10 Ways to Lower Your Car Insurance Costs

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Unfortunately, there's never a year-end clearance sale on car insurance. However, with some work on your part, you can still find the cheapest auto insurance rate possible.

1. Shop Different Insurance Carriers

The first and best thing you can do is comparison shop for car insurance rates from different carriers. You can search online quoting websites such as Compare.com, Insurify, QuoteLab, and The Zebra. You could also consider contacting an independent agent for help in getting the best price. Independent agents typically sell policies for five to eight insurance companies, allowing them to choose from among several options to determine what is best for you.

Recommendations from friends and family members may also be helpful in narrowing down your choices, especially when it comes to the integrity of an insurance agent or company. But because car insurance rates are so dependent on the specific circumstances of an individual driver, recommendations may be less beneficial when it comes to finding a low price.

The bottom line: You should compare rates from at least three companies before settling on one.


Make sure that any website or person you provide personal information to—especially info of a financial nature—is trustworthy.

2. Bundle All Insurance Policies

Policies grouped together and purchased from the same insurer are almost always cheaper than separate policies from different companies. You can bundle homeowner's or renter's insurance with auto insurance. And you can also add an umbrella policy, which protects you from liability beyond what your homeowner's or auto policy covers and is also referred to as excess liability insurance.

As of March 2020, Farmers offered the greatest bundling discount for home and auto policies, at 22.05%. But USAA was still cheapest overall among eight insurers, even with its smaller, 3.84% bundling discount.

3. Request All Discounts Available

Car insurance companies offer a wide range of discounts based on equipment that is installed on your vehicle and your loyalty as a customer, among other factors. You should request all that apply to you, and verify that your bill reflects them.

For example, Geico offers a 40% discount if your car has a full-front-seat airbag and a 25% discount if you insure more than one vehicle on a policy. State Farm offers a 25% discount if you get good grades in school.

4. Decide Whether You Need Comprehensive and Collision Coverage

In nearly every state, drivers are required to have a minimum amount of liability insurance, which covers you for any damage you do to another driver's car and for any injury to that driver. Consumer Reports advises drivers to go beyond these state minimums and purchase liability insurance that covers $100,000 per person, $300,000 per incident, and $100,000 for property damage.

However, you may be able to save money on your insurance by canceling your comprehensive and collision (C&C) coverage. Collision coverage is for damage to your own car if you have an accident involving another vehicle or an object, such as a telephone pole. Comprehensive coverage protects you from a non-collision-related loss, such as theft, vandalism, or damage caused by bad weather, a falling object, or an animal.

Consumer Reports recommends canceling C&C coverage if the annual premiums for it amount to 10% or more of your car’s book value.

5. Raise Your Deductible

If you carry only liability insurance, you won’t have a deductible because this insurance covers losses you cause other people to incur in an accident. (A deductible is the amount of money you agree to pay before your insurer will make any payment toward your own loss.) However, C&C coverage does have a deductible. The larger the deductible amount you agree to pay, the lower your insurance premiums will be.

"Consumer Reports recommends canceling your C&C coverage if the premiums for it amount to 10 percent or more of your vehicle's book value. Continuing to pay for C&C coverage in that situation may very well cause you to spend more on the coverage than you would get to repair or replace your vehicle.


If you go for the higher deductible to save on premiums, consider keeping your deductible amount in a savings account so you will be prepared in the event you need to file a C&C claim.

6. Consider PPM or Telematics Insurance

If you don’t drive many miles and are a careful driver, you could save some money with pay-per-mile (PPM) or telematics insurance. PPM programs are offered by Esurance and Metromile. Both companies use devices in your car to track the number of miles you drive annually. In the case of Esurance, if you drive fewer than 10,000 miles, your premiums will be less.


Esurance's PPM program isn't available in all states or for hybrid or electric vehicles.

Several major insurance companies go a bit farther and use a telematics device to track your driving behaviors, including jamming on the brakes, speeding, and driving after dark. The discount you receive for being a careful driver is either a percentage (as much as 25% for Allstate) or a dollar amount (an average of $130 for Progressive).

7. Keep a Clean Driving Record

Safe drivers get some of the best rates, so getting the cheapest rate possible can result directly from your own actions. The major auto insurance companies have different criteria for what exactly constitutes a safe driving record but not having been ticketed for a moving violation or not causing an accident are standard. Some insurance companies consider you to be a safe driver only if you've never made a claim, regardless of who was at fault.

Driving records used by insurers typically cover the past seven to 10 years. A speeding ticket may stay on your record for only five years, while a DUI will probably be on your record for a full decade.

8. Improve Your Credit Score

Good credit can also influence your insurance rates, and about 95% of auto insurance companies use your insurance credit score when setting your premiums in states where it is legal to do. Your insurance credit score is a special type of credit score that is designed to quantify your risk to an insurer.

Nationwide uses the following aspects of your insurance credit score when determining premiums:

  • Your payment history, including late payments and failure to pay
  • The length of your credit history
  • The types of credit in your history

9. Avoid Fees

Some insurance companies charge you a fee every time you make a payment or they mail you a bill. It's a way of getting you to automate your payments or pay your entire bill at once, rather than in installments. For example, Farmers Insurance charges you up to $2 if you don't receive bills via email. And if you don't have your payment automatically deducted from your bank account, this insurer may charge you up to $5.

If you are late with a payment, you run the risk of having your coverage dropped and of getting hit with a fee. Farmers charges a maximum of $10 for a late payment.


Laws regarding the fees insurers can charge you vary by state.

10. Suspend Your Coverage of an Unused Vehicle

If you are not driving one of your vehicles and plan to keep it in storage for more than a month, you may cancel or temporarily suspend insurance for it—though some companies enable you only to do the former.


Suspending your policy for a short time may cause your premiums to go up when you renew your coverage. And if you're still making payments on the car, your lender may require you to maintain insurance coverage under the terms of your loan agreement.

A better idea might be to suspend your liability and collision coverage but retain your comprehensive coverage in case the car gets stolen or damaged. Geico, as one example, offers a lower rate on comprehensive-only insurance for a stored vehicle.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Mutual Benefit Group. "7 Reasons to Choose an Independent Agent."

  2. Insurance Information Institute. "Choosing an Insurance Company."

  3. Insurance Information Institute. "How Much Homeowners Insurance Do I Need?"

  4. The Zebra. "Best Bundling Discounts for Car Insurance."

  5. Geico. "Car Insurance Discounts — Savings on Auto Insurance."

  6. State Farm. "Take Control of Your Auto Insurance Discounts From State Farm."

  7. Consumer Reports. "Car Insurance Buying Guide."

  8. National Association of Insurance Commissioners. "Understanding Your Auto Insurance Policy."

  9. The Zebra. "Pay-Per-Mile Car Insurance."

  10. Udell Family Insurance. "What Is a Clean Driving Record?"

  11. National Association of Insurance Commissioners. "Credit-Based Insurance Scores: How an Insurance Company Can Use Your Credit to Determine Your Premium."

  12. Nationwide. "How Credit Affects Your Car Insurance Premiums."

  13. Farmers Insurance. "Billing Fee Explainer."

  14. Allstate. "Do I Need Insurance for a Car That's in Storage?"

  15. Geico. "How to Cancel Your Geico Car Insurance Policy."

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