How to Lower Your Car Insurance Rate: 12 Practical Tips
Car insurance costs more than $1,500 per year for the average driver, but it's easy to lower your car insurance rates.
For example, you could cut costs by as much as 10% if you switch to paperless bills or set up autopay. And you could see greater savings on your car insurance from bigger changes like improving your credit or trying usage-based insurance.
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1. Change how you pay your bill
The easiest way to lower your car insurance rate is to rethink how you pay your bill.
Most national insurance companies offer discounts for paying online, choosing paperless statements by email and signing up for automatic payments. You can also save by paying for an annual policy in full, instead of making monthly payments.
These car insurance discounts could save you as much as 10%, depending on the company. However, most insurance companies limit how much you can save with discounts, or only give sign-up discounts on your first six-month or 12-month bill.
Discount | Average annual savings |
|---|---|
| Autopay discount | 5%-10% |
| Paid-in-full discount | 5%-10% |
| Paperless discount | 5%-10% |
| Quote-in-advance discount | 3%-10% |
2. Find membership savings
Many car insurance companies offer 2% to 10% auto insurance savings for drivers who are members of certain organizations or work in specific professions.
Your job could also qualify you for a discount of up to 9% from auto insurance companies like Geico, Farmers, Liberty Mutual and Nationwide. You might get a discount if you're a teacher, nurse, emergency responder, military member or federal employee for instance.
Geico offers drivers a 3% discount to members of hundreds of professional and alumni organizations.
3. Only keep the coverage you need
Another easy way to save money on car insurance is to remove coverage you don't need or use.
For example, you might not need roadside assistance coverage on a brand-new car because a manufacturer's warranty usually covers this for the first three to five years.
If your car is worth less than a few thousand dollars or is more than 10 years old, consider dropping collision and comprehensive coverage, , which could cut your bill in half.
4. Raise your collision and comprehensive deductible
Going with a higher deductible for collision and comprehensive insurance is an easy money-saving tip if you can afford it. When you raise your deductible, you agree to pay more for car repairs after an at-fault accident or when filing a comprehensive claim. Insurance companies charge you less because of this.
Increasing your deductible from $50 to $1,000 could save you 56% on your comprehensive and collision coverage. And jumping from a $500 to $1,000 deductible could lower your bill by 25%.
Note that this option is best for drivers with a healthy emergency savings fund.
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5. Bundle your insurance
You can save between 5% and 18% on your insurance bill when you bundle your insurance policies with one company.
That can include auto, home, renters, condo, umbrella, life or health. If you bundle your homeowners and car insurance with the same company, you could save 15% off auto insurance and up to 35% on home insurance annually.
Along with bundling, you can also combine all your vehicles under the same policy and save up to 25% with a multi-vehicle policy discount. You can still customize the coverage for each vehicle, even if they're on the same policy.
6. Track your driving with telematics
Letting your insurance company track your driving could save you between 30% to 50% on your annual quotes if you don't drive a lot.
With telematics or usage-based insurance, a device or mobile app tracks your driving and gives you a discounted rate based on your driving ability and risk level.
7. Keep young drivers on a parent's policy
Having a young driver on their parents’ policy can lower the teen's total auto insurance costs by as much as 66%.
Adding a teen driver to a family policy will cost less overall than having a teen driver on their own policy. But if your teen has a history of accidents, claims or tickets, expect much higher insurance rates for either type of policy. It’s wise to explore prices for both options in this case.
8. Update your policy details
Check your car insurance policy and coverage details to make sure the information is correct.
Even small details like your car's trim level and safety features can affect your rate. For example, there could be a difference of as much as $1,950 a year between different Honda Civic types of the same model year, like the Civic LX or the Civic Sport Touring Hybrid.
Make sure you're getting any discounts that your insurance agent may have missed, like discounts for being a homeowner, being a student with good grades or having taken a defensive driving course.
Discount | How to get it |
|---|---|
| Good student | Maintain a 3.0 GPA or higher in high school or college. |
| Multi-car | Move insurance for all cars you own to the same insurance company. |
| Paperless billing | Sign up for paperless billing by logging into your account on your insurance company's website. |
| Pay in full | Pay the full year's premium upfront and ditch the monthly payments. |
| Automatic payments | Enroll in autopay through your bank or by logging into your account. |
You should also check your policy when your situation changes. For example, you could see slightly cheaper rates if you've built a carport or poured a new driveway and no longer park your car on the street.
9. Improve your credit score
Your credit score is one of the factors that can affect your car insurance rates.
Raising your credit score up to the next tier saves most drivers an average of 17% on their annual car insurance rates. You can see the biggest savings by improving your credit score from fair to good.
Try to pay down your existing debts if you can. If you use a credit card, try to pay off the balance in full each month and only borrow money you truly need from lenders when taking out a loan, even if they offer you more. You can also improve your credit score by paying your bills on time each month.
10. Buy a car that's cheaper to insure
If you're in the market for a new or used car, you could save money on car insurance by choosing a car that's cheaper to insure.
Insurance companies tend to offer lower rates for older cars, ones with enhanced safety features, and ones that cost less to repair or need fewer repairs. While shopping around, look at and see if any of the models meet your needs.
Buying a car that's cheaper to insure could help you save hundreds on your car insurance premiums each year.
11. Limit your claims
Filing claims with your insurance provider can trigger rate increases, especially if you file claims often or if your claims are for expensive repairs. When you can, limit the number of claims you file.
If your car is damaged and the cost of repairs is much higher than your deductible, file a claim. But if filing a claim gets you $75 after you pay your deductible, you might want to pay out of pocket to keep your premiums from going up. That claim will probably raise your rates by more than $75, so not filing a claim should save you money in the long run.
12. Compare car insurance quotes
Getting quotes from multiple companies is another easy way to find lower car insurance rates. Comparing quotes to find the cheapest policy can save you as much as 50% on your annual car insurance costs compared to average rates.
Insurance companies consider a number of factors when setting rates, meaning the cheapest company for you may vary depending on your driver profile. Your age, driving record and what car you drive all impact your auto rates. Comparing quotes is a great way to see which company can help you save the most.
Frequently asked questions
Should car insurance rates decrease every year?
It depends on what's changed for you in the last year. If you are a young driver, you can usually expect lower rates for each year of safe driving, as long as you maintain a clean driving record without tickets, accidents or claims. Once you reach your 30s, rates tend to drop until you hit age 60. At 60, some insurance companies increase your rates.
When is the best time to get car insurance?
It's a good idea to get new car insurance quotes after milestones like getting married, moving or turning 18, 21 or 25, since those changes can lower your rates. You may switch car insurance at any time without fees from most companies, as long as you don't have a lapse in coverage when you switch to your new policy.
Does my credit score impact my car insurance rates?
Your credit score can impact your car insurance rates a lot, depending on where you live. Lower scores usually mean higher insurance rates, while you should pay less with higher scores. Check your credit score and if it's lower than you'd like, try to improve it by using your credit responsibly. This means only borrowing what you need, paying down existing debt, making payments on time and paying at least the minimum payment each month.
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