Don’t overpay! Suze Orman reveals 4 key steps to combat skyrocketing car insurance premiums – here’s what you need to do now

With the cost of living rising, car insurance premiums are exploding, putting a huge burden on many car owners. Premiums have skyrocketed for the third year in a row. Financial expert Suze Orman revealed that the average annual cost is now almost 50 percent higher than it was in the summer of 2021.

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Gone are the days when car insurance was just a boring household expense. Today, it’s one of the biggest items in your budget, and Orman says you need to be careful — and strategic — about how you pay for it.

“The reality is that auto insurance has become so expensive that it has gone from being one of those costs that you just swallow as a necessary household expense to being a major budget hit that deserves your strategic attention to (safely) minimize your costs,” Orman explained in a recent interview.

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For those feeling the pinch of the crisis, Orman suggests four basic steps to mitigate rising costs and regain some control over their financial situation.

First, Orman suggests rethinking whether you need a car at all. “You should consider how many cars you and your household need, if any,” she says. Of course, that may sound extreme to some, but it’s a practical consideration.

Orman explains that owning fewer vehicles saves on insurance costs and reduces the cost of maintenance, fuel and other related expenses. “With the savings,” she adds, “you may be able to pay off some debt and put the money aside for emergencies.” Reducing the number of cars in a household can be a financially smart move, especially when every penny counts.

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Orman reminds consumers to shop around for the best insurance deal. It may be easier to stay loyal to your current insurer, but that’s not always the most cost-effective option. “You could start with your current insurer and make sure you take advantage of all the savings opportunities,” Orman says.

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

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Orman’s third tip is to increase your deductible if you have enough money set aside for emergencies. “A higher deductible reduces your premium costs,” she explains.

This may sound controversial because you’ll have to pay more out of pocket in the event of an accident, but for people with an excellent financial cushion, it’s a great way to reduce their monthly expenses. Orman stresses that this decision should be made carefully, based on your overall financial situation and whether you can afford to pay a higher deductible in the event of an emergency.

Finally, Orman recommends being cautious when purchasing a new car. While it’s easy to be enchanted by a shiny new vehicle, Orman warns that insurance prices vary considerably for different models. “It’s not just that a more expensive car will generally have a higher premium price than a less expensive car,” Orman warns. She explains that factors such as repair costs for certain models and a car’s popularity with thieves can also increase insurance rates.

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