Stop Overpaying!' Suze Orman Reveals 4 Essential Steps To Combat Skyrocketing Car Insurance Rates – Here's What You Need To Do Now

With spiraling living costs, car insurance rates are skyrocketing, making it tough on many car owners. For the third straight year, premiums have soared, with financial expert Suze Orman revealing that the average yearly cost is now nearly 50 percent higher than in the summer of 2021. 

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The days of car insurance being just another ho-hum household expense are fast becoming a thing of the past. It’s now one of the most significant items in your budget, and Orman says you need to be careful – and strategic – about how you pay for it.

"The reality is that car insurance is now so expensive it has shifted from one of those costs you just swallow hard as a necessary household expense to a big budget hit that deserves your strategic attention on how to (safely) minimize your costs," Orman stated in a recent interview.

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For those feeling the pinch, Orman offers four essential steps to help mitigate these rising costs and regain some control over their financial situation.               

The first thing Orman suggests is reconsidering whether you need a car. “You might want to consider how many cars, if any, you and your household need,” she says. Of course, this might sound extreme to some, but it's a practical consideration. 

Orman explains that owning fewer vehicles saves on insurance and reduces maintenance, fuel, and other associated costs. "With the savings," she adds, "you might be able to pay off some debt and put it toward emergency savings." Downsizing the number of cars in a household can be a financially savvy move, particularly when every penny counts.

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Orman reminds consumers to shop hard for the best insurance deal. It may be easier to show some loyalty to your current insurer, but it's not always the most cost-effective option. “You could start with your current insurer and ensure you’re taking advantage of all savings opportunities,” Orman says. 

She urges consumers to look beyond the obvious. “Many professional and trade associations, alumni groups, and even fraternity and sorority associations often negotiate discounts with insurers,” she points out, citing NBC News as a source. Sometimes, the discounts can be significant, and consumers often miss them. It’s a step that requires some effort, but Orman insists that the potential savings make it worthwhile.

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The third tip from Orman is to raise your deductible if you have enough emergency money squirreled away to handle it. "A higher deductible will reduce your premium costs," she explains. 

That may sound controversial because you’ll pay more out of pocket in case of an accident, but for people with an excellent financial cushion, this is a good way to lower your monthly expenses. Orman emphasizes that this decision should be made carefully based on your overall financial situation and whether you can afford to pay a higher deductible if you have to.

Lastly, Orman recommends shrewdness before buying a brand-new car. While it's easy to be enchanted by a shiny new vehicle, Orman warns that the insurance prices for different models differ significantly. “It’s not just that a more expensive car will generally have a higher premium price than a less expensive car,” Orman cautions. She explains that factors like repair costs for specific models and a car's popularity among thieves can also increase insurance premiums.

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