By in Insurance, Saving | 26 comments



How to Cut Your Car Insurance Costs

Everyone is aware that if you own a car, you need insurance. Since insurance is one of those “what if” costs that you need, but don’t want to use, cutting insurance expenditures is a win win proposition.

As a personal finance expert, I look for ways to cut costs which will not impact my lifestyle. Here are some insurance basics that will lower your premiums.

If you drive an older car, (confession, El Carino’s new car is 8 years old, and the one I drive is 13 1/2) there may be coverage you can avoid. Even Liz Weston, from MSN Money suggests you may want to Dump the Insurance on Your Clunker.

What are Collision and Comprehensive Coverage?

Collision coverage pays to repair your own car in the event of an accident.

According to Edmunds, “Comprehensive coverage takes care of your car in the case of theft, fire, falling objects, explosions or other unexpected problems.”

What if your car is totalled?

The insurance company considers your car totalled when the car repair costs are greater than a predetermined percentage of the car’s value. For example if the repairs on your damaged car are 80% of the car’s value, and the “totalled threshold” is 70%, then even though your car could be repaired, it is considered totalled by the insurance company.

For example;

Car’s value: $10,000.00

Repair costs: $8,000.00

Totalled threshold: Any repair above $7,000.00

Even though the car can be repaired, the insurance company considers it totalled.

Edmunds goes on to say, ” If you’re driving a rattletrap, on the other hand, and the sum of your premium and your deductible are close to the value of your vehicle — or if they exceed it — you might want to consider doing without this coverage.”


One of the best ways to lower your premium is to raise your deductible. If you have a good sized emergency fund and are a safe driver, consider boosting your deductible to $500.00 or $1,000.00. This approach usually takes a big bite out of your premium.


  • Spend a few minutes on line every few years to compare rates.
  • Before buying a new car, find out the cost to insure!
  • Consider buying homowners and auto from the same firm to lower premiums even more.
  • Always ask what discounts are available. You may be able to do something quick and easy to lower your insurance costs.

What are your cost cutting insurance strategies?

image credit; Bogdan Suditu


  1. I have a car and I think this is very helpful to me and to other people too…


    December 19, 2011

  2. A while back, I considered raising my deductible, but it simply wasn’t worth it for me because it would take 4-5 years without an insurance claim for me to save money. In other words, the savings was only bigger than the change in deductible after 4-5 years. But, it’s always a great thing to check, just to make sure.

    20's Finances

    December 19, 2011

  3. I need to remember to include this post in the next roundup! This is an excellent tip Barb!

    Knowing what you are paying for will save you a bundle. Also while renting, when you pay via your card, it covers a part of your insurance. You can skip that coverage when buying from the rental.


    December 19, 2011

  4. It is interesting the difference in options depending on where you live. Where we live we only have one option for insurance so we can’t shop around. We can adjust our premiums though by keeping a good driving record, opting out of loss of use and raising our deductible like you said. However, old cars sometimes cost more to insure depending on how stealable or precious they are.

    Miss T @ Prairie EcoThrifter

    December 19, 2011

  5. I generally shop my insurance routinely every few years. I already increased my deductible and receive all the discounts.


    December 19, 2011

  6. Its assumed that the car doesn’t have a loan balance owed still. If you do owe the bank money on the car then they’ll generally require you to have collision coverage. Of course one would hope that we’ve paid off our 10 year old cars by now.

    I dropped collision on my previous car after it got to the point that the car was worth very little. If I recall right they wanted to charge me around $300 a year for a car worth less than $2000 at the time.


    December 19, 2011

  7. We have Collision and Comp on our 2007 Mustang, but definitely do not have it on my “new” 2003 Chevy Cavalier we just paid cash for a few months ago.

    I also heard that if your vin is engraved on your window that you can ask for a discount with your insurance company. Has anyone here ever heard or confirmed/disproved this?

    Amanda L Grossman

    December 19, 2011

  8. My Dad taught me to reduce coverage on older cars years and years ago (back in the 60’s). We carry a HIGH deductible and only liability (required by the state and smart to do anyway) insurance once they reach a certain point.

    Plus we are safe drivers, combine other types of insurance. Oh and we carry umbrella liability – to give extra coverage against potential lawsuits.

    Marie at FamilyMoneyValues

    December 19, 2011

  9. @20s-Its a good idea to check your options. It didn’t pay for me to bundle our homeowners with our auto several years ago (now it does).
    @Money-Great tip regarding rental car insurance! Thanks.
    @Miss T- We’re lucky, our old cars are fairly reasonable to iinsure.
    @Krantc- I’m sure you’re getting a good rate with your thorough investigations.
    @Jim-Wow, $300 for a car worth $2,000.00. We usually pay cash for our cars and keep them forever.


    December 19, 2011

  10. @Amanda, The VIN tip is interesting. Write back if you confirm it, never heard of that one before.
    @Marie-Your dad was a smart man. We have umbrella as well.
    @Chokichi-It’s the law to have a certain amount of auto insurance in every state in which we’ve lived. Either that or a large security bond.


    December 19, 2011

  11. An “instant quote” is simply going by the information you supply. If they run your driver’s license and find you have several traffic violations you didn’t disclose, the amount you pay will be higher than the quote, for example. So if you want a low quote, simply lie and claim you’re 50 years old, have never received so much as a speeding ticket, and drive a 10 year old car and only drive 5000 miles a year while living in rural Maine: low quote.


    December 20, 2011

  12. Judith, I don’t advise lying to get insurance :). When you file a claim, they might not pay!!!


    December 20, 2011

  13. I’d also recommend paying off your car in full, then you won’t HAVE to carry comprehension and collision -just liability. I bundled my car and renter’s insurance two years ago and am saving $250 annually. It was a great money saving move.

    Little House

    December 21, 2011

  14. @Little HOuse-Thanks for the reminder to PAY OFF YOUR CAR! You will save lots of cash in saved interest payments!


    December 21, 2011

  15. Nice tip Barb. I recently redid my insurance with Geico to save some money. I believe I got the bare bones coverage and a $1000 deductible on my car which is worth almost nothing now. Are you suggesting that I even cut out the bare bones? Don’t we have to have at least some basic coverage in case I accidentally damage another person’s vehicle? Thanks!

    Buck Inspire

    December 26, 2011

  16. This is really good information. I don’t know a whole lot about insurance so this info really helped me understand a little better. thank you!


    January 5, 2012

  17. Hello. I would like to buy an old small car, a vintage Fiat 500 from 1974. It will be my only car, since my husband and I are living in NYC now we sold our previous car last april. I would like to insure it as a regular car, without any other vehicle insured. Any tip? thank you


    July 19, 2012

  18. Hi Terry,

    I’ve used geico for years, and their agents are wonderful. Give them a call and they can quote you an approximate cost for the insurance. Good luck, I used to have an old fiat spider sports car, so fun!


    July 20, 2012

  19. @ Barb
    thank you I’ll try !


    July 23, 2012

  20. thank for this blog post…it tells me on damaged car and its repair cost… i appreciate this blog…


    December 5, 2012

  21. Is really good. I absolutely love your blog and find many of your post’s to be exactly I’m looking for.
    Would you offer guest writers to write content for you personally?
    I wouldn’t mind writing a post or elaborating on a number of the subjects you write regarding here. Again, awesome website!
    Auto Insurance

    Lake Rose

    April 25, 2013

  22. Thank you for quality information you give!!! These are very useful tips.
    This is the perfect blog for anyone who wants to know about old car.

    Desmond Morgan

    September 30, 2014

  23. Thank you Barbara for writing this useful information. Now i can also try to grow my deductible amount for my vehicle.

    Anthony D.

    December 23, 2014

    • @Anthony, The larger the deductible, the lower the premiums. Good luck to you.

      Barbara Friedberg

      December 23, 2014

  24. Barbara thanks for a great basic article. I’m an insurance guy that is forever snagging my competitions clientele just because I make my clients aware of bundling and how to save on their policies.

    To often consumers think that because a company specializes in this type of insurance or that type of insurance that they will automatically have a better rate on it. This is so not true.

    What is true is that the “bundling” you share with your clients is where the big savings are. In effect it’s volume buying. Most times when you buy more of a thing with one purchase from one person, or agency, you can get a pretty good price break. People will often over look this when it comes to insurance.

    Everybody should look for an agent that can get them bundling, and get quotes from different agencies.

    K. Turton

    July 19, 2015

  25. They love to spend their money on the most beautiful and fastest cars in the world.

    Geoffrey Fanoele

    October 8, 2018

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