With all the things to squeeze into a budget after college, you could probably use some breathing space. Saving money on car insurance is one way to get it without reverting to nightly ramen noodles.
With some mindful shopping you can free up money for other goals, whether it’s to pay down student loans faster or build out a professional wardrobe.
Here are some tips for cutting car insurance costs.
1. Shop around
Get car insurance quotes from several insurance companies and compare prices. It takes only a few minutes online, and it could save you a bundle. A 2015 NerdWallet analysis of car insurance quotes nationwide found that drivers could save an average of $859 a year by shopping around for the best rates.
First, though, decide the amount and coverage you need and the deductible. Then compare prices for that same amount and type of coverage across carriers.
2. Ask about discounts
Once you choose an insurance company, get all the discounts you can. The types and amounts of available discounts vary by insurer. Here are some common ones that might apply to you:
- Multipolicy: Most companies give you a discount for buying more than one policy from them, such as a home and auto insurance bundle.
- Safety features: The most common features that qualify for discounts are anti-lock brakes, air bags and electronic stability control systems.
- Going paperless: Some insurers give you a discount for signing up for coverage online and for choosing electronic documents.
- Paying in full: You usually pay less if you pay in full for six or 12 months of coverage than if you pay monthly.
Remember, though, discounts don’t tell the whole story. A company that touts big discounts might have a high starting price, which means it will still charge more than a company with low overall prices.
3. Check out usage-based insurance
Usage-based insurance programs, such as Progressive’s Snapshot or Allstate’s Drivewise, base part of the price on how you drive. The programs use smartphone apps or plug-in devices to track mileage and certain driving behaviors. You can save money by avoiding the habits insurers consider risky, such as hard stops and late-night driving.
If you don’t drive much, you might want to consider a pay-per-mile program, such as Metromile or Esurance Pay Per Mile. Both programs say they can save money for customers who drive fewer than 10,000 miles a year. Esurance’s program is available in Oregon. Metromile is available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.
4. Pay your bills on time and manage credit wisely
Most insurance companies consider your credit when setting rates. California, Hawaii and Massachusetts don’t allow the practice for car insurance, but in every other state, a solid credit history will mean lower prices.
To gauge how well you handle credit, insurance companies consult your credit-based insurance score. It’s different from the credit score a lender sees, but it’s based on some of the same factors. FICO, which calculates the scores for some insurers, says these are the best things you can do to improve your credit for lower insurance rates:
- Make all your credit card and loan payments on time. Your bill-paying history counts more than any other factor.
- Pay down your credit card balances, and keep the balances well below the credit limits.
- Apply only for loans and credit cards you really need. Avoid applying for retail store credit cards just to get discounts.
5. Drive a cheap-to-insure car
The cars that are cheapest to insure are kind of like your great-aunt’s sensible shoes: They’re practical and unsexy. That doesn’t mean you have to buy a minivan — although minivans are among the cheapest vehicles to insure — but it does mean considering insurance costs when you shop for a car.
If you’re thinking about buying or leasing, run car insurance quotes for your favorite models to narrow the choices. You can use an online car insurance comparison tool to get started.
Your work isn’t over once you’ve found the best car insurance deal and bought a policy. Prices and circumstances change. Get quotes at policy renewal time to make sure you’re still getting the best price for the coverage, and don’t be afraid to change carriers if another offers you a better deal. NerdWallet’s comparison tool can help.
This article first appeared at NerdWallet.