The 12 Best Ways Retirees Can Save Money On Car Insurance

Something you may have not 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 in their retirement. Fortunately, there are many ways for retirees to save on auto insurance, and although they vary — they touch on regional differences, prudent consumer research, driver education, and even the use of technology — they could be of value to you since they've been proven to work.

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 and 546 important bits of data, the research concludes that insurance 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. That's because aging comes with factors like dwindling eyesight, mobility, and mental acuity which, to an insurer's risk assessment, isn't good. In some cases, side effects of certain medications can negatively impact your driving and raise your insurance premiums, since insurance companies will also view this as placing you at a higher risk for accidents. With seniors 80 years old and over accounting for 39% of Multiple-vehicle fatalities, compared to 21% of drivers under 60, you can see why.

With the staggering rise of auto insurance in the U.S. being what it is, if a defensive driving course brings your insurance premiums down, it's worth your time to do one. AARP offers an online "Smart Driver" course, currently at a 10% discount for AARP members. So not only can you potentially lower your insurance rates, but you can do it at a discount. Completion of the course makes you eligible for a multi-year safe driver insurance discount, thanks to an online curriculum that factors in the aforementioned physical changes related to age into a defensive driving strategy. The course will cost you a grand total of just $26.95. AAA also offers a six-hour senior defensive driving course, at the end of which you'll receive your certificate of completion. This course costs even less, than the previous course, at just $25.

As per Amica, you can spend anywhere from $20 to $50 on a defensive driving course, the completion of which can save you 10% on your car insurance. 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 insurers provide a premium discount upon the completion of an approved course. As per MoneyGeek, that amounts to average savings of between $200 and $800 over three years.

Your 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's data is based on a 40 year old male with full coverage, decent credit and driving history, it makes sense that some benefits are transferable to a 60 year old driver with a similar profile. The top three vehicles in their selection of cheapest cars to insure — the Mazda CX-5, Honda CR-V, and Hyundai Kona — are in the range of $1,912 to $1,925 per year based on 13,000 km (8,077 miles) per year 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 — costing between $3,218 and $6,079 per year.

Stay away from vehicles with higher incidents of vehicular claims, poorer safety scores, and more expensive costs to repair and maintain. These factors drive up the cost of insuring a vehicle. That takes research, but thanks to The Insurance Institute for Highway Safety (IIHS) and the Highway Loss Data Institute (HLDI) tables providing a comprehensive list of vehicle insurance losses by make and model, figuring that out yourself should be easier.        

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 state might make sense. According to MarketWatch, Louisiana, aside from being the worst state to retire, also has the highest average car insurance in 2025 at an average $3,481 per year. With insurance rates estimated to rise anywhere from 6% to 9% into the next year, knowing that living in Washington, D.C. could cost you an average $776 above the national average right now, might influence your decision to stay if you are a resident. 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 representing 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. With premiums in places where seasonal flooding, hurricanes, and wildfires are becoming the norm, the destruction of vehicles and the cost to replace or repair them motivates insurers to raise their rates in these states. Just 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. 

You've heard the saying "everyone's situation is different," and very few things have a bigger impact on your situation than age. Remember your retirement lifestyle may ultimately determine your future financial success. The same applies to your auto insurance, which like other changes to your lifestyle, should be amended accordingly. According to Consumer Reports, if you've been driving under a similar insurance policy you were under pre-retirement, you may want to think about how frequently you drive now, versus when you began your policy. For instance, driving under 10,000 miles per year could knock $116 off your premium. If you raised a family over your lifetime and now your kids are all adults, there's no reason for them to 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. Although your goal is to lower your car insurance costs, whatever you do, don't make this auto insurance choice that could cost you in the end. 

The Insurance Information Institute suggests raising your deductible is a viable way to lower your insurance payments. Paying your deductible upfront — your deductible is what you owe before your insurance coverage steps in — could lower the cost of your insurance coverage by up to 30% if you raised your deductible to $500. Raising your deductible to $1,000 might lower your coverage by as much as 40%, although you'll need to be sure you can actually pay that if you need to. Depending on your insurer, they may also use a percentage as your deductible, but ultimately it operates the same way to lower or raise your overall coverage. In the case of you needing to actually use your insurance coverage for say, a natural disaster, instead of being on the hook for a set dollar amount as a deductible, you will instead pay a percentage before your coverage kicks in. The state you live in 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 seem like a minor inconvenience for you at the moment, getting a speeding ticket will cost you in more ways than you realize in the end. If you're looking to lower the cost of your insurance coverage, keeping your record clean is maybe one of the easiest ways to do it. Insurers like GEICO, for instance, offer discounts on your coverage based on the health of your driving record — GEICO offers a maximum of 22% off your coverage just by managing to drive safely and without incident. At just over a fifth of your average coverage, that's a major development. According to MoneyGeek, the average cost of full insurance coverage with a $1,000 deductible is $188 per month, or $2,256 per year. With a 22% discount, that's just over $496 per year in savings.

If you've ever been at fault for an accident, according to SeniorSite, you can expect to pay somewhere up to 44% more for your car insurance, or the equivalent of around $872 depending on your insurer. Even worse, a poor driving history doesn't just raise your auto insurance rates, but it also determines how long your rates remain higher. While not the worst infraction related to driving, getting caught speeding will also cause your rates to soar. Just one speeding ticket could raise your insurance by 25%, although that amount could be less or more depending on your state.  

According to Schneiderman Insurance Agency, one of the benefits of bundling your 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 motivates the insurer to offer a discount of anywhere from 10% to 25% on each vehicle. The more vehicles you insure, the more money you save. For example, if your insurer offered you a 20% discount on two vehicles that each cost you $2,000 per year to cover, you could bundle both under a multi-car policy and save $800, or $400 on each vehicle, every year. This also provides a more straightforward, easy to track billing period since you only have to pay the one rate for both your vehicles, once a month.

According to Griffith E. Harris Insurance Services, an insurance company specializing in multi-policy insurance, bundling different insurance products under the same insurer opens up more discounts for you. For example, bundling life insurance, and home or renters insurance with auto insurance makes it easier for the company to manage your account, and the insurer passes on these administrative savings to you in the form of discounts. As per CNBC, a few of the best multi-policy insurance bundles offer discounts of as much as 25%.  

According to insurance agency The Baldwin Group, one of the best ways to keep your insurance rates from rising is to take care of your vehicle. Although the point of regular vehicle maintenance is to keep your vehicle in good working condition, it also prevents pricey repairs or technical issues — like worn brake pads — which lead to accidents that elevate insurance premiums. Ensure your tires are regularly rotated and pressure checked every 5,000 to 8,000 miles, your brakes are inspected — brake pads at least every 20,000 miles and rotors at minimum every 70,000 miles — and your suspension system, including alignment, are checked every 12,500 miles and 6,000 miles respectively. Also ensure you check your exhaust system, wipers and windshields, transmission and power steering fluids, as well as your battery system as advised by your mechanic. Of course, you should also know how to tell when it doesn't make sense to repair your vehicle anymore.

Aside from regular maintenance, the safety features of your vehicle can have an impact on your insurance rates too. Insurance companies like GEICO offer discounts anywhere from 5% to 23% for specific safety features. For example, an anti-lock braking system would get you a 5% discount on your insurance with GEICO, while an anti-theft system could save you an additional 23% on your comprehensive premium. By purchasing vehicles that cost the least in repairs over time, you can hedge your bets. 

With the alarming amount of Americans spending over $1,000 a month on their vehicles, it's of more importance to shop around for the best, yet most cost effective insurance for your vehicle. If you already have an insurer, the best place to start is with them. Test the waters by adjusting your plan as necessary — or based on your evolving situation as previously discussed — and ask for a lower adjusted rate to go with it. Take the rate your current insurer offered you and peruse comparison sites like Compare.com, Insurify, or The Zebra for better deals. Stay away from sites known to sell information to third parties, like EverQuote CarInsurance.com, Insure.com, QuoteWizard, and Insurance.com.

Independent agents are more motivated to gain your business since they have more responsibility for building client relationships on their own to earn their commissions. However, they also have more options in terms of insurance products since they don't have any allegiance to a particular company. So for instance, they are more inclined to keep you from purchasing auto insurance that's a waste of money because it actually matters to them that you're a repeat customer. If you find an insurer that beats your current rate, sign a new policy agreement with them, or take the new quote back to your current insurer to see if they'll 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 for you. In fact, there are benefits to changing the frequency of your payments to your insurer that 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. Alternatively, paying your insurance on a yearly basis, all upfront, eliminates administrative fees, ensures you don't miss any payments over the year since you're on a 'one and done' schedule, and therefore, means no late fees or loss of coverage — this assumes, of course, you make your one payment annually. 

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 on your insurance. 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.

If you've taken your defensive driving course to lower your insurance payments but still want more bang for your insurance buck, there are other ways to let your insurer know how good a driver you are on a regular basis that can add up to more discounts. According to Consumer Reports, 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 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 raise your risk profile, for instance — and your usage of your phone while driving. All of these factors create a risk profile for you as a driver, and considering how insurers view aging drivers, typically represented by higher insurance rates.

Aside from helping to make you a safer driver, insurers could reward you with discounted savings of anywhere from $250 to potentially as much as $1,000 per year. You'll have to be careful with this option however, as making mistakes while driving could actually convince your insurer you're a high risk driver resulting in them raising your rates. Phone apps like DriveScore are easily accessible for the public, while companies like Cambridge Mobile Telematics provide driver tracking tech for insurance companies. 

In the worst case scenario, a DUI charge can cause your insurance to be voided. and is more serious than your average traffic infraction. Even if your insurance company still chooses to insure you, it will be at a much higher rate, which suggests your insurance rates could go up by as much as 85%. A graph provided by ValuePenguin reveals what that means in monthly insurance rates for a 30-year-old man with no other traffic infractions. Remember, your age is a big factor in an insurer's risk assessment, so these amounts could be even higher as a senior if your premiums are going up anyway. DUI rates rise from a low of $221 per month at Progressive, to a high of $444 per month at Nationwide. Even USAA, one of the best places to use a military discount since the company specializes in servicing veterans and their families, will hit you with a rate of $215 per month. Between a list of nine of the top insurers in the country, this represents anything from $48 more per month to a wince-inducing $244 extra per month. Walking and taking public transit is much more affordable than driving, and Uber generally is as well unless you drive over 10,000 miles per year, and may even save you money if you reserve ahead.