How To Save On Car Insurance: 7 Ways To Lower Your Rate

Finding affordable car insurance can feel like an uphill battle. From 2023 to 2025, the national average cost of full coverage car insurance increased by 31 percent, drastically outpacing the rate of inflation and household income growth. Needless to say, drivers everywhere are looking for ways to save money. There are a lot of factors in play in terms of pricing an insurance policy. Many are out of your control, like location and the price of vehicle parts and labor. But the key to finding cheaper car insurance is understanding what you can control and optimizing these factors.

How you can lower your car insurance cost

The best place to start looking for cheaper car insurance is at the beginning, before you purchase your vehicle. The cost of owning a car adds up fast when you consider the additional cost of maintenance, gas and financing. Operating costs vary between vehicles, and so does car insurance. Getting quotes for several different types of vehicles before heading to the dealership can help you find which cars fit within your auto insurance budget.

Full coverage savings don’t end when you sign on the dotted line. Below we outline 8 ways drivers may be able to save money on auto insurance costs with almost any car insurance company.

1. Shop around

The average cost of car insurance is $2,679 per year for full coverage car insurance and $808 per year for minimum coverage as of August 2025. According to J.D. Power’s 2025 U.S. Insurance Shopping Study, 57 percent of U.S. auto insurance customers shopped for coverage with a different carrier in the past year. With auto premiums increasing nationwide, drivers are likely not finding the same level of savings they had in the past. Even with elevated premiums, comparing car insurance rates and coverage limits among different carriers could help you save.

Car insurance companies each have their own methods for calculating rates, and your individual rating factors play a significant role, so you won’t know how much car insurance may cost with other carriers unless you request a quote.

Switching providers might be an easy way for you to lower your auto insurance rates.

The table below showcases average premiums from some of the nation’s largest auto insurance companies, along with their insurance shopping score from J.D. Power. J.D. Power’s customer satisfaction ranking is based on a 1,000-point scale with a study average of 535.

2. Take advantage of discounts

Taking advantage of discount opportunities is another solid strategy that can help lower the cost of car insurance. Most insurers offer several types of discounts, and many are applied to your policy automatically when you qualify for them, like multi-car and safe driving discounts. Others require you to take action. Being proactive and inquiring about discounts can help you discover new ways to save, as Bankrate editor Natasha Cornelius learned when she tried telematics for the first time.

The most common car insurance discounts fall into a few general categories:

• Bundling discounts: Most insurers that offer auto insurance also sell homeowners insurance — and if you purchase both products from the same insurer, you’re typically granted a discounted rate on both policies. You may also be eligible for bundling discounts with a renters, life or motorcycle insurance policy, as well as multi-car discounts if you’re insuring more than one vehicle.
• Safety discounts: Insurers typically reward proven safe drivers with discounts. In some cases, you can qualify for a safe driving discount by staying accident-free for a certain number of years, completing a defensive driving course or reducing your annual mileage.
• Telematics discounts: Many insurers offer telematics programs, which offer an initial discount at sign-up and can potentially lower the rate even more if your carrier deems your driving habits as safe. Telematics programs track your driving over time via GPS technology. However, it is important to know that some carriers may increase your rate if they detect poor driving habits.
• Student discounts: College students often pay high insurance rates, but good grades and heading to school without a car could reduce the cost of coverage.
• Payment discounts: Paying your premium in full or even setting up auto-pay could qualify you for a small discount on your rate.
• Affiliation discounts: Some companies, such as Geico, offer discounted car insurance rates to members of certain professional and alumni organizations. Check with any organizations you’re part of to see if there’s a car insurance discount available to you.

3. Don’t pay for coverage you don’t need

Removing extra coverage from your auto policy may help you lower rates, but should be done with caution. You will want to make sure you don’t remove coverage that could put your financial future in jeopardy. It is a good idea to reach out to your agent ahead of time if you are considering making major changes to your policy.

First, start with optional coverage types like roadside assistance and rental reimbursement coverage. While these types of coverage can be immensely helpful, you may be paying for duplicate coverage if you also have these benefits with a membership program like AAA or through a credit card company. Or maybe you now work from home and could make do without a rental car if your vehicle is being repaired following a covered claim.

Another important decision could be choosing between full coverage and liability-only insurance. Most insurance professionals recommend keeping full coverage on your vehicle if you can’t afford to replace it out of pocket, and your lender may require that coverage if you don’t yet own the car outright.

But for older vehicles, the cost of full coverage insurance can exceed the car’s actual cash value at some point in time. If you own an older, low-value vehicle, you may find it helpful to research your car’s value and average repair costs in your area to see if you can afford repairs on your own. Below shows the price difference between full coverage insurance and minimum coverage insurance rates.

4. Increase your deductibles

Your car insurance deductible is the amount you pay to repair or replace your vehicle when it’s damaged in a covered claim. Your insurance carrier will pay the actual cash value of the vehicle minus the deductible. Deductibles typically apply to collision and comprehensive coverage, but some states include deductibles on personal injury protection (PIP) and uninsured motorist property damage coverage (UMPD).

A higher deductible is likely to result in a lower premium, but be careful that you don’t choose a limit that would be difficult for you to pay in the event of a claim.

5. Consider pay-per-mile insurance

You may have heard of pay-per-mile insurance, a form of usage-based insurance that bases your premium directly on how much you drive. Consider pay-per-mile insurance if you don’t have a commute or drive very often. Insurance companies typically consider you to be at lower risk of getting into an accident since you’re not on the road as much. As such, they might reward you with a lower insurance premium.

6. Improve your credit

Insurers use credit-based insurance scores to help price premiums, except in states where the use of credit to calculate rates is limited or banned. In most states, those with excellent credit usually receive cheaper auto insurance. On average, drivers with poor credit pay 75 percent more for full coverage insurance than drivers with good credit. While evidence does show that drivers with poor credit histories are more likely to file auto insurance claims, some industry experts argue that the use of credit disproportionately harms customers who are already systemically discriminated against within the financial system.

If your credit could use some work, consider taking time to improve your credit score. While significant credit boosts can take time, paying off debts, setting up a monthly budget to help track bills and making on-time payments can go a long way toward reducing your insurance expenses.

7. Review your policy before renewal

Periodically reviewing your car insurance policy can help ensure you’re saving on car insurance, but also that your selected coverage meets your current needs. If you’ve had any major life changes, like getting married, moving to a new location or changing your commute, your car insurance policy could use a review to ensure it reflects your current lifestyle.

It’s a good idea to take a close look at your policy once a year or whenever it is up for renewal to see if there are additional savings you can take advantage of. You may also want to ask for a few free quotes from other carriers at the same time to see if it would be worth your while to consider switching to another company.

8. Think outside the box

If you have exhausted all other options, it may be time to get creative. If you have a vehicle on your policy that is only used seasonally, ask your carrier if they offer a storage plan. This would allow you to remove all the coverage from the vehicle except comprehensive coverage while keeping your multi-car discount. Please note that this solution should only be used if the vehicle is stored and not driven until coverage is applied back to the car.

Can you carpool to work or join a park-and-ride service? Lower annual mileage could reduce your premium. If you live with family members, it may be cheaper to put all the cars and drivers on one policy. Talking to your agent may help you find additional ways to cut insurance costs.

High auto rates aren’t just a concern for drivers, but for car insurance carriers as well. As they say, “necessity is the mother of invention” and leaders in the insurance industry are also looking to create ways to lower auto insurance. Not only are usage-based insurance policies gaining in popularity, but so are embedded insurance plans — insurance policies that are sold with the purchase of a vehicle, like Tesla or GM.

Frequently asked questions

• What is the best cheap car insurance?
  

  Each driver has unique personal rating factors, including age, location and driving record. Because these factors in addition to others, like the make and model of the car you drive, influence the underwriting process and the final rate you pay, the best cheap car insurance provider will be different for everyone. To narrow down your list, consider which providers offer low rates on average in your area and how many discounts you would be eligible for with a particular policy.

• Is cheap car insurance available for high-risk drivers?
  

  High-risk drivers may have a difficult time finding cheap car insurance. That’s because high-risk drivers may be more likely to cause expensive accidents, and insurance companies typically balance the risk with more expensive premiums. However, whether you’re a good driver or have a few marks on your record, the same strategy applies. Shopping around, being open to different carriers and requesting quotes may give you a better idea of how much your car insurance premium will be. If you have a severe high-risk incident on your record, like a DUI or multiple coverage lapses, you may need to purchase coverage through a dedicated high-risk carrier or state program.

• How much car insurance do I need?
  

  Almost every state in the U.S. and Washington, D.C., has a required minimum amount of insurance that you need to purchase to be on the road legally. Usually, this is liability insurance but may also include personal injury protection or uninsured motorist coverage. In addition, if you have a car loan or lease, you may be required to purchase full coverage insurance. Many insurance experts would recommend that you purchase more than the minimum amount of liability coverage so you are financially protected in the event that you are in a serious accident with high costs. If you are still unsure how much car insurance you need, consider working with an insurance agent to purchase coverage.

• Should I switch carriers to get cheaper car insurance?
  

  Switching to a new carrier could earn you a significant discount on your car insurance — but you may want to consider the trade-offs if the quotes you receive from other carriers aren’t much lower than your current rate. If you’re currently earning discounts from your insurer, check whether the same discounts are available from the other company and whether you’ll be eligible for them as a new customer. Take non-monetary benefits, like an agent you trust or a user-friendly app, into account as well; in some cases, it’s worth sticking with a slightly higher rate if you’re otherwise happy with your insurance provider.

• Does removing a driver reduce my insurance rate?
  

  In general, you are likely to see a lower car insurance rate when you remove a driver, but there are several caveats. For starters, if you have discounts that depend on that driver, then you may lose those discounts. Further, if the removed driver had a significantly better driving record than the remaining driver(s), your rates could go up. If the removed driver is younger, has an equivalent or worse driving record and is not required for any of your current discounts, then removing them will likely lower your premiums.

  It’s important to know that if the driver is going to continue driving your vehicle, it may be illegal for them to be discluded from your policy, depending on your state, and any accident they cause could end up being your responsibility up to the limit of your policy. The nuances can be complicated, but even when another driver is removed from your policy, the vehicle remains covered, provided the driver has your permission to drive.

Methodology

Bankrate utilizes Quadrant Information Services to analyze August 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually. Bundling and paperless billing discounts are applied.

These are sample rates and should only be used for comparative purposes. Your quotes will differ.

If otherwise specified, the base profile has been modified with the following driver characteristics:

• Credit-based insurance scores
  

  Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

• Incidents
  

  Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.

• Mileage
  

  Rates were calculated by evaluating our base profile with the following differences in mileage: 2K, 5K, 12K (base), 15K and 20K.

• Model
  

  Unless otherwise stated, rates are for 2023 vehicle models. For new vs. used vehicles, we included the following year in our calculations: 2013.

• Age
  

  Rates were calculated by evaluating our base profile with the ages 18-70 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations. For teen drivers, rates were determined by adding a 16- or 17-year-old teen to their 40-year-old married parents’ policy. The rates displayed reflect the total cost of a driver this age added to their parents’ policy.

• Gender
  

  The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.

• Status
  

  Rates were evaluated based on the following marital/family status: single (base), married, 40-year-old married man and woman. Marital status is not a rating factor in Hawaii and Massachusetts.