverage for service members, veterans, and their families. In addition to bundling discounts, USAA provides savings for safe driving, autopay, good grades, legacy policyholders, multiple vehicles, and storing your vehicle on base.
USAA Auto Insurance:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Auto insurance available in all 50 states, Washington D.C., and some international locations. Offers low rates, coverage options for unique circumstances, and an intuitive mobile app.
If you’re a student, Geico offers a good-student discount of up to 15% on certain policies for maintaining a B average or higher. Geico is known for its nationwide availability, low rates, and inclusive coverage, even for high-risk drivers.
Geico Auto Insurance:
- Cost: Request a quote
- App available: Yes
- Policy highlights: Coverage and services available in all 50 states and the District of Columbia. Offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement, and mechanical breakdown insurance.
6. Ask for a Higher Deductible
Your deductible, the amount you must pay before your insurance coverage kicks in, is closely tied to your premium. Increasing your deductible can lead to lower premiums. For example, raising your deductible from $200 to $500 could reduce collision and comprehensive coverage costs by 15% to 30%. Opting for a deductible of $1,000 or higher can result in savings of 40% or more. However, it’s crucial to ensure you have enough funds available to cover the deductible in case of an accident.
In conclusion, car insurance rates are expected to rise in 2024, but there are several strategies you can implement to lower your premiums. Bundling home and auto insurance, paying your annual premium in full, considering pay-per-mile insurance, maintaining good credit, taking advantage of discounts, and opting for a higher deductible are all effective ways to save on car insurance costs. By exploring these options and comparing quotes from different insurance providers, you can find the best price for your coverage needs.