How to save on car insurance: 7 ways to lower your rate
Car insurance costs have seen huge increases across the board in the past few years, and vehicle owners everywhere are feeling the pinch. Whether you want a simple liability-only policy or prefer one with all the bells and whistles, there are ways you can save on your car insurance. If you want to know how to save money on auto insurance, Bankrate’s insurance editorial team has gathered some easy tips to help you out.
How you can lower your car insurance cost
While many people first consider sticker price and the price of gas when it comes to the cost of owning a car, car insurance rates matter too. Depending on your circumstances, it might be a larger cost than you were expecting, especially as rates continue to increase. While finding the best carrier for your profile is the first step to lowering your auto insurance rates, you can also do other things to help make your car insurance more affordable.
1. Shop around
The average cost of car insurance is $2,314 per year for full coverage car insurance and $644 per year for minimum coverage. With car insurance premiums on the rise, it’s likely drivers will soon see even higher premiums.
But that doesn’t mean there’s nothing you can do about the high cost of car insurance. 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. Quote comparisons can be highly useful in determining which car insurance company offers the best rate for your desired coverage and could make it clear that you’re paying too much for coverage.
Switching providers might be an easy way for you to get the best rate. The table below showcases the nation’s largest insurance companies according to market share, and their average quoted premiums as of 2024 based on data from Quadrant Information Services, to illustrate how they compare against the national average:
| Insurance company | Average annual full coverage premium | Average monthly full coverage premium |
|---|---|---|
| State Farm | $2,364 | $197 |
| Geico | $1,741 | $145 |
| Progressive | $1,988 | $166 |
| Allstate | $2,971 | $248 |
| USAA | $1,695 | $141 |
2. Take advantage of discounts
Another solid strategy when you need to know how to lower your auto insurance is to consider discounts. Companies typically offer several discount opportunities to save on insurance, many of which can be combined for even more significant discounts.
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. 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. Many insurers also offer telematics programs, which confer safe driving discounts more quickly by tracking driving habits over a short period via GPS technology.
- 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
When thinking about how to save on car insurance, removing coverage you don’t need can be a simple solution. For instance, you might have only had one car when you started your policy, and so you included rental car reimbursement, but now you have two. Or you might have another service that offers roadside assistance, so you won’t need it in your car insurance policy. Checking your policy to see where you might have duplicate or now-unnecessary coverage could be one way to cut down costs.
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 quickly exceed the car’s total value. If you own an older, low-value vehicle, you may want to do some math with full coverage quotes before continuing to pay for the coverage.
However, before switching to liability-only coverage, you may find it helpful to research your car’s value and average repair costs in your area to see if you could afford repairs on your own. Keep in mind that you can use our other suggestions here to earn full coverage savings. You can also speak with a licensed insurance agent to determine how much coverage is right for you.
| Annual full coverage premium | Monthly full coverage premium | Annual minimum coverage premium | Monthly minimum coverage premium |
|---|---|---|---|
| $2,314 | $193 | $644 | $54 |
4. 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.
5. Increase your deductibles
Some car insurance coverage includes a deductible — the amount you pay before your coverage kicks in. This applies to collision and comprehensive coverage, which is what makes up a full coverage policy; liability insurance does not include a deductible. You may choose your deductible amounts when you purchase your policy; common options include $500 or $1,000. A higher deductible is likely to result in a lower premium, but be careful that you don’t choose a deductible that would be difficult for you to pay in the event of a claim.
6. Improve your credit
Insurers often use a credit-based insurance score to help price premiums, except in states where the use of credit to calculate rates is banned. That said, in most states, those with excellent credit usually receive cheaper auto insurance.
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.
Average annual full coverage car insurance rates by credit score
| Poor | Good | Potential savings |
|---|---|---|
| $4,063 | $2,314 | $1,749 |
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.
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Compare auto insurance rates
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.
How to find a cheap car insurance company
Here’s what you need to know to do this accurately and to help determine the best car insurance company:
- When you are collecting quotes, be sure that you are doing an apples-to-apples comparison, with the same liability limits and coverage options from each carrier. That way, you can make an educated decision about the best — and cheapest — option for your needs.
- When adding optional coverage, be sure you are adding on just what you need. Working with an agent can help ensure you have the coverage you need.
Consider other factors, like mobile app accessibility, financial strength ratings and more. Good customer service, easy policy management tools and a quick claims payout can make for a positive experience. These factors — along with price — could help you decide which option is best suited to your preferences and needs.
Frequently asked questions
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Each driver has unique personal factors, including age, location and driving record. Because these factors in addition to others, like the make and model of the car you drive, influence the underwriting process and the final rate you pay, the best cheap car insurance provider will be different for everyone. To narrow down your list, consider which providers offer low rates on average in your area and how many discounts you would be eligible for with a particular policy.
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High-risk drivers may have a difficult time finding cheap car insurance. That’s because high-risk drivers may be more likely to cause expensive accidents, and insurance companies typically balance the risk with more expensive premiums. However, whether you’re a good driver or have a few marks on your record, the same strategy applies. Shopping around, being open to different carriers and requesting quotes may give you a better idea of how much your car insurance premium will be.
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Almost every state in the U.S. has a required minimum amount of insurance that you need to purchase to be on the road legally. Usually, this is liability insurance but may also include personal injury protection or uninsured motorist coverage. In addition, if you have a car loan or lease, you may be required to purchase full coverage insurance. Many insurance experts would recommend that you purchase more than the minimum amount of liability coverage so you are protected in the event that you are in a serious accident with high costs. If you are still unsure how much car insurance you need, consider working with an insurance agent.
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Switching to a new carrier could earn you a significant discount on your car insurance — but you may want to consider the trade-offs if the quotes you receive from other carriers aren’t much lower than your current rate. If you’re currently earning discounts from your insurer, check whether the same discounts are available from the other company and whether you’ll be eligible for them as a new customer. Take non-monetary benefits, like an agent you trust or a user-friendly app, into account as well; in some cases, it’s worth sticking with a slightly higher rate if you’re otherwise happy with your insurance provider.
Methodology
Bankrate utilizes Quadrant Information Services to analyze April 2024 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 2022 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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