How to Cut Your Car Insurance Costs: Dave Ramsey's Top Strategies

Your paycheck just hit the bank, and after months of careful budgeting, you’re finally thinking about that dream purchase—until you remember: the car insurance bill is looming. It’s one of those unavoidable expenses that can derail even the best financial plans. But according to Dave Ramsey and his team at Ramsey Solutions, there are proven ways to reduce this burden significantly. Here are five actionable strategies to lower your car insurance expenses without sacrificing coverage.

1. Ask Your Insurer About Every Discount Available

Most people don’t realize they’re leaving money on the table. Your insurance company likely offers dozens of discounts, but they won’t tell you about them unless you ask. Common discounts include:

• AAA or similar membership benefits
• Public service employee status
• Military service
• Excellent driving record (accident-free and traffic-violation-free)
• Good grades (if you’re a student)
• Completing a driver’s education course
• Senior citizen status
• Paperless billing

The surprising part? You might qualify for multiple discounts simultaneously. Each one alone may seem modest, but combining several can result in substantial savings. This is one of Dave Ramsey’s most straightforward recommendations because it requires minimal effort on your part—just one phone call to your current provider.

2. Choose a Vehicle That Won’t Break the Bank to Repair

Here’s a fundamental truth: the more expensive a car is to repair or replace, the higher your insurance premiums will be. New vehicles come with steep insurance costs because the replacement and repair expenses are astronomical. Instead, Ramsey Solutions recommends targeting used cars that are between 4 to 10 years old—they’ve already experienced the worst of depreciation, but they’re still relatively reliable.

Vehicle size matters too. Smaller cars and compact SUVs cost significantly less to insure than full-size trucks or luxury vehicles. Before purchasing any vehicle, use this simple strategy: call your insurance company and request a quote on the exact model you’re considering. If the premium is too high, keep shopping. Your insurance costs shouldn’t override the benefits of a particular vehicle.

3. Shop Around and Play Hardball With Rates

Loyalty to an insurance company doesn’t always pay off financially. If you haven’t compared your rate to competitors’ offerings in the past year, you’re likely overpaying. Spend an afternoon getting quotes from at least three different companies—online comparisons make this easier than ever.

When you find a better rate elsewhere, don’t hesitate to mention it to your current insurer. Insurance companies value your business and may be willing to match that lower quote to keep you. Some will even offer an additional loyalty discount as a thank-you for your continued patronage. This negotiation can result in meaningful savings without changing providers.

4. Bundle Your Insurance Policies for Maximum Savings

If you own a home and a car—or multiple vehicles—bundling these policies under one insurance company could slash your overall costs by nearly 25%. That’s a quarter off your total bill, which translates to hundreds of dollars annually for many households.

Beyond the financial benefit, bundling also simplifies your life administratively. You’ll have one contact person, one bill to pay, and one portal to manage all your policies. Insurance companies love keeping your entire business in-house because it reduces their overhead—and they pass some of those savings to you.

5. Change How and When You Pay Your Premiums

Here’s a fact that Dave Ramsey emphasizes: insurance companies must process and handle each monthly payment you make, which costs them money. To offset that expense, they charge you more overall when you pay monthly versus annually. One real-world example shared on social media showed someone saving $120 every six months ($240 per year) simply by switching to annual upfront payments.

If paying the entire year upfront seems daunting, start setting money aside now so you’re prepared when your renewal date approaches. Beyond annual payments, some insurers offer discounts for automating your payments or going completely paperless—so ask about those options too.

The Bottom Line

Reducing your car insurance bill doesn’t require changing providers or cutting coverage. According to Dave Ramsey’s financial wisdom, it’s about being proactive: asking about discounts, making strategic vehicle choices, shopping around, bundling wisely, and paying smart. Take these steps, and you’ll find that extra money heading back into your checking account—ready for those concert tickets or your emergency fund.