Save on car insurance

How to find the right policy that will pay when you need it most

Last reviewed: October 2010
Illustration of a car driving down a winding road past dollar signs
Illustration by Doug Boehm

Those quirky characters in auto-insurance TV ads might give you more laughs than actual savings, according to a 2009 survey by the Consumer Reports National Research Center. Only 14 percent of 4,500 ConsumerReports.org subscribers who compared premiums found that they would save money by switching insurers.

That doesn't mean shopping is a waste of time. But it's only one way to save on auto premiums, which these days are buffeted by a slew of variables, such as:

Rising costs

Auto-insurance premiums are up 10 percent since 2008, compared with zero for overall inflation. That's a big change from the three prior years, when rates rose 1 percent per year on average.

Credit-based insurance scores

Hard times have hurt many consumers' credit scores. That could result in rate increases, thanks to most carriers' use of credit-based insurance scores in setting premiums. Consumer advocates (including Consumers Union, the nonprofit publisher of Consumer Reports) have long argued that credit-based scoring is unfair because scores are not related to accident risk. But legislative efforts in 27 states to ban or restrict the practice over the past two years have been unsuccessful.

Uninsured motorists

The recession has prompted unemployed consumers to go without insurance, which could shift some or all of their liability costs to you.

Data mining

Some insurers use consulting firms that mine databases for personal policyholder information that may or may not be accurate. One company claims to dig for information about your kids, your marital status, your job, and other data to confront you with for a possible rate hike.

Corner-cutting repairs

Some insurers push policyholders to get their cars fixed at specified repair shops, which left our readers less satisfied, so that the companies can cut costs, often through use of cheaper aftermarket replacement parts.

Some cost factors are beyond your control, but there's still plenty you can do to cut your premiums for the auto coverage you need.