Double-digit increases in car insurance rates are squeezing drivers as companies battle with higher payouts, increased litigation, and disaster-related losses. The March 2025 monthly consumer price index for motor vehicle insurance was up 11.8% from January 2025.
“The U.S. auto insurance industry generated a better performance in 2023, but still posted an underwriting loss for the third consecutive year,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute. “2023’s net written premium growth rate of 14.3% is the highest in over 15 years, reflecting rate increases to offset inflationary loss costs.”
But there are still ways that you can save on car insurance.
CarInsurance.com Insights
- The easiest way to save on car insurance is to shop around at renewal time and get quotes from multiple companies.
- Insurers offer discounts for students, good drivers, anti-theft devices and bundling with homeowners insurance.
- Choosing a higher deductible can significantly lower your rate.
Top ways to lower your car insurance
Getting cheaper car insurance requires some legwork, but the potential savings could make it worthwhile. Learn the best ways to save on car insurance — from shopping around to asking about discounts.
Compare multiple quotes
The best place to start is by determining where you can get the cheapest car insurance. Comparison shopping and gathering quotes from several insurers is the top way to save.
You may already have a pretty good deal with your current insurer, but the only way to know is by comparing regularly.
“Comparing car insurance prices before each renewal will show you which insurer is willing to offer you the best rate,” says Fran Majidi, an insurance expert at Modotech, an insurance software company.
Majidi explains that high-risk drivers with a history of accidents, license suspension, insurance lapses and DUIs should get quotes from insurers that specialize in non-standard insurance.
“If you’re a high-risk driver, specialty insurers may offer you better rates than a traditional car insurance company,” she says.
Bundle home and auto policies
One of the best strategies for lowering your rates is to look for insurers who offer discounts for bundling policies – such as auto and home or renters and car insurance.
For example, purchasing homeowners insurance from the same company that provides your car insurance can earn you a deep discount. In some instances, multi-policy discounts can be more than 9%.
But you don’t always save by bundling. It’s essential to compare what it would cost to purchase your policies separately to the price break you get on a bundle. It’s possible, for example, that you would do better to buy a home policy on its own and get your auto coverage from a company that offers one of the cheapest rates.
Increase your deductible
Raising your collision and comprehensive deductibles from $250 to $500 can significantly impact rates. Nationwide, for example, says you might save 15% to 30%. Increase your deductibles to $1,000; the savings could be as high as 40%.
Remember that a higher deductible means you’ll pay more out of pocket if you get in an accident and need to repair your vehicle. An expensive repair bill could easily surpass any savings you made on the front end.
Maintain a clean driving record
There are steps you can take to avoid expensive tickets and accident claims. Pay attention to your speed, don’t try to run a red light, be more cautious and drive defensively.
Poor driving history can disqualify you from getting the cheapest car insurance. Insurers will check your record to see if you present a high level of risk. Speeding tickets, accidents, and citations for driving under the influence can increase your insurance rates.
As we pointed out earlier, good driver discounts can save you up to 25%. In addition, insurance companies usually require that you have a clean driving record for at least three years. That means no DUIs, no moving violations and no at-fault collisions.
Drive sensibly and cautiously, and you’ll get cheap car insurance by avoiding surcharges and receiving a good driver discount.
Compare insurance rates before you buy a vehicle
Make sure to consider the insurance cost when shopping for a new ride. Cars that cost less to repair or replace generally have more affordable rates.
Don’t make the mistake of thinking that the “cheaper the car, the cheaper the insurance.” It doesn’t always work that way. Instead, compare car insurance rates by vehicle when shopping for a car.
You might consider purchasing a car that’s cheaper to insure. Insurance rates depend on your vehicle’s make and model.
Below you’ll find the list of the top 10 cheapest cars to insure.
| Make model | Six-month rates |
|---|---|
| Honda CR-V | $966 |
| Honda HR-V | $968 |
| Volkswagen Tiguan | $990 |
| Hyundai Venue | $1,000 |
| Chevrolet Trailblazer | $1,006 |
| Subaru Forester | $1,007 |
| Mazda CX-5 | $1,010 |
| Chevrolet Express | $1,018 |
| Subaru Outback | $1,021 |
| Hyundai Kona | $1,024 |
Pay in full instead of monthly
Depending on your car insurance company, your policy will be valid for six months or one year. You can pay your premium upfront in full or in monthly installments.
Drivers will save an average of 9% by paying upfront for a six-month or annual policy. A paid-in-full discount nets a savings of $232 per year on a full coverage policy. Drivers with this discount will spend $2,281 annually on car insurance vs. $2,513 without the discount.
If you want the discount, consider saving a monthly amount in order to pay your next premium in full.
Take advantage of discounts
Insurers typically offer a range of other discounts based on such factors as driving habits and school performance.
Here are a few standard discounts that might be available to you:
Multi-policy discount: When you purchase two or more policies from the same company, you can save as much as 9%.
Low mileage discount: If you’re an infrequent driver, you might qualify for a low mileage discount. Drivers who log less than 7,500 annual mileage net an average 9% discount, while drivers with annual mileage of 10000-11999 garner a 6% discount.
Telematics and usage-based discounts: A telematics program is a car insurance option that uses technology to monitor your driving habits.
Typically, it involves installing a small device in your vehicle or using a mobile app to track behaviors like speed, braking, mileage and time of day driven. Insurers use this data to assess your risk level, and you may receive discounts or personalized rates based on how safely you drive.
If you sign up for a telematics program with your insurance company, you can save 10% on your policy.
You can also consider a pay-per-mile insurance policy, which allows you to pay based on the actual miles you drive, rather than just giving a discount for driving less.
Understand all the car insurance discounts you may qualify for to take advantage of additional reductions.
Adjust your coverage levels
Adjusting your coverage levels can reduce your premium. However, it’s important to make sure that you’re not underinsured.
“Lowering your coverage limits will lower your auto insurance premium. However, keep in mind that setting your liability limits too low may expose you to major financial risks if you cause an accident,” says Majidi.
The amount of car insurance you need depends on many factors, but most states require a minimum amount of liability coverage. This is the cheapest car insurance you can legally have. Many drivers can benefit from having full coverage, which includes collision and comprehensive insurance, especially if you lease or finance your car, or own a newer vehicle.
You can get cheaper car insurance by dropping comprehensive and collision coverage if you have an older vehicle. But don’t drop that coverage without giving it some thought. Many experts say it’s time to drop these coverages when the actual cash value you’d receive for your vehicle doesn’t justify the insurance expense.
You might also consider dropping optional endorsements, like rental car reimbursement or roadside assistance, if you’re trying to save money.
Real-world savings examples
How much you can save on car insurance depends on factors like your insurance company and the specific discount.
The table below will give you an idea of what you could save by raising your deductible from $250 to $500.
| Full coverage car insurance cost with $250 deductible | $2,975 |
| Full coverage car insurance cost with a $500 deductible | $2,513 |
| $ Savings | $462 |
Here’s an example of how much your premium might go down if you raise your deductible from $250 to $1,000.
| Full coverage car insurance cost with $250 deductible | $2,975 |
| Full coverage car insurance cost with a $1,000 deductible | $2,210 |
| $ Savings | $765 |
Policy bundling can also lead to big savings. National averages for multi-policy discounts are:
- 13% for auto and homeowners insurance
- 12% for auto and condo insurance
- 6% for auto and renters
- 4% for auto and life
If you want to take advantage of discounts, pay attention to the savings potential that different insurers offer. For example, Progressive’s good student discount starts at 5%, whereas GEICO’s smart student discount is 15%. If you want to insure multiple vehicles, Progressive offers an average discount of 12%, and GEICO offers savings of up to 25%.
Can my job or profession qualify me for lower insurance rates?
Your job can save you money — firefighters and scientists earn the steepest professional discount of 13%, saving up to $255 annually on a full coverage insurance policy. Below, see other professions and the average discounts you can receive.
Select your profession to see insurance discounts, and click on the numbers in the 'State Availability' column to see the list of states where the companies offer discounts.
Savings tips by driver profile
While there are some tried-and-true methods of saving money on car insurance, the best ways to save sometimes comes down to your age and driver profile. Here are some tips for saving money on car insurance based on your situation:
- New/teen drivers: Teen drivers can typically get the cheapest car insurance when they stay insured on a parent’s policy. Young drivers can also take advantage of smart student discounts and student away at school discounts. Some insurers offer savings for completing a driver safety course.
- Seniors: Seniors who may be driving less might qualify for low-mileage car insurance discounts, which can reduce your premium significantly. If you drive an older vehicle, you might also be able to drop collision and comprehensive insurance, which would lower your premium.
- Commuters vs. low-mileage drivers: The amount you drive can have an impact on your car insurance premium. Occasional drivers who don’t commute regularly should look into a pay-per-mile policy, which charges a premium based on a flat monthly rate and a small fee for each mile driven. Commuters might find savings through bundling policies or taking a defensive driving course.
- Urban vs. rural drivers: Drivers in urban areas often pay more for car insurance than people living in rural areas. If you live in a city, think about insuring a vehicle that has safety features, like an anti-theft device, or keeping your car in a covered garage, which could help you save.
Tip
“Saving on car insurance isn’t just about price—choose the right coverage for real protection.”
Common mistakes to avoid
Here are some common mistakes that many drivers make when trying to save money, and how you can avoid them:
- Underinsuring to save: A major mistake that drivers make when searching for cheap car insurance is to choose a state minimum coverage policy. Even though it’s the cheapest coverage you can legally have, it provides very limited financial protection. In most cases, it’s smarter to spend more to get a full coverage policy, which will cover your own losses if you get into an accident.
- Not comparing quotes annually: It’s a good idea to compare car insurance quotes at least once per year, or after a major event, like moving, getting married, filing a claim or adding a teen driver to your policy. You might find that a different insurance company can offer you a better deal for your current situation and coverage needs.
- Forgetting to ask about discounts: Almost all car insurance companies offer discounts, and that can go a long way in helping to reduce your premium. Choose a car insurance company that offers multiple discounts you can qualify for. That way, you can maximize your savings.
- Letting your policy lapse: Letting your policy lapse is a big mistake that drivers make when they aren’t able to afford their car insurance premium. When your policy lapses, your coverage terminates, and it goes on your personal insurance record. When you go to purchase insurance again in the future, you will likely pay a much higher rate than you did before.
Frequently asked questions
How can I get cheaper car insurance?
There are lots of ways to get cheaper car insurance. You can bundle your policies, look for discounts, take a defensive driving course, pay your annual premium in full and get new quotes.
Which discounts do insurers offer?
Each insurer offers different discounts. Some of the most common include good student discounts, new car discounts, safe driver discounts, claim-free discounts, pay in full discounts and policy bundling discounts.
Is it safe to increase my deductible?
It’s safe to increase your deductible as long as you can afford the higher amount in the event of a claim. You should avoid raising your deductible to a limit that you couldn’t comfortably pay out of pocket if you had a loss.
Does my credit score affect my rates?
Yes, in most states, insurance companies can use your credit score to calculate your car insurance premium. In general, drivers with excellent credit pay the lowest rates, whereas drivers with poor credit pay higher rates.
How often should I shop for new quotes?
It’s recommended to shop for new car insurance quotes at least once per year. However, it can also be beneficial to get new quotes after a big event or life change, like moving to a new city, getting married, buying a new car or adding a teen to your policy.
Resources & methodology
Methodology
CarInsurance.com editors collected rates from Quadrant Information Services for a 40-year-old male and female driver carrying a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductibles.
Read the detailed methodology for more information.
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