How to Lower Car Insurance Premiums

Car insurance is an expensive — and mostly inevitable — aspect to owning a car. And, unfortunately, the costs are only rising: Car insurance prices have been increasing faster than nearly any other common expense.
If your premium seems high, it could be due to something you can’t easily change, like your age or where you live. However, other factors, like your deductible, coverage levels and credit score, are more within your control. Making the right choices on them could help you save money on auto insurance bills.
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12 tips to save on car insurance
Here are 12 ways to lower your auto insurance costs. Many of these suggestions take some time and work, but you’ll be repaid with lower annual premiums, perhaps for years to come.
1. Obtain multiple quotes
Like other types of financial products, one of the best ways to save money on car insurance is to compare offers from multiple companies. If you request several quotes, there’s a good shot you’ll find an option to save you a fair chunk of change by switching car insurance companies.
You can shop around for the best car insurance by directly contacting insurance companies — either online or over the phone — or by working with an independent insurance agent or broker who can round up options for you.
Large insurance carriers offer online tools that provide estimates of how much you can expect to pay, depending on the coverage limits you’ve selected. Keep in mind that these tools are only estimates, and may not paint a precise picture of what you’ll actually pay in the end.
To receive an exact rate quote, you will be required to provide some personal information, including your driver’s license number and the car’s vehicle identification number, also known as the VIN.
If contacting multiple insurers and comparing their rates seems intimidating, two shortcut alternatives can minimize that hassle:
The first is to have an independent insurance agent or broker compare auto insurance rates from a number of providers for you.
The second option is to use an online insurance marketplace or comparison site that allows you to gather information on multiple policies at once.
Ideally, you should also read online reviews for insurance companies you may be considering. And it can be valuable to ask friends or family for suggestions on insurers that have worked well for them in the past.
2. Bundle your insurance policies
You can save money by buying auto insurance from a company with which you already have other types of insurance, such as home insurance. You might also be able to bundle your car insurance with renters insurance, life insurance or pet insurance.
The wording varies by insurance provider, but bundling discounts are often referred to as multi-policy, multi-product or multi-line discounts.

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3. Increase your deductible
Your car insurance deductible is the amount you pay out of pocket before the insurance company covers the remaining cost of a claim.
A good rule of thumb is to select the largest deductible amount you can comfortably afford if you’re in an accident. The larger the amount you select, the lower the premium you’ll pay.
The savings can be substantial. For example, increasing your deductible amount, especially if it’s currently very low, can save you $250 or more over six months for a comprehensive policy, as illustrated by these price examples from Progressive.
Changing your deductible can be as easy as making a call to your insurer or agent. Depending on your insurance provider, you may also be able to update your policy and shift to a higher deductible online.
4. Check your coverage
There are several types of auto insurance, and you may be able to save money by selecting the appropriate level of coverage for your needs. Liability insurance covers damage to another driver’s vehicle and their injuries, while collision insurance covers your vehicle in the event of an accident after you pay a deductible. Comprehensive insurance covers your car in the case of car theft and damage from inclement weather, fire, vandalism, falling objects or collisions with animals after you meet a deductible.
In some states, you may also be required to add a deductible for personal injury protection or uninsured/underinsured motorist property damage.
If you’re looking for cheaper car insurance, you may be able to save money with a liability-only policy. However, the cheapest option comes with the most risk — forgoing collision coverage on your vehicle is usually only advisable if you own an inexpensive car that you could afford to replace yourself.
5. Consider usage-based insurance
Since the advent of telematics — technology that allows auto insurers to price policies based on how much and how safely a person drives — most leading carriers have created usage-based car insurance programs that can save you money on your premiums.
While traditional car insurance policies are priced based in part on an estimate of the number of miles you’d be driving, telematics uses a record of your actual driving habits to determine that component of your premium.
Some programs also capture the quality of your driving — how fast you typically drive and accelerate and decelerate, as examples — and factor that data into your premium.
Simply trying out telematics should earn you some savings. The trials can earn you a one-time discount or even a cash payment in exchange for using a smartphone app or monitoring device that records your driving.
After the trial phase, you could save money consistently by opting into a usage-based car insurance program (assuming you drive responsibly and log fairly low mileage). Critics of telematics programs, though, warn you’re trading privacy to save money — and many worry that the savings might never become a reality.
6. Improve your credit score
Your credit score may not appear to have much to do with driving. But industry groups like the Insurance Information Institute argue that, “How a person manages their financial affairs can be a good predictor of their likelihood to file insurance claims.” For this reason, people with lower credit scores tend to pay higher car insurance rates.
The use of your credit history as a factor in determining premiums has been criticized by some consumer advocates, and is banned in some states, including California, Massachusetts and Hawaii. In other jurisdictions, however, how well you pay your bills and other credit factors are likely to affect your car insurance costs, even if you have an impeccable driving record.
If you’re looking to lower your car insurance rate but your credit score is lower than ideal, you can take steps to improve it. Begin by looking at your credit reports and checking for incorrect items or inconsistencies that may be affecting your score. You can try to remove items from your credit report by filing a dispute with the credit reporting agency or with the business that submitted the information.
While improvements in your financial record may not immediately affect your insurance rate, it’s likely that your premiums will eventually decrease as your credit score increases.

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7. Claim anti-theft discounts
Depending on your insurance company, you may be eligible for a discount if your car has an anti-theft system. These discounts tend to be small, especially now that most new cars ship with anti-theft systems. But some insurers still claim to offer significant savings to customers with anti-theft systems. Geico, for instance, advertises savings of up to 23% on comprehensive insurance.
If you own an older vehicle that lacks anti-theft features, you should ask your insurance company if there’s anything you could install that would qualify you for a discount.
(Note: Discounts mentioned in this article may not be available from all insurance companies or in all states. Furthermore, the Insurance Information Institute recommends focusing on the final price of your coverage, rather than on overall discounts. A company may offer fewer discounts, yet still provide a lower price.)
8. Be a safe driver
Having multiple accidents and traffic tickets can raise your car insurance premium. By staying mindful on the road, you can avoid the accidents and moving violations that will negatively impact your driving record — and, in turn, raise the insurance rate you pay.
9. Take a defensive driving course
Ask your car insurance company if it offers any discounts for completing an accredited defensive driving course. Each state has different requirements for these, so check with your insurer to see which ones are approved in your jurisdiction — and to confirm that investing in a course will translate into savings. Many such classes can now be taken online.
If you’ve recently received a ticket for a moving violation, you may be able to get the ticket dismissed by taking a driving safety or defensive driving course. In other cases, taking some form of “driver’s ed” may even allow you to get some points taken off your license.
10. Switch to a smaller, cheaper vehicle
If you need a new car, make the cost of car insurance for your new wheels one of your buying criteria. Insurance premium costs will vary depending on the car’s size and price, along with the model’s incidence of claims and repair costs compared to other vehicles.
Insuring a large luxury SUV will generally cost much more than covering a smaller and more affordable vehicle. Honda’s smaller SUVs, for example, often rank among the cheapest cars to insure. Insurance for larger cars tends to be more expensive because they’re more costly for insurers to replace. Due to their weight, bigger vehicles also tend to cause greater damage to other cars and property when they crash.
11. Claim a pay-in-full discount
Several large auto insurance providers will give you a discount if you pay your full 6- or 12-month premium up front as opposed to on a monthly basis. This type of discount could save you about 5% on insurance premiums.
12. Get car insurance through a family policy
Teenagers and other new drivers can be added as covered drivers on existing family policies, and this will increase your costs since young drivers are among the most expensive drivers to insure.
That’s why it’s important to look for any discounts available for teen drivers, which can help offset what is likely to be a considerable increase in your overall premium. As with older drivers, ask about discounts for young people on your policy who are prepared to take defensive driving or driver’s ed courses. You may also qualify for a multi-car discount if your child drives a separate car or a good student discount if your child maintains a certain GPA in high school or college.

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How much does car insurance cost?
The average annual cost of car insurance for one vehicle is more than $1,700, according to a 2023 study from AAA.
Insurance costs vary significantly, however, based on factors including where you live, the type of vehicle you own and your driving record. In 2023, prices for car insurance rose faster than prices for any other major expenditure tracked by the consumer price index (CPI).

When to ask about lowering car insurance costs
You can approach your insurance company, agent or broker at any time about cost-saving measures; you don’t have to wait until your policy is expiring to make changes to your coverage.
If your driving record or credit score has improved, ask if you’re eligible for a lower premium. Every time your policy is up for renewal, review the notice from your insurance company to understand how your premium is changing. If the price is higher, you can try to call and negotiate, or look into taking your business to another company and canceling your existing car insurance coverage.
It’s a good idea to shop around for car insurance roughly once per year.

The bottom line on lowering your car insurance premium
Here’s a summary of the best strategies to cut down on what you pay for your car insurance policy. You can use one or more of these tips to get the lowest possible car insurance rates:
Shop around: Insurance carriers differ in how they use pricing algorithms, and in the customers they want, so comparison shopping is one of the best ways to save.
Most companies offer car insurance discounts to those who purchase multiple policies or types of coverage, so consider buying car insurance from the same carrier that sold you your homeowners or renters insurance policy.
Opt for a higher deductible if you’re comfortable with the risk and can afford it — taking this step is certain to lower your premium.
If you’re a good driver and/or don’t drive often, consider a usage-based car insurance program that monitors your driving and rewards safe habits with lower costs.
Depending on your state, your credit history could influence your premium. Taking steps to improve your credit could help you lower your car insurance rate.
Be a responsible driver. There is no surer way to lower your car insurance premium than with safe driving. Taking a defensive driving course could also help you obtain additional discounts, and there are companies that focus on offering auto insurance for high-risk drivers.
Larger vehicles are more expensive to insure because they’re more expensive to replace. Switching to a smaller SUV, for example, can reduce the amount of money you pay for car insurance.

FAQs about car insurance premiumsWhy do car insurance premiums differ from one person to another?Car insurance policies are priced partially based on your accident risk, which means that factors including your driving record, age, experience and annual mileage come into play. The cost of your insurance also obviously depends on the type of vehicle you drive and policy options like the level of coverage and the deductible amount. Some drivers will qualify for special discounts that can significantly lower their premiums. How much can I save by bundling my insurance policies?The amount you can save will depend on what insurance you’re combining, your location and insurer, but some companies cite discounts of up to 25%. The most common bundles include home and auto insurance or renters and auto insurance.

Bundling isn’t always a good idea. If your auto insurance encourages you to bundle with renters insurance, for example, do some research to see how the price of your current renters insurance stacks up to the offer. Don’t cancel good insurance just for the convenience of bundling.
How much can I save by increasing my deductible?If your deductible is currently set at a very low amount like $100, you might be able to save $250 or more on comprehensive insurance over a six month coverage period by opting for a higher deductible of $1,000 or $2,000. The key question is if you have enough savings set aside to cover the higher deductible in case you need to make a claim.
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