The cost of auto insurance across the board has risen significantly over the past few years, putting car owners around the world at a disadvantage. Whether you want simple liability coverage or a full range of bells and whistles, there are ways to save money on your auto insurance premiums. If you’re wondering how to save money on your auto insurance premiums, Bankrate’s team of insurance editors has put together some easy tips to help you.
How to Lower Your Car Insurance Premiums
When thinking about the cost of owning a car, many people first consider the list price and gas prices, but car insurance costs are also important. Depending on your situation, this could end up costing you more than you expected, especially if premiums continue to rise. Finding the best insurance company for your profile is the first step to lowering your car insurance premiums, but there are other things you can do to make car insurance more affordable.
1. Do some research
The average cost of car insurance is $2,314 per year for full coverage car insurance and $644 per year for minimum coverage. Car insurance rates are on the rise, and drivers may see higher premiums in the near future.
But that doesn’t mean you can’t do anything about the high cost of car insurance. Each car insurance company has its own way of calculating rates, and personal evaluation factors play a major role, so you won’t know how much car insurance will cost with other insurance companies unless you ask for quotes. Comparing quotes can be invaluable in determining which car insurance company offers the best rate for the coverage you want, and it could reveal that you’re overpaying for coverage.
Switching insurers may be an easy way to get the cheapest rates. The table below shows the nation’s largest insurers by market share and their average quoted premiums as of 2024, based on data from Quadrant Information Services, and how they compare to the national average.
| State Farm | $2,364 | $197 |
| Geico | $1,741 | $145 |
| progressive | $1,988 | $166 |
| Allstate | $2,971 | $248 |
| America | $1,695 | $141 |
2. Take advantage of discounts
Another surefire strategy if you need to know how to lower your car insurance premiums is to look into discounts. Companies usually offer several discount opportunities to help you save on your premiums, and many of them can be combined to get even bigger discounts.
The most common auto insurance discounts fall into a few general categories.
- Bundle discount: Most insurance companies that offer auto insurance also sell homeowners insurance, and you’ll usually get a discount on both if you buy both products from the same insurer. You may also get a bundling discount with renters, life or motorcycle insurance, or a multi-vehicle discount if you insure more than one vehicle.
- Safety Discount: Insurance companies typically offer discounts to drivers who have proven safe driving. In some cases, you may qualify for a safe driving discount by going accident-free for a certain number of years, completing a safe driving course, or reducing your annual mileage. Many insurance companies also offer telematics programs that use GPS technology to track your driving habits over a short period of time, which can help you qualify for a safe driving discount more quickly.
- Student discounts: College students often pay higher insurance premiums, but they may be able to pay less if they get good grades or commute to school without a car.
- Payment Discount: If you pay your premium in full or set up automatic payments, you may be able to get a small discount on your rates.
- Affiliate Discount: Some companies, like Geico, offer auto insurance discounts to members of certain professional or alumni associations. Check with the organizations you belong to to see if they qualify for a discount on your auto insurance.
3. Don’t pay for coverage you don’t need
When thinking about how to save money on your car insurance, removing coverage you don’t need can be a simple solution. For example, maybe you only had one car when you first got your policy and it included rental car coverage, but now you have two. Or, if you subscribe to another service that provides roadside assistance, you don’t need that service on your car insurance. Checking your policy for duplicate coverage or coverage you no longer need is one way to cut costs.
Another important decision is whether to choose full coverage or liability-only insurance. Most insurance experts recommend full coverage if you can’t afford to replace your car out of pocket, and your lender may require it if you don’t own the car outright yet. However, for older vehicles, the cost of full coverage can quickly exceed the total value of the car. If you have an older, less valuable car, we recommend running the numbers on a full coverage quote before continuing to pay the premiums.
However, before switching to liability-only insurance, it may be helpful to research car values and average repair costs in your area to see if you can make the repairs yourself. Keep in mind that you can use the other suggestions we’ve presented here to realize savings on full coverage. You can also speak to a qualified insurance agent to determine the amount of coverage that’s right for you.
4. Consider mileage-based insurance
You may have heard of mileage insurance, a type of usage-based insurance where your premiums depend on how far you drive. If you commute to work or drive infrequently, consider mileage insurance. Insurance companies typically assume that you drive less and therefore have a lower risk of getting into an accident. Therefore, you may be rewarded with lower premiums.
5. Increase your deductible
Some auto insurance policies include a deductible (the amount you pay before any compensation is applied). This applies to collision and comprehensive coverage, which make up a full coverage policy. Liability insurance does not include a deductible. You can choose your deductible when buying insurance; common options are $500 or $1,000. A higher deductible will likely result in lower premiums, but be careful not to choose a deductible that will make it difficult to pay if a claim occurs.
6. Increase your credibility
Insurance companies often base premiums on your credit score, except in states where they are prohibited from using credit scores in calculating premiums. That said, in most states, people with good credit scores typically get lower auto insurance rates.
If your creditworthiness has room for improvement, consider taking the time to improve your credit score. It will take time to significantly improve your creditworthiness, but by paying off your debts, creating a monthly budget so you can keep track of your bills, and making payments on time, you can significantly reduce your insurance costs.
Average annual cost of full-coverage car insurance by credit score
7. Review your policies before updating
Regularly reviewing your auto insurance policy can not only help you save money on your car insurance premiums, but it can also help ensure that the coverage you choose meets your current needs. Any major changes in your life, like getting married, moving, or changing your commute route, should prompt you to review your auto insurance policy to make sure it still reflects your current lifestyle.
It’s a good idea to review your policy closely once a year, or at each renewal, to see if there are any areas where you can save more. You can also request free quotes from other insurers at the same time to see if it’s worth considering switching companies.
How to Find Cheap Car Insurance Companies
Here’s what you need to know to do exactly that and decide on the best car insurance company for you.
- When collecting quotes, make sure you compare them on an apples-to-apples basis, making sure each insurer offers the same liability limits and coverage options so you can make an informed decision about the cheapest option that best suits your needs.
- If you add optional coverage, make sure you only add what you need. Working with an agency can help ensure you get the coverage you need.
Other factors to consider include mobile app accessibility, financial strength ratings, etc. Good customer service, easy-to-use policy management tools, and fast claims payments will make for a positive experience. Taking these factors into account along with price will help you decide which option best suits your preferences and needs.
FAQ
Methodology
Bankrate uses Quadrant Information Services to analyze April 2024 rates for every zip code and insurer in all 50 states and Washington, D.C. Rates are weighted based on population density in each area. Estimated rates are based on a 40-year-old male and female solo driver with a no-accident record, good credit, and the following full coverage limits:
- $100,000 bodily injury liability per person
- Bodily injury liability of $300,000 per accident
- Property damage liability of $50,000 per accident
- $100,000 per person in bodily injury claims caused by uninsured motorists
- Uninsured motorist bodily injury compensation of $300,000 per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine the minimum coverage limits, Bankrate used the minimum coverage that meets each state’s requirements: Our base profile driver owns a 2022 Toyota Camry, commutes to work five days a week, and drives 12,000 miles per year.
These are sample rates and should be used for comparison purposes only.
Credit-Based Insurance Score: The rates were calculated based on the insurance credit tier that the driver was assigned: “Poor, Average, Good (Basic), Excellent.” Insurance credit tiers take into account your official credit score, but they don’t rely solely on that variable. Four states — California, Hawaii, Massachusetts, and Michigan — prohibit or limit the use of credit as an assessment factor in determining auto insurance rates.
