The 11 Best Ways Retirees Can Save Money On Car Insurance

Something you may not have factored into your retirement savings is how car insurance can become a financial burden. With the ways in which President Trump's tariffs are making some American cars more expensive, having a strategy to save on auto insurance can provide options for seniors trying to save more money. According to data collected by SeniorSite, on average, seniors in the U.S. spend around $2,103 per year on auto insurance. Based on 145,500 car insurance rates, rates for seniors typically grow as they age — rising to an average premium of $2,385 per year for the average 70 year old male. 

Growing rates occur because aging generally comes with factors such as weakening eyesight, mobility, and mental acuity — all of which factor into an insurer's risk assessment. In some cases, side effects of certain medications can also negatively impact your driving, and raise your insurance premiums, since it can place you at a higher risk for accidents. Fortunately, there are many ways for retirees to save on auto insurance, and although they vary — touching on things like regional differences, prudent consumer research, driver education, and even the use of technology — they could be of value to you.

With the staggering rise of auto insurance in the U.S., it could be worth taking a defensive driving course to bring your insurance premiums down. AARP even offers an online "Smart Driver" course, and completion of the course can make you eligible for a multi-year safe driver insurance discounts through your coverage provider. AAA also offers a six-hour senior defensive driving course, at the end of which you'll receive your certificate of completion. Best of all, these courses cost less than $30 each.

As per Amica, you can spend anywhere from $20 to $50 on a defensive driving course, the completion of which can save you up to 10% on your car insurance premiums. However, different insurers and states have varying parameters for what type of driving course qualifies you for the discount. There are 37 states with statutes requiring that insurers provide a discount upon the completion of an approved course. As per MoneyGeek, that can amount to an average savings of between $200 to $800 over three years.

Your specific vehicle can impact your insurance premiums. The cheapest cars to insure, while often falling in line with the affordability of the vehicle, are also affected by the driver, the cost of maintaining the vehicle, and the vehicle's safety record. While there's not much you can do about your age, you definitely have control over what car you purchase. Although CarEdge insurance premium estimates are based on a 40-year-old male with full coverage and a decent credit and driving history, these can still serve as a good barometer for what to expect. The top three vehicles in among the cheapest cars to insure — the Mazda CX-5, Honda CR-V, and Hyundai Kona — boast premiums in the range of $1,912 to $1,925, per year, based on roughly 8,000 miles of driving per year. That's a far cry from the most expensive of the cheapest vehicles — the GMC Hummer EV, Chevrolet Corvette Z06, and the Nissan GT-R — which cost between $3,218 and $6,079 per year in insurance premiums.

It can be important to stay away from vehicles with higher incidents of vehicular claims, poorer safety scores, and more expensive costs to repair and maintain. These factors can drive up the cost of insuring a vehicle. While this does take personal research, thanks to The Insurance Institute for Highway Safety (IIHS) and the Highway Loss Data Institute (HLDI), there is a readily available and comprehensive list of vehicle insurance losses by make and model that can help you speed up the process.      

It may not be the first thing that comes to mind when considering car insurance, but when you consider that car insurance rates are rising fastest in certain states, moving out of your current state could make sense. According to MarketWatch, Louisiana, aside from being the worst state to retire, also has the highest average car insurance in 2025 with an average premium of $3,481 per year. Similarly, with insurance rates estimated to rise anywhere from 6% to 9% over the next year, knowing that living in Washington, D.C. could cost you an average of $776 above the national average might influence your decision to stay or not. If you want a sense of what state factors can affect your insurance rates, consider Louisiana's poor road infrastructure — 30% of the state's roads are in disrepair — and high car accident fatality rates — 19.7 deaths per 100,000 residents. That's 6.9 deaths per 100,000 residents above the national average.

Another factor to consider is the impact of climate change on auto insurance rates, especially where regional prices are concerned. There are generally higher premiums in locations where seasonal flooding, hurricanes, and wildfires are the norm. From the early 2000s into the 2010s, the amount of natural disasters totaling over $1 billion in damage rose from 6.7 incidents per year to 13.1. 

It's important to remember that your retirement lifestyle may ultimately determine your future financial success. The same applies to your auto insurance, which should be amended as things change in your life. If you've been driving under a similar insurance policy as you were pre-retirement, you may want to think about some changes. Namely, the frequency with which you actually drive now, versus when you began your policy, has likely changed. For instance, driving under 10,000 miles per year could knock $116 off your premium in 2025, per Consumer Reports. 

Similarly, if your kids are all adults, there's no reason for them to still be on your insurance policy. As per MarketWatch, the average annual cost of insuring a 25 year old is $2,826, while the average insurance for a 35 year old is $2,433 per year. By taking your adult kids off your policy, you could save thousands of dollars.

Raising your deductible can be a way to lower your insurance payments. Paying your deductible upfront — your deductible being what you owe before your insurance coverage steps in — could lower the cost of your insurance coverage by up to 40%, according to the Insurance Information Institute. With that said, the state you live in can and will dictate the rules around how deductibles work, as well as the language insurers have to use in their policies related to it. 

While it may only seem like a minor inconvenience in the moment, getting a speeding ticket can cost you in more ways than you might realize. If you're looking to lower the cost of your insurance coverage, keeping your record clean is one of the easiest ways to do it. Insurers like GEICO, for instance, offer discounts up to 22% on coverage based on the health of your driving record.

If you've ever been at fault for an accident, according to SeniorSite, you can expect to pay up to 44% more for your car insurance. Even worse, a poor driving history doesn't just raise your auto insurance rates, but it can also determine how long your rates will remain higher. Getting caught speeding can also also cause your rates to soar. Just one speeding ticket could raise your insurance rates by 25%, although that amount could vary depending on your state.  

One of the benefits of bundling insurance products, specifically if your household owns more than one vehicle, includes the option of a multi-car policy. A multi-car policy places the insurance for both vehicles under a single insurer, which can lead to a discount of anywhere from 10% to 25% on each vehicle, according to Schneiderman Insurance Agency. To put that in perspective, if your insurer offered you a 20% discount on two vehicles that would normally cost you $2,000 per year in coverage for each, you could bundle and save $800 every year. This also provides more straightforward billing since you only have to pay one rate for both your vehicles.

Bundling different insurance products can also open up more discounts. For example, bundling life insurance, home or renters insurance, and auto insurance can lead to significant savings. As per CNBC, some of the best multi-policy insurance bundles offer discounts of as much as 25%.  

One of the best ways to keep your insurance rates from rising is to take good care of your vehicle. Although the point of regular vehicle maintenance is to keep your vehicle in good working condition, it can also prevent pricey repairs and technical issues. Some easy things you can do include ensuring your tires are regularly rotated as well as getting your brakes, suspension system, and alignment checked at regular intervals. Similarly, checking smaller things like wipers, windshields, fluids, and your battery can similarly help. With that said, you should also know how to tell when repairs aren't worth it anymore anymore.

Aside from regular maintenance, the safety features of your vehicle can also have an impact on your insurance rates. Insurance companies can offer discounts anywhere from 5% to 23% for specific safety features. For example, an anti-lock braking system would get you a 5% discount, while an anti-theft system could save you an additional 23%.

With an alarming amount of Americans spending over $1,000 a month on car payments alone, it can be particularly important to shop around for the most cost effective insurance. The best to start is likely with your existing insurer. Test the waters by adjusting your plan based on your evolving situation — and ask for a lower adjusted rate to go along with it. Then, take the rate your insurer offered you and peruse comparison sites. However, make sure to stay away from sites known to sell information to third parties.

It could also be worth working with an independent agent as they are generally more motivated to gain your business due to needing to earn their commissions. They also tend to have more options in terms of insurance products since they don't have any allegiance to a particular company. With that said, if you find a plan that beats your current rate, you can either sign a new policy agreement with them or take the cheaper quote back to your current insurer to see if they'll price match or beat the estimate. Either way, you win.    

Just because the standard practice is to pay your insurance premiums on a monthly basis, doesn't mean that this practice is the best one. In fact, changing the frequency of your payments can lower your overall premiums. Monthly payments come with administrative fees, late payment fees, and higher odds of missing a payment which could result in even higher premiums or losing your insurance coverage altogether. Alternatively, paying your insurance on a yearly basis upfront can eliminate administrative fees and ensure you don't miss any payments — meaning no late fees or loss of coverage.

Aside from the convenience, financial, and emotional security of knowing your vehicle is covered for the year, you can also get a paid-in-full discount. According to Clearsurance, paying your insurance upfront and in full can earn you a discount of anywhere from 5% to 20% in 2025. That's on top of the administrative fees you don't end up paying. While there are a lot of insurance policies that are a waste of money, auto insurance isn't one of them. You might as well take care of it all at once, and at a discount, if you can afford to.

Entering into a driver tracking program — referred to as telematics — can raise your insurer's confidence in your driving ability, thanks to data collection. Telematics insurance requires the installation of a black box in your vehicle, or an app on your phone, which then tracks your average daily speed, how often you hit the brakes, when you're most active as a driver — night driving or rush hour rides can increase your risk profile — and even phone usage while driving. All of these factors create an overall risk profile for you as a driver, which could lead to significant discounts.

Insurers can reward safe driving with discounted savings of anywhere from $250 to potentially as much as $1,000 per year. However, you have to be especially careful with this option, as making mistakes while driving could instead convince your insurer you're a high risk driver and lead to increased rates.