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Quick notes:
- You could save an average of $234.14 by negotiating your auto insurance costs.
- Getting rid of excessive coverage, making the case that you are a “low-risk” driver, and taking advantage of being a loyal customer are all great tactics for negotiating your rate.
- Don’t be afraid to ask your current provider about new discounts you may qualify for.
Auto insurance rates are more flexible than most people realize
Here’s a surprising statistic – according to CarInsuranceComparison.com, 42% of Americans have negotiated (or are negotiating) their auto insurance costs. It’s men (42%) and Millennials (45%) who negotiate their auto insurance rates the most.
What’s more, when financial consumers do negotiate their auto insurance costs, they save an average of $234.14, according to CarInsuranceComparison.com.
With that kind of money on the line, what are the remaining 58% of people who don’t negotiate missing out on? Certainly, auto insurance customers who do negotiate rates are happy with the results.
“I just purchased a new car and used the method of pitching auto insurance providers against each other to negotiate a better rate,” says Katie White, a service adviser at Audi Bellevue, an auto dealership in Bellevue, Washington.
White emailed four separate auto insurance providers and told them what she was looking for and asked what they are able to offer price-wise.
“I let each of them know I was contacting other providers and that I will be choosing the one that meets my needs at the best price point,” she says. “I spelled out what kind of coverage I was looking for, provided them with my car’s make and model. When it came down to it, I was able to get a good price by negotiating and I would highly recommend others do the same.”
Use these tips to negotiate a better auto insurance deal
Working insurers against each other in exchange for a big price break, like White did, is a great way to save money on car insurance — but it’s not the only way to get the job done.
Here are tried-and-true strategies actual Americans have used to negotiate better auto insurance deals.
Don’t start your call with a demand for a lower rate. Before you begin, understand your policy in its entirety, says Jeff Briglia, chief insurance officer at Metromile, a pay-per-mile auto insurance services firm.
“You can save money by getting rid of excessive coverage,” Briglia says. “For example, you may not need to pay for roadside assistance if you receive it through a membership program like AAA or your credit card.”
Let your car insurance company know about any changes in your life. “If you moved houses, recently got married, or have changed jobs since you first purchased insurance, you may now be eligible for a lower rate,” Briglia notes. “Plus, your employer may have negotiated a discount with an insurance company.”
For example, if you used to commute to work everyday, but have been working from home for the last few months, let your auto insurer know. In many states, annual mileage heavily influences rates. That makes sense, because the less often you are on the road, the lower the odds are that you’ll need to use your insurance.
Sell yourself as a “low-risk” driver. When negotiating to lower your insurance policy costs, job one is to convince the insurer that you have a low probability of filing a claim.
“In other words, make the case you’re a low-risk client,” says Nermeen Ghneim, owner of the personal finance blog Savvy Dollar. “Items like low mileage usage, good student discounts, and car safety features like passive-restraints and keeping your car in a garage all demonstrate a lower risk.”
Take advantage of being a “club” member. In addition to showing that you are a low-risk client, auto insurance consumers can also seek affiliation discounts for memberships for certain clubs, associations, and universities. “For instance, I get an additional discount for being an alumnus from the University of Maryland,” says Ghneim.
Take advantage of being a loyal customer. Car insurance companies hate to lose regular business, so leverage your loyalty to get a better price from your current insurer. “Get insurance quotes from two or three new providers, making sure that you ask for the same deductibles, collision, etc. that you already have,” says Geoff Cudd, founder of FindtheBestCarPrice.com. “When you get multiple new quotes, at least one is almost guaranteed to be lower than your current rate.”
Once you have the quotes in hand, call your current insurance provider and tell them as nicely as possible that you have been a loyal customer for years. “Just remember that people will respond much better to being sweet than being threatening,” Cudd says. “Explain that you want to remain a customer, but can’t justify staying when cheaper rates are available elsewhere (and feel free to share your competing offers). Then, kindly ask if they are able to beat the other quotes you have received. If not, just go with the other provider.”
Ask for a deal. If you’ve had no luck negotiating a better rate, ask your current auto insurance provider if you have other options to reduce your rate. “You can ask about multiple new discounts you might qualify for, like being claim-free for a certain period or paying your premium in full,” says Roslyn McKenna, an insurance expert at Finder.com.
McKenna says that you can also see if your insurer offers usage-based insurance, which lets your driving record be the biggest factor in determining your rates. “People who drive safely or don’t drive much could save the most with these programs, as can young drivers or drivers with poor credit,” McKenna says.
Don’t settle for higher auto insurance rates
Often, it’s enough just to get on the phone and start talking to auto insurance companies to get a price break or two on your policy.
As McKenna puts it, “Drivers who don’t compare auto insurance quotes every year and don’t negotiate price could be missing out on hundreds of dollars.”
Make no mistake, any negotiation that puts “hundreds of dollars” in your pocket is worth the effort.