5 Surprising Factors that Can Lower Your Car Insurance

If you’re on the hunt for lower car insurance premiums, you're not alone.

A recent study revealed that the average car insurance premium increased by nearly 7% in 2019 compared to the previous year. This upward trend continues to happen year after year.

Several factors contribute to determining your insurance rate, and you might be surprised to learn that some can actually reduce your car insurance costs.

Why Car Insurance Is So Expensive

Car insurance companies are raising premiums for various reasons. Even drivers with a clean driving record—those with no accidents or tickets—are seeing higher car insurance costs.

One significant factor contributing to the high cost is the increasing expense of car repairs. Many modern vehicles are equipped with advanced technology designed to enhance driver safety, but this technology comes at a price. Additionally, the rise in distracted driving is another reason for the high cost of car insurance. Studies indicate that we're using our phones more than ever, and this trend is a significant factor behind car crashes.

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5 Factors That Could Lower Your Car Insurance

Numerous factors influence car insurance rates, but here are five that can significantly decrease your annual premium.

1. Getting Older

Most of us don't like to think about getting older. Another year means another cake and more candles. While turning 21 was exciting, I can't say the same about turning 30. My hips ache a little more every year, and I’m totally okay with going out to dinner and being home in bed by 10 p.m. The struggle is real.

Although aging is something we can't control, age plays a significant role in determining your car insurance premium. Young adults typically face the highest car insurance rates, but those in their 30s often find that they pay less. As you get older, you gain more driving experience, making you less of a risk to insurance companies. In fact, the Insurance Institute for Highway Safety (IIHS) found that drivers aged 30 to 69 are much less likely to be involved in accidents.

1. Saying ‘I Do’

It’s true—getting married can save you anywhere from 5% to 15% on your car insurance. After I got married, my husband and I combined our car insurance policies and saved some money thanks to a multi-vehicle discount. Data also shows that married people tend to drive more responsibly and get into fewer accidents.

Make sure to inform your insurance company after tying the knot.

1. Buying a Home

Buying a home is a significant financial commitment, but paying your mortgage on time every month can improve your credit score. A good credit score is another factor that insurers consider when determining your premiums. Moreover, many insurance companies offer a discount if you bundle your homeowners insurance with your car insurance.

In addition to receiving a discount on your insurance, bundling with one provider simplifies paying monthly bills. Two bills, one provider.

1. SUV Life

Are you deciding between a coupe and an SUV? If you're in the market for a new car, know that the type of vehicle you choose will impact your insurance rate. I was surprised to learn that insuring my Toyota SUV was actually cheaper than insuring a sedan. Insurance companies examine data from drivers with your vehicle model to see if there are more accidents or claims reported. They also consider theft rates and safety ratings of the vehicle model.

1. Start Carpooling

The number of miles you drive each year affects your car insurance rate. If you've recently started carpooling or using public transportation to get to work or school, let your insurance company know right away. The less you're on the road, the lower your risk of getting into an accident.

Most Expensive States for Car Insurance

In New York, the average premium was $1,789, representing a 24% increase from 2018 to 2019. Even Virginia, traditionally one of the cheapest states for auto insurance, saw a 5% increase in premiums compared to the previous year; Virginia's average premium is $1,063.

Michigan is known as the most expensive state for car insurance. The extremely high premiums are due to several factors. Michigan is a no-fault state, meaning drivers can recover financial losses from their own insurance company, regardless of who is at fault. Additionally, the Great Lakes State offers a unique feature: unlimited lifetime medical coverage for anyone seriously injured in an auto accident.

Louisiana had an average premium of $2,298, making it the second most expensive state for insurance, followed by Florida at $2,219.

Other reasons for rising car insurance costs include an increasing number of accidents due to distracted driving, worsening traffic conditions, and higher car repair and medical expenses. Insurance companies are making larger payouts on claims, and the increased costs are passed on to customers.

Find the Best Car Insurance Deal

Several factors can affect your car insurance rates. Some factors, like location and age, are beyond our control. If you're financing or leasing your car, you're required to have certain coverage limits.

However, being aware of these factors helps ensure you have the best car insurance. If you think you're eligible for a new discount or can bundle different policies, inform your insurance company immediately. Get quotes from various insurance companies and compare the premiums and discounts they offer. Each insurer uses a different formula to determine rates.