Finding affordable car insurance is not always easy, especially with the constant increase in cost. Between 2023 and 2025, the national average for full coverage car insurance has increased by a staggering 31 percent, outpacing inflation and household income growth. This can feel like an uphill battle for many drivers who are simply trying to save money.
While there are many factors that influence the pricing of an insurance policy, some are beyond your control—like location, vehicle parts, and labor costs. However, there are still ways to make it cheaper by understanding the elements you can control and optimizing them to get the best rates. By doing this, you can take charge of your car insurance costs and avoid being overwhelmed by the rising cost.
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How You Can Lower Your Car Insurance Cost
Lowering your car insurance cost might seem complicated at first, but with the right strategies, you can make significant savings. Here’s a practical approach to help you manage your insurance premiums without compromising on coverage.
Shop Around
The average cost of car insurance can be pretty high, with $2,638 for full coverage and $767 for minimum coverage per year. But did you know that you could lower these costs by just shopping around? According to the 2024 J.D. Power U.S. Insurance Shopping Study, 49 percent of U.S. auto insurance customers compared quotes from different insurers, but only 29 percent actually switched their insurance provider.
This shows that many people miss out on potential savings by not comparing rates and coverage limits from various carriers. Every insurance company has its own way of calculating premiums based on individual rating factors. Always ask for a quote to see if you can save by switching.
Take Advantage of Discounts
Discount opportunities are one of the easiest ways to lower your car insurance cost. Many insurers offer multiple discounts on your policy. For example, multi-car and safe driving discounts are very common. Also, bundling your homeowners insurance, renters insurance, life insurance, or even motorcycle insurance with your car insurance could earn you a significant discount. Safety discounts are another great way to save. Safe drivers who stay accident-free or complete defensive driving courses could benefit from lower rates.
Additionally, telematics discounts offered by telematics programs use GPS technology to monitor your driving habits. If you’re a responsible driver, this could lower your premium even more. Don’t forget about student discounts—if you’re a college student with good grades, you could qualify for a cheaper rate. Finally, setting up auto-pay or affiliating with certain professional or alumni organizations, like Geico, can give you additional discounts.
Don’t Pay for Coverage You Don’t Need
Sometimes, the best way to save is to remove unnecessary coverage. Optional coverage like roadside assistance and rental reimbursement could be costing you extra if you already have these services through a program like AAA or your credit card company. Consider whether full coverage is necessary for your vehicle, especially if it’s an older vehicle or low-value vehicle.
For such cars, liability-only insurance might be a better, more affordable option. It’s always a good idea to research your car’s value and the repair costs in your area to make sure you’re not paying for more than what you need. Insurance professionals can guide you in making the right choices.
Increase Your Deductibles
A simple way to lower your premium is to increase your deductible. The deductible is the amount you pay out of pocket for repairs or replacement in case of a covered claim. By choosing a higher deductible, your insurance carrier will charge you a lower premium.
However, be cautious—make sure the new deductible amount is something you can comfortably afford in case of an accident. Collision and comprehensive coverage are often the types of coverage that apply to deductibles, but some states also include PIP (personal injury protection) and UMP (uninsured motorist property damage) in the mix.
Consider Pay-Per-Mile Insurance
If you don’t use your car much, consider pay-per-mile insurance. This usage-based insurance model charges you based on how much you drive, which means your premium will be much lower if you have a short commute or rarely drive. Insurance companies see lower mileage as a sign of lower risk, so they’re more likely to offer a lower insurance premium for low-mileage drivers.
Improve Your Credit
Did you know that your credit-based insurance scores can affect your premium? If you have excellent credit, you could pay less for cheaper auto insurance. On the other hand, those with poor credit may pay as much as 76 percent more for full coverage insurance.
Improving your credit score by paying off debts, sticking to a monthly budget, and making on-time payments can help reduce your insurance expenses in the long run. Even if improving your credit takes time, small steps can lead to big savings when it comes time to renew your car insurance.
Review Your Policy Before Renewal
Take a close look at your car insurance policy before it’s time for renewal. Sometimes, your needs change, and your coverage might not align with your current lifestyle. Whether you’ve had a life change, such as getting married, moving, or altering your commute, reviewing your policy ensures you’re not overpaying for coverage you don’t need. Also, don’t hesitate to ask for a few free quotes from other carriers to see if switching could save you money.
Read More: What Is Rental Reimbursement Auto Insurance?
Think Outside the Box
If you have a vehicle that’s only used seasonally, consider asking your insurance carrier if they offer a storage plan. This plan would allow you to remove almost all coverage from the vehicle, except for comprehensive coverage, while still keeping your multi-car discount. Just make sure the vehicle is properly stored and not driven until the coverage is reapplied.
Conclusion
Saving money on car insurance is possible by implementing several strategies. Shopping around for the best rates, bundling policies, and maintaining a clean driving record can all contribute to significant savings. Additionally, opting for higher deductibles, reducing coverage on older cars, and utilizing available discounts can help lower premiums. By being proactive and informed, you can ensure you’re getting the best value for your coverage without compromising on protection.