Cheaper car insurance: Here's how to get a low rate — and choose the best policy


Owning a car isn't easy — especially once you throw in auto insurance.

Indeed, the rates you pay might not seem to follow rhyme or reason: Insurers might even favor drivers with higher incomes, according to a study published by the Consumer Federation of America.  

People with lower incomes and flawless driving records were actually charged more for their insurance than richer customers with a bad record, CFA found. 

Progressive quoted $6,404 for someone with a perfect driving record earning a "moderate income," in Queens, New York — while a high-income person also in Queens who was convicted of a DUI was quoted $3,020: less than half the first quote. 

In other words, simply driving safely won't always get you the rates you deserve.

To help you out, we've put together five helpful strategies on how to get the best deal out there, from figuratively bubble-wrapping your car to finding hidden discounts

Make your car safer to drive, safer to insure.

Adding additional features to your car in order to make it safer can lower your insurance costs. 

"Driving a safe vehicle not only protects you and your passengers; it also protects your wallet," explained. "Car insurance companies often offer discounts to drivers whose vehicles are equipped with certain safety features."

For example, you can equip your car with anti-theft devices or "pre-collision alerts and intervention," which means you can make your car frantically beep at you if you're about to hit a mailbox or another car.

Bundle car insurance with other policies.

Insurance companies want to build loyalty. They'll work to keep you on board by offering good bundle deals for a variety of insurance coverage you might be in the market for including home, life, jewelry, theft, mortgagetravel or renter's insurance.

"Several policies can bundle a lot of these different kinds of insurance," Craig Casazza, a research analyst and ValuePenguin car insurance specialist, told Mic. "In actuality, you're probably looking at a discount of around 10% to 15%."

It might be worth your while to bundle up and consolidate.

Remember: A higher deductible can mean a lower premium.

A sure way to reduce the out-of-pocket cost you pay each month for car insurance is to increase your deductible

Higher deductibles — or the amount you are expected to pay on a claim before your insurance kicks in — generally lead to a lower premium: the fee you pay each month.

For example, if you have a $1,000 comprehensive deductible on your car and the vehicle gets trashed and vandalized resulting in $5,000 in damages, you'll pay $1,000 and then the policy covers the remaining $4,000.

On the other hand, if you again have this $1,000 comprehensive deductible on your car and a branch falls on it, causing $500 in damages, you'll have to eat that cost — since it is less than your deductible.

Lower deductibles lead to better coverage, and you are assuming more financial risk when you increase your deductible, but it's always worth asking yourself: How much coverage you need? 

For starters, you'll definitely need to meet your state's minimum requirements.

Generally it is good to get covered for an amount at least equal to your total assets. But to keep your monthly expenses low, choose collision coverage with a high deductible and accept that you'll be paying for routine repairs out of pocket.

And, while lower monthly payment may lighten the load on your expenses, remember you'll need to have an emergency fund to cover the full cost of your deductible — should calamity strike.

Keep your credit score healthy.

Although it might seem just as unfair as charging higher premiums to people who make less money, insurance companies make an evaluation based on your credit score. 

In general, the better your credit, the more favorable your car insurance rates, and insurers charge higher car insurance rates to people with bad credit.  

So it's in your interest to do everything you can to keep your credit score robust.

Insurers have been challenged on this, but they have conducted research showing that those with bad credit are more likely to bring claims. When the Federal Trade Commission looked into it, they deemed the practice acceptable.

Good news, if your car is insured in California, Massachusetts or Hawaii: Those states forbid the practice.

Comparison shop for car insurance.

Companies use different formulas to arrive at their quotes. 

"What many people probably don't know is just because there are all these big companies, it doesn't mean they'll price insurance the same way," Casazza said. "You really never know who is the best in your area unless you look around."

You can get most quotes online, so you can do this from the comfort of your own bed — without ever having to speak to another human (thank you, internet). And some websites, like Cheap Quotes Auto Insurance, are designed specifically to compare quotes in your area for you, all in one place. 

Play the field a little; it could really pay off. 

Find car insurance discounts.

As you comparison shop, keep an eye out for special deals.

"Some are automatically given to you but there are a number of others a lot of people don't know about," Casazza said. "For example, if your kid is on the policy and goes to school at least 100 miles away, you can get a discount."

A good driver discount is the most common break offered by insurers. Each company has its own standards for what makes for good marks, but typically you'll need to have a clear record — without any moving violations or accidents —  for five years to qualify.

Another standard discount from many insurance companies is a lower rate for parking in a garage. Of course, what counts as a "garage" may be defined differently by insurers: Some give discounts only for a garage on your property, while others will allow for any parking garage.

Many insurers also offer breaks for good students. This comes in handy, since younger drivers are automatically charged more because of inexperience. 

Again, each company casts its own net for good students, but eligibility typically requires drivers to be 25 or younger, currently enrolled in a high school or college (although there are provisions for home-schoolers) and maintain a 3.0 grade point average. 

And may even be benefits to going Greek: "Geico also gives discounts to people in certain associations — like fraternities, sororities and other alumni associations," Casazza added.