How to Save Money on Car Insurance: 5 Tips for Low Income Earners
Car insurance costs can vary significantly based on your personal situation — from where you live to your driving history. For many working families, these premiums take a substantial bite out of monthly budgets.
But there are strategies that can help. Consider this: Shopping around and comparing quotes every 6-12 months can potentially save you hundreds of dollars annually. According to a study by Consumer Reports, 41 percent of drivers saved $500 or more and 13 percent saved $1,000 or more — just by switching insurers.
While everyone's situation differs, small changes in how you approach car insurance can add up to meaningful savings over time. Practicing the strategies in this guide could help reduce what you pay without sacrificing the coverage you need.
What factors may influence your car insurance rates
Getting a better understanding of how insurers calculate premiums can help you identify potential savings opportunities. Insurance companies consider multiple factors when determining rates and knowing which elements you can control may guide your efforts in reducing costs.
Common factors that may affect your rates
- Your driving record and claims history
- Age and years of driving experience
- Vehicle make, model, and safety features
- Where you live and park your car
- Coverage levels and deductibles chosen
- Annual mileage driven
- Credit history (in most states)
- Marital status
- Prior insurance coverage
Factor | Your control level |
|---|---|
Driving record | Full control through safe driving |
Vehicle choice | Control when purchasing |
Location | Limited (unless moving) |
Coverage levels | Full control |
Credit score | Gradual control |
Now that you have a better understanding of what may affect your rates, you can use specific strategies to help you reduce costs.
5 practical strategies that may help lower your premiums
Each tip below helps you understand rate factors so you can take action to reduce your own costs. Remember, results may vary based on individual circumstances, and what works for one driver might not work for another.
1. Compare quotes from multiple insurers regularly
Shopping around can be one of the most effective ways to potentially reduce car insurance costs. According to Lending Tree, 92% of drivers who switched car insurance saved money, depending on your state and current insurer. However, changing insurers often requires time and careful comparison.
Comparison shopping checklist
- Gather your current policy details
- Request quotes from at least 3-5 companies
- Compare identical coverage levels
- Check insurer ratings and reviews
- Consider local and regional insurers
- Review quotes every 6-12 months
Pros: May find significantly lower rates; keeps you informed about market options
Cons: Takes time to research; switching may affect claims experience or loyalty discounts
2. Review your coverage levels and options
Regularly reviewing your policy components can help identify potential areas for adjustment. While reducing coverage increases financial risk, you may find optional coverages that no longer fit your needs.
Coverage type | Purpose | Consider reviewing if |
Collision | Covers your vehicle damage | Car value is low |
Comprehensive | Non-collision damage | Living in an area of low risk for environmental damage or theft |
Emergency help | Have other coverage | |
Rental car costs | Don’t need to rely daily on a car | |
New-car replacement | Full replacement value | Car is older |
Pros: May identify unnecessary coverage; allows customization to current needs
Cons: Reducing coverage increases out-of-pocket risk; some coverage may be required by lenders
3. Ask about available discounts
Many insurers offer various discounts, though eligibility requirements may vary by company and state. Take time to inquire about available discounts in order to possibly reduce your premium.
Common discount categories to explore
- Safe driver discounts
- Multi-policy bundling (could yield 5%-30% savings when bundling home and auto)
- Low-mileage discounts
- Safety feature discounts
- Good student discounts
- Military or professional affiliations
- Paperless billing or autopay (typically up to 5%)
Pros: May stack multiple discounts; often easy to qualify
Cons: Eligibility varies; some discounts expire or require annual verification
4. Consider usage-based insurance programs
Telematics or "pay-how-you-drive" programs use technology to track driving habits and may reward safe driving with lower rates. These programs monitor factors like speed, braking, and mileage.
Program type | What it tracks |
|---|---|
Mobile app | Phone sensors |
Plug-in device | Vehicle diagnostics |
Built-in system | Manufacturer data |
Pros: May reward safe driving habits; provides driving feedback
Cons: Shares personal driving data; could potentially increase rates for some driving patterns
5. Maintain good credit and driving records
In most states, credit history may influence insurance rates. Similarly, a clean driving record typically qualifies you for lower premiums. While improvements take time, focusing on these areas may help in the long-term.
Timeline for potential impact
- Minor violations: Often affect rates for 3-5 years
- Major violations: May impact rates for 5-10 years
- Credit improvements: Gradual impact as score increases
- Continuous coverage: Builds positive history over time
Pros: May qualify for better rates over time; benefits multiple financial areas
Cons: Takes patience; past issues linger; credit use varies by state
Raising your deductible from $200 to $500 commonly reduces premiums by approximately 15%-30%, though this varies by vehicle and state. However, consider your ability to cover the higher deductible before making this change.
Managing insurance payment timing with Cash Out
When insurance premiums come due, having flexible access to your earnings may help with payment timing. EarnIn's Cash Out1 lets you access up to $150/day, with a max of $1,000 between paydays of wages you've already earned.
With Cash Out1, you can get:
- Up to $150/day, with a max of $1,000 between paydays of your already earned wages.
- No interest, no mandatory fees — just an optional tip-based2 model
- Standard transfers that take 1–3 business days
- Lightning Speed3 option for faster access in minutes, starting at $3.99 per transfer
Important considerations: Tips2 are entirely optional and can be adjusted at any time. Remember that accessing wages early means less money on actual payday, so plan your budget accordingly.
Transfer option | Speed | Cost |
Standard | 1–3 business days | No mandatory fees |
Lightning Speed3 | Minutes | Starting at $3.99 |
This flexibility may help when you need to make an insurance payment before payday arrives, potentially helping you maintain continuous coverage and avoid lapses that could increase future rates.
Smart approaches to managing insurance costs
Long-term cost management requires consistent attention paid to your insurance needs. Consider these practical approaches to help secure ongoing savings:
Annual review checklist
- Set calendar reminders for policy renewal dates
- Track any rate changes year-over-year
- Document safe driving milestones
- Update insurer about life changes (marriage, moving, new job)
- Review coverage needs as vehicles age
- Keep organized records of all policies
These considerations may help you stay proactive about insurance costs. Remember, individual results vary based on personal circumstances and market conditions.
For families managing multiple expenses, reviewing insurance regularly becomes especially important. Small adjustments across various policies can add up to meaningful household savings.
Taking action on your car insurance costs
Getting started with potential savings involves simple first steps:
- Gather your current policy details — Know exactly what coverage you have and what you're paying
- Research comparison options — Use online tools or work with agents to explore alternatives
If payment timing becomes challenging while managing insurance costs, Cash Out1 may help bridge the gap between paychecks. Download the EarnIn app today to explore your options for accessing earned wages.
Small steps toward reviewing your car insurance can add up to potential savings. Whether you're exploring financing options or simply trying to reduce monthly expenses, taking time to understand and optimize your insurance costs may free up money for other priorities. Even modest income situations can benefit from strategic insurance shopping.
FAQs
How often should you shop for car insurance?
Shopping every 6–12 months may help identify savings opportunities. Insurance rates change frequently based on market conditions and your personal factors.
What information do you need to get quotes?
You'll typically need your driver's license, vehicle information (make, model, VIN), current coverage details, and driving history. Having your current policy handy speeds up the process.
Can Cash Out help with insurance payments?
EarnIn's Cash Out1 provides access to $150/day, with a max of $1,000 between paydays, which may help with payment timing. Standard transfers take 1–3 business days, while Lightning Speed3 delivers funds in minutes for a fee starting at $3.99.
Do all insurers use credit scores?
Most states allow insurers to consider credit information when setting rates, though some states restrict or prohibit this practice. Check your state's specific regulations.
How quickly can Lightning Speed deliver funds?
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
This Blog was sponsored by EarnIn. While the author received compensation, the information shared is grounded in independent research and intended to provide helpful and accurate guidance to readers.
EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.
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EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out. For additional information about your Daily Max and Pay Period Max, please refer to our FAQ. Service may not be available in all states. EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed may not be available at all times and/or to all customers. See the Fee Table for details. Tips are optional and do not affect the quality or availability of services.
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Tips go to EarnIn and help us provide tools such as Credit Monitoring for free and keep Lightning Speed fees low. Your service quality and availability aren’t affected by whether you tip or not.3
Lightning Speed is an optional service that allows you to expedite the transfer of funds for a fee. Depending on the product, the fee may be charged by EarnIn or its banking partner. Lightning Speed may not be available to all customers. Actual transfer speeds depend on your bank. See the Lightning Speed Fee Table for details.Popular articles
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