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15 Tactics to Lower Your Car Insurance by Thinking Like an Insurance Agent

The gist: Most people think the cost of car insurance is outside their control, but there are a number of things you can do—both easy and difficult—to dramatically lower your rates.


I find it funny when people complain about how expensive cars are.

  • “Whaaa! Gas is so expensive!”
  • “Blah blah blah, mechanic fees, blah blah blah.”
  • “Ahh! Insurance is such a ripoff!”

The latest stats from AAA say that it costs the average American $9,122 to drive every year. People are up in arms about it.

Those numbers are insane, but I can’t relate to any of the complaints. Driving cars has never been expensive for me. In fact, my car now earns me money every month.

This is because I do my own maintenance, usually bike short distances, rent my car out when I’m not using it, and do a tiny amount of work each year that allows me to get incredibly cheap insurance.

In this extensive article, you’ll learn how to  drives for cheap or free.

But beware! If you’re currently a sucker paying too much for insurance, you may find yourself inexplicably filled with rage as you read these suggestions.

15 Tactics to Lower Your Car Insurance by Thinking Like an Insurance Agent

Insurance is a sucker’s game. The only way to win is to buy as little of it as you can to avoid major losses and self-insure for the little things.

The following are 15 tricks that you can use to slash your car insurance premiums along with your need to complain about how expensive cars are.

Let’s make it a competition! How many can you put into action?

1. Shop for a better rate every year.

We’ll start with the easiest one! This one tactic alone will probably save you more on your car insurance premium than all the other tips combined if you remember to do it every year.

Insurance companies are, first and foremost, businesses. And they’re smart businesses that charge their customers as much as they’re willing to pay for a service that they will rarely, if ever, use.

They know the longer you stay with them, the more you’ll be willing to pay for the convenience of not having to shop around for another provider, so they slowly raise your premiums over time.

They are also extremely interested in stealing customers away from their competitors by offering unsustainably low rates to good drivers to get them to switch.

This is the perfect combination for massive savings. Set a reminder in your calendar once a year to request car insurance quotes from three providers, and you’ll be swimming in coins you didn’t have to send to your insurance company.

I’ve been using Gabi, an AI-powered insurance tool that negotiates with most major auto and home insurance providers automatically on your behalf to find the best rate for the coverage you want. It’s totally free to you because Gabi is paid by the insurance companies to get them new customers.

It’s brilliant. If you haven’t shopped around in awhile, average savings are $720.

Lower your insurance with Gabi.

This step is incredibly important if you’ve had a big life change in the last year that could potentially lower your insurance like getting married, buying a house, passing 3 years since your last traffic ticket, or turning 25.

Sidenote: If you’re a low-mileage driver, be sure to also get a quote from a pay-per-mile insurer like Metromile (more on this later).

2. Drive an older car.

You cannot be a cheap car insurance ninja if you drive a brand new car.

Put any group 10 economists in a room together, and they’ll disagree on pretty much everything except that buying a new car is sub-optimal financial decision.

Owning a fancy new car will land you the most expensive insurance policy to cover it.

To understand why, just think like an insurance agent would. What would you charge a friend if they asked you to pay for any damage they do to their brand new Corvette? Now, what if they were driving a nicely maintained Toyota Camry that’s a few years old?

Which car is going to cost less to fix? And which is more likely to be driven responsibly, resulting in a lower risk of accident?

3. Get moving violations off of your record.

This is a big one. Just a few violations can skyrocket your insurance premiums because violations = risk. And insurance companies hate risky clients.

If you have moving violations on your record already—and you’ve done nothing to remove them—you’re going to have to wait until they “age out.” That’s usually 3-5 years.

But if you get a new ticket, fight it! Traffic lawyers are cheap (way cheaper than a ticket + the increased insurance rates) and can often negotiate to have your ticket modified to a non-moving violation, which won’t affect your insurance.

That’s exactly what I did recently when I received a bogus ticket in a rural county in Washington while on vacation. I used Off The Record—a ticket fighting service—and they handled everything for one fee that was less than the cost of the fine I was facing.

It was really simple and stress free. I didn’t even have to go to a hearing. I wouldn’t have been able to since the ticket was issued far from home.

Even if you can’t get your ticket dropped or modified, many states offered what’s called a deferral. It’s like being forgiven for driving like a dummy. As long as you don’t get another ticket in a certain time frame, the one you just got will be “deferred” and not show up on your driving record.

If there’s a ticket on your record that shouldn’t be there, fight that, too!

When I was younger, one of my hometown’s finest decided that slowing down to 3 mph at the stop sign miles out in the country in the middle of the night with perfect visibility and no cars to be seen was simply not good enough. (No, I’m not bitter.)

He informed me of his disapproval with a $200 ticket.

Since it was my first infraction, I paid the fine and the judge let me take a safe-driving class in exchange for striking the ticket from my record. I held up my end of the bargain, but when I went to apply for insurance again a year later and received an absurdly expensive quote, I learned the local court didn’t hold up theirs!

A quick phone call to the city sorted it out and, a month later, I re-applied and received a quote that was significantly less.

For any fresh tickets, though, attack them as quickly as possible. Off The Record worked really well for me. Give them a shot if you find yourself in the situation I did.

4. Never purchase comprehensive insurance.

There are several types of car insurance: Liability, collision, and comprehensive.

  • Liability covers the damage you do to other cars, property and people.
  • Collision covers the damage you do to your own car and personal property if you cause a wreck.
  • Comprehensive covers everything else like theft or vandalism.

The only thing you need to know to drastically lower your car insurance cost is this: NEVER buy collision or comprehensive insurance.

Comprehensive insurance is for suckers who can’t actually afford their cars. Since you’re smart and definitely not a sucker, you bought a nice, reliable ride with a small portion of your available cash, and now you’re free to purchase whatever insurance policy you like.

Right?

If not, you don’t have to admit it, but sell that money-shredder of a car immediately and buy a different one with cash. As you do it, remind yourself that the only thing smarter and sexier than an expensive car is a ballooning bank account.

Then go get yourself a simple, no-frills liability only car insurance policy—one that’s a fraction of the cost of comprehensive, you handsome and intelligent insurance shopper, you. You can use Gabi to make it painless, which is the tool I use each year to make sure I’m getting the best rates.

You’ll sleep well at night knowing that if you accidentally drive your car off of a cliff, you’ll just buy another one with all the money you’ve saved.

5. Choose lower coverage levels and select the highest deductible possible.

Repeat after me: “I cannot beat the insurance company. The only way to win is to pay as little money as possible for the coverage I need.”

Good job. You now understand the most basic rule of insurance. Never forget it.

So many people are reamed by their insurance company every year because they don’t understand simple math. You must vow to never allow yourself to be one of them!

When you purchase your auto policy, buy the minimum coverage necessary to protect your assets, and check that your own health insurance covers auto accidents (usually it will).

“But what if I hurt somebody else?” you ask.

Great question. The answer is:

Good liability insurance coverage will cover the most likely injuries to another person.

“But what if the worst possible thing ever happens, and I seriously injure a million people!?”

Fear not. Could this happen? Yes. Will it? Probably not if you’re an even remotely responsible and defensive driver.

Properly playing the insurance game means planning for the most likely scenarios and buying the insurance you need only to protect against catastrophic loss. Statistics are your friend! To lower you risk even further, stop driving to places you can walk or bike to, lazy bones!

6. Purchase a home (and bundle your insurance).

This is another one of those things that’s a good indicator of someone becoming a boring, responsible adult, and insurance companies love boring, responsible adults because they make fantastic customers.

If you’re on the fence about buying a home, here’s my argument for that.

In general, owning your home is a sign of financial success. Financial success traditionally requires a high degree of responsibility. And responsible people don’t crash their cars as often as irresponsible people.

The numbers (usually) don’t lie!

And once you’ve bought your home, try to keep your home and car insurance with the same company. You’ll get a discount for bundling multiple products.

If you use Gabi, like I’ve been mentioning, you’ll get the best results by letting them search for the lowest bundled rates.

7. Drive less often & lower your annual mileage.

In addition to the car you drive and the insurance you purchase, there are some simple things you can do that make insurance agents actually want to throw cash at you like you’re their favorite stripper. Driving less is one of these things.

An insurance underwriter is concerned with just one question: how likely are you to cause a wreck and cost them a lot of money?

One of the biggest factors they’re going to consider is how much you actually drive. When you’re not in your car, you’re not a risk to your insurance company even if you’re the worst driver in the world.

My insurance policy is based on the lowest tier of miles traveled each year—less than 5,000—and I save a boatload of money for it. This is because your odds of being in a wreck increase, obviously, as you drive more miles.

  • Get a job closer to home or move closer to work.
  • Stop driving to the convenience store down the street.
  • Go for a walk instead of a drive.

Anything you can do to lower the miles you travel each year will lower your auto insurance risk and, therefore, your premium.

If you drive less than about 10,000 miles per year, you can save a lot by switching to a pay-per-mile insurance program like MetroMile. Rather than paying an all-inclusive rate like you would with a typical car insurance company, you pay a low “daily rate” and a few cents per mile actually driven.

It’s a fantastically cheap alternative if you keep your mileage low. Unfortunately, it’s not available nationwide yet.

See if MetroMile serves your area and, if so, get a free quote.

8. Improve your credit score.

Did you know an insurance company can predict how likely it is you’ll cause a traffic accident by looking at your credit score? They can! If that sounds ridiculous (many people complain about this), the correlation actually makes sense:

People who are less likely to cause accidents tend to be more careful drivers. And people who have higher credit scores tend to be more careful with their money. “Careful” is the operative word.

I don’t know how much you can save (or be dinged) based on your credit score, but the prescription for a lower insurance bill is clear: improve your credit and reapply.

Not sure how to improve your credit score? Try becoming a more careful driver! That caution just might spill over into your financial life.

9. Own your car! (Like, actually own it)

If you lease your car, you’re already paying too much for insurance (and everything else associated with driving).

Why? Because when you don’t own your car, you don’t get to set the rules about what type of insurance you’ll buy. The person or company who owns it does. And businesses that allow other people to drive their cars are notoriously conservative.

Wouldn’t you be? Would you let your friend borrow your brand new car for 5 years without getting an insurance policy that would replace it if they crashed?

If you lease your car, no leasing agent is going to let you drive their car around without a guarantee that they won’t have to pay anything to replace it. You’ll be required to have comprehensive insurance which is, in almost every instance, a giant waste of money.

If you’re thinking, “Aha, I’m so smart! I skipped the lease and got a loan to buy my car!” you’ve still been duped. If you have a loan, you still don’t own your ride! The bank owns your car, and they’ll be setting the rules for your insurance policy until you pay them back every last dollar you owe on it (which is, of course, more than the car was ever worth).

If you want to set the rules for what type of insurance policy you buy for your car and get the lowest rate, buy it outright. If you can’t afford to buy your car with cash, you can’t afford your car! Keep toning that sexy body on your bike for now.

10. Take a defensive driving class.

Taking a defensive driving course triggers one of the most lucrative discounts you can get for your insurance premium.

Why? Because the most important question every single insurance company asks when they give you a policy is, “Will this person cause an accident and cost us a lot of money?”

By taking a defensive driving class, you prove not only that you’re willing to learn how to be a safe driver, but that you’re probably a pretty safe driver already, since unsafe drivers are not the type who think about taking defensive driving classes.

11. Pre-pay your policy as much as possible.

Everyone knows insurance agents love money and statistics just a bit more than the rest of us. And that’s why they know that money today is worth more than money in the future, and they’re willing to give you a reasonable discount to get their hands on it now.

You’ll always get the best insurance rate by paying as much of your premium up front as possible. Six months is usually the maximum.

Smart Driver Rule: If you cannot afford to pay your 6-month premium at once, you cannot afford your car. Sell it and start over!

If you’re able to pay your 6-month premium all at once, it probably says that you manage your money well, which says that you probably have better credit, which says that you’re a lower accident risk, which says that you’re worth the investment of a lower premium! (Yes, I know it doesn’t actually work this way).

The best way to make that upfront payment is, of course, to make it as small as possible. I use a service called Gabi every year to make sure I’m getting the lowest rates.

12. Request every discount possible.

Every insurance company has a laundry list of obscure discounts you may qualify for but they don’t do a lot of advertising for. Here are some common ones you can ask your agent about:

  • Occupational Discount: Some professions like policeman, firefighter, doctor, dentist, nurse, and teachers qualify for special discounts because they tend to drive less and/or take fewer risks. Savings tip: If your occupation could technically fit a number of different fields, try filling out your application with each one to see which produces the lowest premium.
  • Affiliation Discounts: Were you ever in a fraternity or sorority? Member of your state’s bar or any other professional group? There could be a discount for you. Ask for it!
  • Paperless Statement Discount: It costs money to stuff and mail envelopes, and some insurance companies will give you a discount if you opt for paperless statements.
  • Armed Forces Discount: If you are or ever have been in the military, many insurance companies will offer you a discount. I have no idea if this is based on actuarial tables or if it’s just gratitude.
  • Garage Parking Discount: If you park your car in a garage instead of a driveway or on the street, it’s at a lower risk of theft/vandalism, and you can get a discount accordingly. Only applies to suckers with comprehensive insurance.
  • Anti-Theft Discount: Ask your provider if you can get a discount for having an anti-theft system installed in your car. Only applies to suckers with comprehensive insurance.
  • Good Student Discount: If you’re in school and you have good grades, you’re probably a lower insurance risk; most providers will give you a better deal if this is the case.
  • Early Switch Discount: As a marketing tool, some insurance companies offer a discount if you switch to their service at least 2 weeks before your current policy expires.

Not sure what discounts your insurance company offers? It’s easy to find out. Just call them up and ask, “Hey, what are all the possible discounts I could qualify for?” They’re happy to tell you.

13. Get married!

Insurance companies love married couples because married people are more likely to settle down and drive like boring people.

Also, married couples tend to have kids. Putting a kid in your car is a better predictor of good driving habits than having your insurance agent sitting in the back seat with a clipboard.

Domestic partnerships can also qualify if that’s your situation.

Now, I wouldn’t advise this tactic solely for the insurance savings. But, if you need another little nudge to make things official… here you go!

14. Stop driving until you’re at least 25.

If you’re under 25, you’re a stupid driver and car insurance companies hate you. Whoa, there! Don’t get so angry! I’m not talking about you! I’m just saying, statistically speaking, you and all your friends suck at driving.

1/3 of all traffic related deaths each year are under 25-years-old. That is way out of proportion to the general population, so insurance companies are betting on you killing yourself or someone else with a car. And traffic deaths aren’t just tragic, they’re crazy expensive!

Luckily, the statistics start to even out at 25, so if you can make it that long, you’ll enjoy lower insurance rates from every insurance company.

15. Move to a rural area.

There are lots of reasons to live outside the city, and one pretty good one is that you’re less likely to smash your car into someone else’s.

Remember: Your insurance rate is based almost entirely on population statistics. And where there are fewer people driving around, there are fewer potential collisions. This translates to lower insurance rates for people living in rural areas.

I’ve mentioned Gabi a few times now. They can also help find the lowest home insurance if you own your place.

Now get out there and get that cheap car insurance, you genius!