How to Save Hundreds on Car Insurance in 2024

The average car insurance premium in 2023 is $3,017 per year, and that number is likely to rise even higher in 2024 due to inflation. And for young drivers or those with an accident history, even a small rise in premiums can put a huge strain on their budgets.

Some drivers resort to forgoing insurance if they can't afford a policy, but that's a bad idea for many reasons, not least of which is that it's illegal to drive while uninsured. Here are three better options for keeping auto insurance costs as low as possible in 2024.

1. Shop around

This is probably the most cliche advice ever when it comes to shopping for any type of insurance, but there's a really good reason for it. Every insurance company considers different factors when deciding whether to work with a driver and how much to charge them. A lot of these factors are the same -- the driver's history, age, location, and vehicle make and model, to name a few -- but different insurers weigh these factors differently.

One company might heavily penalize drivers with prior accidents, while another might not. Another might charge teen drivers astronomical rates, but offer really affordable rates to seniors. Insurers aren't exactly forthcoming with how they calculate premium costs, so the only way to know what a company will charge a particular driver is to get quotes.

Most auto insurers enable drivers to get quotes online. Having the details of any prior accidents or traffic violations, the vehicle's VIN, and driver's license numbers at hand will speed up the process considerably.

Once presented with a quote, drivers can play around with coverage options to see what best fits their budget. They can also save quotes to return to later if they'd like to compare offers side by side from different companies.

2. Pay attention to discounts

Car insurance discounts can significantly reduce how much a driver pays for a policy, though it's not always true that the company with the most discounts offers the lowest rate. Again, this is why it's important to get quotes from multiple insurers to see what each has to offer.

Most of the time, the online quote tool will assess your responses and automatically apply discounts you qualify for. But there are some that drivers may have to opt into. For example, many insurers now give discounts to drivers who enroll in a monitoring program. They can't force drivers to do this. But those who are comfortable with this could shave a significant amount off their premiums.

Those who fall into specific groups, like veterans or drivers of electric vehicles, may want to look specifically for auto insurers that offer savings to these groups. That's not a guarantee that they'll offer the best rates, but they might.

3. Choose a higher deductible

There's an inverse relationship between insurance premiums and deductibles. Choose a low deductible and premiums are higher. Go with a higher deductible and premiums are lower. This is a simple way for drivers to reduce their monthly costs, but it's important to understand the tradeoffs.

A higher deductible means greater out-of-pocket costs in the event of an accident. This could be problematic for those who are tight on cash. Before going this route, it's important to have a plan for how to cover the deductible.

One way to do this is for the driver to take any money they're saving on auto insurance premiums and put it into an emergency fund each month until they've saved enough to cover the deductible. Or drivers could try saving year-end bonuses, tax refunds, or other windfalls.

The above steps don't take a lot of time, but they can make a significant difference to what a driver pays for car insurance annually. And if the best deal is still higher than what a driver hoped to pay, go ahead and repeat the process in a few months to see what else is out there.