In this guide

The most reliable ways to lower your car insurance premium are to compare quotes from several insurers, ask about every discount you might qualify for, choose a higher deductible you can afford, and review whether you still need every coverage on an older car. Keeping a clean driving record and keeping your policy details up to date also matter. None of these guarantees a lower price, but each one could help. Here's how each works.

Key takeaways

  • Prices for the same driver and car can differ between insurers, so comparing quotes is often the single most useful step.
  • Common discounts include multi-car, bundling, good student, driver training, safety and anti-theft features, and low mileage.
  • A higher deductible usually lowers your premium, but you'll pay more out of pocket if you file a claim.
  • On an older car, collision and comprehensive may cost more than they're likely to pay out.
  • Be careful about cutting liability coverage just to save money. It protects your savings and assets.

Compare quotes from several insurers

Every insurer uses its own formula to set prices. The National Association of Insurance Commissioners (NAIC) notes that prices vary from company to company. The Insurance Information Institute (Triple-I) suggests getting at least three quotes.

To make a fair comparison, ask each company to quote the same coverages, limits, and deductibles. Otherwise, a lower price may simply reflect less protection.

Price isn't everything. The NAIC and Triple-I both suggest looking at an insurer's service, claims reputation, and financial strength. Triple-I points to rating agencies like AM Best and Standard & Poor's for financial strength ratings, and your state insurance department may publish complaint data.

Tip: A good time to compare is a few weeks before your policy renews, or after a big life change like moving, buying a car, or adding a driver. If you decide to change companies, our guide on how to switch car insurance without a coverage gap walks you through it.

Ask about every discount

Many drivers qualify for discounts they never ask about. Insurers don't all offer the same ones, and availability varies by state. Based on lists from the NAIC, Triple-I, and the Texas Department of Insurance, common discounts include:

  • Multi-car – insuring two or more vehicles on one policy
  • Multi-policy or bundling – buying auto and home or renters insurance from the same company
  • Good student – for young drivers with good grades
  • Driver training or defensive driving – for completing an approved course
  • Student away at school – for a college student who lives away from home without a car
  • Safety equipment – such as airbags and anti-lock brakes
  • Anti-theft devices – such as alarms or tracking systems
  • Claim-free or accident-free – for going several years without accidents or moving violations
  • Low mileage – for driving fewer miles than average
  • Long-time customer – offered by some insurers
  • Mature driver – offered by some insurers to older drivers, sometimes tied to a course
  • Group or affinity – through some employers, alumni groups, or professional associations

The NAIC notes that discounts usually appear on your declarations page and are already built into the premium shown. Check that page to make sure every discount you qualify for is listed.

Triple-I adds an important point: the final price matters more than the number of discounts. A company with fewer discounts could still have a lower overall price. Bundling, for example, often helps, but not always. Our guide to bundling home and auto insurance covers the pros and cons.

Raise your deductible

Your deductible is what you pay out of pocket on a collision or comprehensive claim before your insurer pays the rest. A higher deductible shifts more risk to you, so the premium for those coverages is usually lower.

Triple-I estimates that raising your deductible from $200 to $500 could reduce collision and comprehensive costs by 15% to 30%, and going to a $1,000 deductible could save 40% or more. Actual results depend on your insurer, car, and state, and these savings apply only to the collision and comprehensive part of your premium.

Watch out: Only choose a deductible you could pay right away if your car were damaged tomorrow. If you have a loan or lease, check your contract too, since some set a maximum deductible.

Review coverage on an older car

Collision and comprehensive pay up to your car's actual cash value, which drops as the car ages. At some point, the yearly cost of those coverages may not make sense compared with what they would pay.

Triple-I offers a rule of thumb: consider dropping collision and/or comprehensive if your car is worth less than 10 times the annual premium for that coverage. You can estimate your car's value using pricing guides, dealers, or your bank.

Before you drop either coverage, ask yourself whether you could afford to repair or replace the car on your own. If you still owe money on the car, your lender will likely require both. We go deeper on this decision in full coverage vs. liability-only car insurance.

Keep a clean driving record

Triple-I calls a good driving record one of the best ways to keep insurance costs down. At-fault accidents and serious traffic violations often raise premiums, sometimes for several years.

You can't erase the past, but you can ask your insurer how long a specific accident or ticket will affect your price. Some insurers may offer a discount for completing a defensive driving course, depending on your state.

Drive less, or try usage-based insurance

How much you drive affects your risk. Triple-I notes that some insurers offer discounts to drivers who put fewer miles on their car than average, including people who carpool.

Many insurers also offer usage-based insurance, sometimes called telematics. The Washington State Office of the Insurance Commissioner explains that these programs use a phone app or a device to track things like mileage, time of day, hard braking, and fast acceleration.

Careful, low-mileage drivers may benefit. But there are trade-offs to consider:

  • Your premium may go up or down depending on how you drive.
  • You'll be sharing location and driving data with your insurer.
  • Program rules differ between insurers, so ask how the data is used, including for claims.

Understand how credit can affect your rate

In many states, insurers use a credit-based insurance score as one rating factor. Triple-I says paying bills on time, keeping balances low, avoiding unneeded new credit, and correcting errors on your credit report may help over time.

Not every state allows this. A few states, including California, Hawaii, and Massachusetts, ban or restrict the use of credit in auto insurance pricing. Learn more in our guide on how your credit affects car insurance rates.

Think about insurance before you buy a car

The car you drive has a big effect on your premium. Triple-I and the NAIC note that cars that cost more, are more expensive to repair, are stolen more often, or have weaker safety records often cost more to insure.

Before you buy, get insurance quotes on the specific models you're considering. The difference could affect which car fits your budget.

Keep your policy accurate and current

Your price is based on the information on your policy. The NAIC suggests checking your declarations page for errors in your address, where the car is parked, vehicle details, and listed drivers. Tell your insurer when something changes, such as:

  • You move, or you start parking in a garage
  • Your commute gets shorter or you start working from home
  • A driver moves out or no longer uses your car
  • You sell a car or pay off a car loan

Changes like these could lower your premium, but they can also raise it. Either way, accurate information helps avoid problems if you ever file a claim.

Cuts to think twice about

Some ways to save money can leave you exposed to much bigger costs later.

  • Dropping to state minimum liability limits. If you cause a serious accident, costs above your limits could fall on you personally. Triple-I suggests carrying more than the minimum if you have assets to protect.
  • Letting your coverage lapse. Driving uninsured is illegal in nearly every state. A gap in coverage can also lead to higher prices later.
  • Leaving out drivers. Not listing a household driver to save money could create claim problems. Ask your insurer how it handles household drivers.
  • Dropping uninsured motorist coverage. Where it's optional, it can protect you if the other driver can't pay.

Good to know: If you're unsure whether a change makes sense for you, a licensed agent or your state insurance department can help explain your options.

Frequently asked questions

How often should I compare car insurance quotes?

Many people compare at each renewal or at least once a year. It's also worth comparing after major changes, like moving, buying a car, adding a teen driver, or a change in your driving record.

Does paying my premium in full save money?

Some insurers charge installment fees or offer a discount for paying in full or setting up automatic payments. Ask your insurer what applies to you.

Is it cheaper to add a teen to my policy or get them their own?

The Texas Department of Insurance notes that adding a teen to a family policy is usually cheaper than buying a separate policy. Good student and driver training discounts may also help.

Will usage-based insurance always lower my premium?

No. Depending on the program and how you drive, your premium may go down, stay the same, or go up. Ask how the program works before you enroll.

Should I drop collision coverage to save money?

It depends on your car's value, your savings, and whether you have a loan or lease. Triple-I's rule of thumb is to consider dropping it if the car is worth less than 10 times the annual premium for the coverage.

Sources

General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.