3 Car Insurance Hacks: Secrets to Lowering Your Rates

Owning a car is hardly an inexpensive prospect. AAA says it costs an average of $12,182 a year to own a vehicle, or more than $1,000 a month. And when you account for costs like auto loan payments, vehicle maintenance, and car insurance, it's easy to see why.

These costs, however, aren't necessarily set in stone. It may be possible to refinance an auto loan if you think you can snag a lower rate. And similarly, you might be able to lower the cost of your auto insurance.

Now, you may be aware that maintaining a safe driving record is one way to keep your car insurance costs down. So is taking a defensive driving course. But here are a few less obvious moves that could result in some nice savings on auto insurance.

1. Boost your credit score

You may know that when you're looking to borrow money, having a great credit score is crucial. That's because a higher credit score sends the message that you're a reliable borrower. And you'll generally be rewarded for that with more competitive interest rates on loans. 

But you may be surprised to learn that having a higher credit score could result in lower rates on your auto insurance. So it pays to work on boosting your score and then seeing what discount it results in.

One step you can take to boost your credit score is to pay all incoming bills on time. If you can pay off some credit card debt, that could help a lot, too.

Finally, make a point to get a copy of your credit report and check it for errors. Credit reports are free to consumers every week. Correcting a mistake that paints you in a less favorable light could result in a fairly quick credit score increase. 

2. Sign up for a pay-per-mile plan

A typical auto insurance policy has you paying a single rate for the year, regardless of how much mileage you put on your vehicle. But some auto insurers offer a pay-per-mile program. If you drive infrequently, one of these plans could make financial sense.

Pay-per-mile insurance works the way it sounds. You'll usually have an approved device you'll place in your car (in some cases, it can potentially be built in) that tracks your mileage. From there, you'll pay your insurer based on how much you actually drive.

Now, you should know that pay-per-mile insurance also charges a base rate. But that base rate is likely to be a lot lower than the standard premium rate you might otherwise face. So if you don't put a lot of miles on your vehicle, one of these plans could save you a lot.

3. Pay your premium all at once

Some people pay their auto insurance monthly. But if you can pay your annual premium in one fell swoop, your insurer might give you a small discount, so it makes sense to call and ask.

That said, if you're going to take a monthly expense and convert it to an annual expense, you'll need to make sure you're setting funds aside for it month after month. You don't want to end up in a situation where your annual premium is due for your auto insurance but you don't have the money. One good bet is to take the cost of your annual premium, divide it by 12, and send 1/12 of that total into your savings every month via an automatic transfer.

Lowering the cost of your auto insurance could make vehicle ownership less expensive for you. Use these hacks to shave money off your costs so you're less financially stressed.