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How can I lower my auto insurance premiums?

More and more, it's harder to keep up with the rising cost of auto insurance. According to one estimate, the average cost of auto insurance in 2017 for lower-risk drivers with good driving records was $1,178.1

Although the criteria vary from state to state, insurance companies may base auto insurance rates on a variety of factors, such as: your driving record, credit history, age, and gender; type of vehicle; number of miles driven; where you live/park your car; and number of claims filed. While the types and level of auto insurance coverage that you have (over and above your state's required minimum liability amounts) will primarily influence your premium costs, auto insurance premiums can vary widely. That's because premiums are customized for each policyholder using mathematical formulas that reflect the perceived level of risk.

Fortunately, there are things you can do if you think that your auto insurance costs are higher than normal. The following are some ways to help lower your premiums.

Raise your deductible. For the most part, the higher your deductible, the lower your premiums. Before you raise your deductible, though, you'll want to be sure you can cover the out-of-pocket expense should an accident occur.

Forgo any unnecessary coverage. If you have an older car with limited value, it may make sense to drop your collision and comprehensive coverage, because a claim paid by your insurance company may be minimal and might not exceed what you'd pay in premiums and deductibles. But keep in mind that this coverage may be required by a lender if you took out a loan to purchase the vehicle.

Take advantage of discounts. Depending on your circumstances, you may be eligible for one or more auto insurance discounts. For example, your insurer might provide discounts to those with a safe driving record or who insure more than one car with the company.

Shop around. Auto insurance rates vary from company to company, sometimes significantly. Compare the various rates offered by different insurers.

1AAA, Your Driving Costs, 2017


IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.