6 Ways Seniors Can Save Money on Car Insurance

The price of everything has skyrocketed recently, from groceries to property taxes to the gas in our cars. And speaking of cars, auto insurance has seen one of the largest spikes in cost. There was a 20.3% rate jump from December 2022 to December 2023, even as inflation cooled elsewhere. This is the largest increase in car insurance prices since the 1970s, according to a Reuters analysis of government data. That’s why we’re here to talk about car insurance savings for seniors.

Seniors living on a fixed retirement budget may feel overwhelmed by the rise in car insurance costs. But short of giving up your car and abandoning insurance altogether, there are lots of other ways to save.

Below, we’ll share several ways to score car insurance savings for seniors.

How Much Does Car Insurance Cost?

In 2024, the average cost of car insurance is $2,543, according to Bankrate’s annual report. Several factors impact the price of auto insurance, including where you live, the car you drive, your gender, your driving history and, of course, your age.

On average, seniors spend more on car insurance than any other age group, with the exception of teen drivers. Factors such as hearing loss, vision impairments and slower response times make accidents more likely for older drivers. That all drives up insurance costs.

Where to Find Car Insurance Savings for Seniors

Just because car insurance rates tend to rise in your 70s and 80s doesn’t mean you have to resign yourself to a higher monthly premium. Seniors can make several moves to keep auto insurance costs down.

Here are six strategies to find car insurance savings for seniors:

1. Take Advantage of Senior Discounts

AARP membership is one of the best ways for older Americans to get senior discounts on everything from phone service to groceries and meal delivery services. And car insurance, as it turns out.

Seniors who switch to The Hartford’s policy, designed specifically for AARP members, save an average of $577 on car insurance. In comparison, AARP membership only costs $16 a year ($12 for your first year).

Seniors can also join the Association of Mature American Citizens (AMAC), which offers discounted home and auto insurance with Travelers. AMAC estimates average annual savings of $461 a year on car insurance alone; AMAC membership also only costs $16 a year.

2. Explore Other Discounts

You can get car insurance savings for seniors through senior discounts with memberships. However, there are other discounts you can look into with your current auto insurer, regardless of age, such as:

• Bundle discounts: Bundling your home and auto insurance — or even pet insurance — can often earn you a significant discount across all bundled policies.
• Safe driving discounts: Insurers may lower your car insurance costs if you go multiple years without an accident or ticket. You might also be able to join their safe driving program for additional savings, though this often means letting them track your driving habits by sharing location data in your smartphone. (You might hear these programs referred to as usage-based insurance.)
• Pay-in-full discounts: If you’ve got a fixed retirement budget and can’t risk spending a large chunk of change all at once, there’s no sense paying in full. But if you have access to money in savings, you should consider paying your six- or 12-month premium all at once. You may get a discounted rate.
• Paperless discounts: If you’re comfortable using your insurance company’s app and online portal, ditch paper statements and physical insurance cards. You might get a small discount for the switch.

3. Take a Defensive Driving Course

Insurance companies may offer you a discounted insurance rate for being proactive about safe driving. That means signing up for a defensive driving course that includes tips for how to stay safe behind the wheel.

Many of these classes are designed specifically for seniors and also review evolving vehicle safety technologies.

In some states, insurance companies are required to offer seniors a discounted rate on car insurance after successfully completing a defensive driving course.

4. Adjust Your Coverage

You may be paying too much for car insurance simply because the coverage doesn’t suit your needs. Take the time to determine how much car insurance you need.

For instance, seniors who have enough money in savings may be able to afford a higher deductible. By raising your insurance deductible from $250 to $1,000 per incident, you could save a significant amount of cash.

You can also drop coverages you don’t need. For example, if you’re a member of AARP, you get access to discounted roadside assistance. That means you can drop roadside assistance from your auto insurance policy.

5. Plan Your Retirement Carefully

When thinking about where you’ll retire, you’ve got lots to consider:

• Where your children and grandchildren live
• States that don’t have income tax on pensions, 401(k)s, Social Security benefits, etc.
• States with lower property taxes
• Places you actually enjoy, such as a state with warmer weather

But another factor to consider? States with lower car insurance rates. If you plan to drive regularly in retirement, keep in mind that some states have significantly higher car insurance costs than others.

For instance, according to Insure.com, Florida — a popular retirement destination — has the highest liability-only annual car insurance rates in the country and the second-highest (behind Louisiana) full-coverage auto rates.

6. Shop Around

Sure, car insurance companies offer loyalty discounts for keeping your policy with them. However, shopping around for a new car insurance company is one of the best ways to save money, regardless of age.

At least once every other year, it’s a good idea to see what rates you can get with at least three of the best car insurance companies. Online car insurance marketplaces, such as Insurify, QuoteWizard and EverQuote, allow you to compare multiple insurance companies at once and see where you’d get the best rate.

When comparing car insurance companies, make sure you keep coverages consistent. Otherwise, you’re comparing apples to oranges and won’t get a true picture of potential savings.

And if you get a quote that’s lower than what you’re currently paying, make the switch and enjoy the savings.

Timothy Moore is a personal finance writer and Certified Financial Education Instructor. He covers banks, loans, insurance and taxes for The Penny Hoarder. Find his work on sites such as USA Today, Business Insider and Forbes.