9 Proven Ways to Slash Your Car Insurance Premium

Car insurance premiums are up more than 16% from last year, according to the Bureau of Labor Statistics. That can be really tough on your finances, especially for those with poor driving records and those who live in states with above-average premiums. And yet, going without insurance isn't usually an option.

Nearly all states require drivers to carry at least some auto insurance to drive legally. So if you hope to get behind the wheel, you'll have to try some of these 10 money-saving tips instead.

1. Shop around

Every car insurance company evaluates risk differently. That's why it's important to get quotes from three to five companies to see which offers you the best deal. Most companies enable you to get quotes online in just a few minutes. You can also save them if you want to return to them later.

If you're not sure where to begin, check out our list of the best car insurance companies. Choose a few that stand out, then give their online quote tools a try.

2. Maintain a good driving record

Few things affect your car insurance premium as much as your driving record. A good record without tickets or accidents lowers your premium because it suggests you're a responsible driver who's less likely to file a claim.

If you already have some negative marks on your record, make safe driving a priority going forward. As your tickets or accidents fade further into the past, they'll have a smaller effect on your premiums. After three to five years, they won't affect your record at all.

3. Buy a less expensive car

This might be too much hassle if you're happy with your existing vehicle. But if you're already in the market for a new car, take some time to understand how the make and model you choose will affect insurance premiums.

Compare quotes from a handful of insurance companies for a few car models you're considering. If one model is significantly cheaper, this could be the deciding factor in your purchase.

4. Bundle your policies

Bundling home insurance or renters insurance with your car insurance policy can result in substantial discounts. Plus, you get the convenience of managing your policies in one place.

Most companies allow this, but it's important to evaluate each type of insurance separately. Some companies have great auto insurance ratings but poor home insurance ratings, or vice versa.

If you're not sure which home insurance companies are worth your time, give our list of the best homeowners insurance companies a closer look.

5. Take a defensive driving course

Many insurance companies offer discounts to drivers who have taken state-approved defensive driving courses within the last few years. These courses may be done in person or possibly online, depending on state rules. They generally don't take longer than a weekend, and most have a small registration fee.

If your insurance provider offers one of these discounts, figure out which programs are eligible. Then, after completing an approved course, notify your insurer immediately so it can apply the discount.

6. Consider telematics

An increasing number of insurers offer telematics programs. These are programs you opt into that monitor your driving through a mobile app or a small device placed in your vehicle. There's usually an upfront discount associated with doing this, plus you'll have the opportunity to earn additional savings with good driving.

Of course, not everyone is comfortable having their driving monitored in this way. You'll have to decide for yourself if the potential discount is worth it.

7. Pay your premium semi-annually when possible

Many insurers offer discounts to drivers who pay their premiums every six months as opposed to monthly. This might be difficult for those without a lot of cash to spare, but if you can swing it, it could be worth it.

Don't worry about losing some of the money you've already paid if you later decide to switch insurers. The company will refund you any unused portion of your premium.

8. Raise your deductible

Higher deductibles reduce car insurance premiums, sometimes significantly. The Insurance Information Institute found that raising the deductible to $1,000 could save drivers 40% or more with some insurers.

The downside to this is you must pay higher out-of-pocket costs in the event of a claim. It's best to save for this in an emergency fund so you're prepared.

9. Consider skipping collision and comprehensive coverage on older vehicles

Collision and comprehensive coverage pay to repair your vehicle following a single-car or at-fault accident. But they can raise your insurance premium significantly. When the car is older, it's often cheaper to skip this coverage altogether and just replace the vehicle if it's damaged or totaled in a crash.

Keep in mind that if you have a lease or loan on the car, your lender will require that you maintain these protections. It's the lender's way of ensuring it gets its money back, even if the car is totaled.

These tips may not all apply to you, but give at least a few of them a try, and keep them in mind for the future, as well. Remember to shop around for new car insurance every year or two to ensure you're getting the best deal.