How to save on car insurance: 7 ways to lower your rate
Finding affordable car insurance can feel like an uphill battle. From 2023 to 2025, the national average cost of full coverage car insurance increased by 31 percent, drastically outpacing the rate of inflation and household income growth. Needless to say, drivers everywhere are looking for ways to save money. There are a lot of factors in play in terms of pricing an insurance policy. Many are out of your control, like location and the price of vehicle parts and labor. But the key to finding cheaper car insurance is understanding what you can control and optimizing these factors.
How you can lower your car insurance cost
The best place to start looking for cheaper car insurance is at the beginning, before you purchase your vehicle. The cost of owning a car adds up fast when you consider the additional cost of maintenance, gas and financing. Operating costs vary between vehicles, and so does car insurance. Getting quotes for several different types of vehicles before heading to the dealership can help you find which cars fit within your auto insurance budget.
Saving on car insurance doesn’t end when you sign on the dotted line. Below we outline 8 ways drivers may be able to cut down on their auto insurance costs with almost any car insurance company.
1. Shop around
The average cost of car insurance is $2,638 per year for full coverage car insurance and $767 per year for minimum coverage. According to J.D. Power’s 2024 U.S. Insurance Shopping Study, 49 percent of U.S. auto insurance customers shopped for coverage with a different carrier in the past year, but only 29 percent end up changing insurers. With auto premiums increasing nationwide, drivers are likely not finding the same level of savings they have in the past.
Even with elevated premiums, comparing car insurance rates and coverage limits among different carriers could help you save. Car insurance companies each have their own methods for calculating rates, and your own individual rating factors play a significant role, so you won’t know how much car insurance may cost with other carriers unless you request a quote.
Switching providers might be an easy way for you to get the best rate.
The table below showcases average premiums from some of the nation’s largest auto insurance companies, along with their insurance shopping score from J.D. Power. J.D. Power’s customer satisfaction ranking is based on a 1,000-point scale with a study average of 676.
| Carrier | Avg. annual full coverage premium | Avg. annual minimum coverage premium | J.D. Power Shopping Study |
|---|---|---|---|
| State Farm | $2,887 | $911 | 695/1,000 |
| Progressive | $2,388 | $711 | 678/1,000 |
| Geico | $2,173 | $569 | 656/1,000 |
| Allstate | $3,297 | $917 | 664/1,000 |
| USAA | $1,897 | $604 | 711/1,000 |
| Farmers | $3,375 | $1,085 | 667/1,000 |
| American Family | $2,826 | $910 | 702/1,000 |
| Travelers | $2,192 | $585 | 680/1,000 |
2. Take advantage of discounts
Taking advantage of discount opportunities is another solid strategy that can help lower the cost of car insurance. Most insurers offer several types of discounts, and many are applied to your policy automatically when you qualify for them, like multi-car and safe driving discounts. Others require you to take action. Being proactive and inquiring about discounts can help you discover new ways to save, as Bankrate editor Natasha Cornelius learned when she tried telematics for the first time.
I like the savings I receive by using State Farm's Drive Safe & Save program. It also makes me more conscious of my driving habits because I'm competitive with myself and want a consistently good score.— Natasha Cornelius, CLU, Bankrate editor
The most common car insurance discounts fall into a few general categories:
- Bundling discounts: Most insurers that offer auto insurance also sell homeowners insurance — and if you purchase both products from the same insurer, you’re typically granted a discounted rate on both policies. You may also be eligible for bundling discounts with a renters, life or motorcycle insurance policy, as well as multi-car discounts if you’re insuring more than one vehicle.
- Safety discounts: Insurers typically reward proven safe drivers with discounts. In some cases, you can qualify for a safe driving discount by staying accident-free for a certain number of years, completing a defensive driving course or reducing your annual mileage.
- Telematics discounts: Many insurers offer telematics programs, which offer an initial discount at sign-up and can potentially lower the rate even more if your carrier deems your driving habits as safe. Telematics programs track your driving over time via GPS technology. However, it is important to know that some carriers may increase your rate if they detect poor driving habits.
- Student discounts: College students often pay high insurance rates, but good grades and heading to school without a car could reduce the cost of coverage.
- Payment discounts: Paying your premium in full or even setting up auto-pay could qualify you for a small discount on your rate.
- Affiliation discounts: Some companies, such as Geico, offer discounted car insurance rates to members of certain professional and alumni organizations. Check with any organizations you’re part of to see if there’s a car insurance discount available to you.
3. Don’t pay for coverage you don’t need
Removing extra coverage from your auto policy may help you lower rates, but should be done with caution. You will want to make sure you don’t remove coverage that could put your financial future in jeopardy. It is a good idea to reach out to your agent ahead of time if you are considering making major changes to your policy.
First, start with optional coverage types like roadside assistance and rental reimbursement coverage. While these types of coverage can be immensely helpful, you may be paying for duplicate coverage if you also have these benefits with a membership program like AAA or through a credit card company. Or maybe you now work from home and could make do without a rental car if your vehicle is being repaired following a covered claim.
Another important decision could be choosing between full coverage and liability-only insurance. Most insurance professionals recommend keeping full coverage on your vehicle if you can’t afford to replace it out of pocket, and your lender may require that coverage if you don’t yet own the car outright.
But for older vehicles, the cost of full coverage insurance can exceed the car’s actual cash value at some point in time. If you own an older, low-value vehicle, you may find it helpful to research your car’s value and average repair costs in your area to see if you can afford repairs on your own. Below shows the price difference between full coverage insurance and minimum coverage insurance rates.
| Annual full coverage premium | Monthly full coverage premium | Annual minimum coverage premium | Monthly minimum coverage premium |
|---|---|---|---|
| $2,638 | $220 | $767 | $64 |
4. Increase your deductibles
Your car insurance deductible is the amount you pay to repair or replace your vehicle when it’s damaged in a covered claim. Your insurance carrier will pay the actual cash value of the vehicle minus the deductible. Deductibles typically apply to collision and comprehensive coverage, but some states include deductibles on personal injury protection (PIP) and uninsured motorist property damage coverage (UMPD).
A higher deductible is likely to result in a lower premium, but be careful that you don’t choose a limit that would be difficult for you to pay in the event of a claim.
5. Consider pay-per-mile insurance
You may have heard of pay-per-mile insurance, a form of usage-based insurance that bases your premium directly on how much you drive. Consider pay-per-mile insurance if you don’t have a commute or drive very often. Insurance companies typically consider you to be at lower risk of getting into an accident since you’re not on the road as much. As such, they might reward you with a lower insurance premium.
6. Improve your credit
Insurers use credit-based insurance scores to help price premiums, except in states where the use of credit to calculate rates is limited or banned. In most states, those with excellent credit usually receive cheaper auto insurance. On average, drivers with poor credit pay 76 percent more for full coverage insurance than drivers with good credit. While evidence does show that drivers with poor credit histories are more likely to file auto insurance claims, some industry experts argue that the use of credit disproportionately harms customers who are already systemically discriminated against within the financial system.
Credit plays a pivotal role in insurance, often serving as a gatekeeper to affordable coverage. However, reliance on credit scores can create unintended bias, disproportionately affecting communities with historically limited access to financial resources. Advocacy for equity in insurance demands rethinking how credit is used, ensuring that risk assessments reflect fairness and inclusivity.— Charles Morgan, Co-Founder of TrealScore
If your credit could use some work, consider taking time to improve your credit score. While significant credit boosts can take time, paying off debts, setting up a monthly budget to help track bills and making on-time payments can go a long way toward reducing your insurance expenses.
| Credit score | Average premium for full coverage car insurance | Percentage change |
|---|---|---|
| Excellent credit | $2,257 | -14% |
| Good credit | $2,638 | 0% |
| Average credit | $2,883 | +9% |
| Poor credit | $4,644 | +76% |
7. Review your policy before renewal
Periodically reviewing your car insurance policy can help ensure you’re saving on car insurance, but also that your selected coverage meets your current needs. If you’ve had any major life changes, like getting married, moving to a new location or changing your commute, your car insurance policy could use a review to ensure it reflects your current lifestyle.
It’s a good idea to take a close look at your policy once a year or whenever it is up for renewal to see if there are additional savings you can take advantage of. You may also want to ask for a few free quotes from other carriers at the same time to see if it would be worth your while to consider switching to another company.
8. Think outside the box
If you have exhausted all other options, it may be time to get creative. If you have a vehicle on your policy that is only used seasonally, ask your carrier if they offer a storage plan. This would allow you to remove all the coverage from the vehicle except comprehensive coverage while keeping your multi-car discount. Please note that this solution should only be used if the vehicle is stored and not driven until coverage is applied back to the car.
Can you carpool to work or join a park-and-ride service? Lower annual mileage could reduce your premium. If you live with family members, it may be cheaper to put all the cars and drivers on one policy. Talking to your agent may help you find additional ways to cut insurance costs.
High auto rates aren’t just a concern for drivers, but for car insurance carriers as well. As they say, “necessity is the mother of invention” and leaders in the insurance industry are also looking to create ways to lower auto insurance. Not only are usage-based insurance policies gaining in popularity, but so are embedded insurance plans — insurance policies that are sold with the purchase of a vehicle, like Tesla or GM.
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Frequently asked questions
Methodology
Bankrate utilizes Quadrant Information Services to analyze January 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.
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