15 Money Saving Tips on Car Insurance

In these economic times, consumers seek ways to make savings wherever possible. With gas prices rising, at least we can take comfort in knowing that our insurance rates could go down. According to ValuePenguin’s 2026 analysis, the average full-coverage car insurance premium in the United States now exceeds $2,100 per year — making it one of the most significant recurring household expenses. You can make meaningful savings on your insurance needs. It is crucial to compare rates and coverage amounts with one another before making any changes to your policy.

1. Review Your Deductible

The deductible is the amount of money you are responsible for paying before your insurance company will pay to repair or replace the property that gets damaged or destroyed. In the case of auto insurance, your car’s value can be worth more than you owe on it. According to the Insurance Information Institute, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage costs by 15 to 30 percent. Before making any changes to your policy, compare rates and coverage amounts with one another.

2. Reduce Mileage

Some companies discount your auto insurance policy if you keep low mileage on your vehicle (approximately 5,000–8,000 driving miles a year). Carriers such as Progressive, Allstate, and State Farm offer usage-based insurance (UBI) programs — sometimes called telematics programs — that track your mileage and driving behavior through a mobile app or plug-in device. The Consumer Reports guide to usage-based insurance notes that low-mileage drivers can save up to 30% through these programs. You will not get a discount if you are driving a company car.

3. Remove Sports and Collectible Vehicles

Some insurers offer discounts if you remove sports and collectible vehicles from your standard policy and place them under a specialized agreed-value policy instead. These vehicles can cause higher rates because they are more expensive to repair in case of an accident. According to Hagerty’s collector car insurance guide, insuring a classic vehicle under a dedicated collector policy rather than a standard auto policy can reduce premiums by 40% or more. Removing these vehicles from your standard policy can reduce the overall cost of your insurance plan.

4. Life Insurance

Some companies offer discounts when you bundle life insurance with your existing auto policy for peace of mind for your loved ones. Your coverage amount will affect your policy costs, so knowing the benefits you receive from a higher policy amount and whether the premium you pay is worth it is essential. If the price of your policy is too high, consider simply getting a life insurance quote from a provider like New York Life or MassMutual to compare your options. The NAIC’s consumer life insurance guide recommends reviewing bundled policy options annually to ensure you are getting the best combined rate.

5. Auto Insurance Rates

Some companies have slightly different auto insurance rates for drivers under 25 years old, especially those without established driving records. The CDC reports that teen drivers are nearly three times more likely to be involved in a fatal crash than drivers aged 20 and older, which is a key reason insurers charge higher premiums for this group. Also, some states have their own minimum requirements for auto insurance coverage. If you are a resident of a state with different rules, it is essential to determine if these requirements will affect your policy premium. State insurance departments, which fall under the oversight of the National Association of Insurance Commissioners (NAIC), publish minimum coverage requirements for every state.

6. Take Advantage of the Internet

The Internet has made it easy to search for the best auto insurance rates in your state. Comparison platforms such as The Zebra and Policygenius allow consumers to receive multiple competing quotes in under five minutes without speaking to an agent. All you need is accurate personal information, patience, and a willingness to review the details of each offer carefully. You may also discover that you are entitled to discounts you were not previously aware of, such as alumni discounts, professional association discounts, or affinity group pricing.

7. Consider Buying a New Car

No matter how safe your car is, getting a new automobile after a certain period is always worth considering from an insurance standpoint. Some insurance companies offer auto insurance discounts to people who have recently purchased new vehicles equipped with advanced safety features such as automatic emergency braking, lane-keeping assist, and blind-spot monitoring. The Insurance Institute for Highway Safety (IIHS) has documented that vehicles with these features are involved in significantly fewer accidents, which is why insurers reward their ownership with lower premiums. If you drive an old car that is unsafe and lacks modern safety technology, you may have to pay more for auto insurance.

8. Shop Around

Shopping around is the best way to reduce auto insurance costs. You can get the best car insurance rates by comparing companies such as Geico, Progressive, State Farm, USAA, and Allstate, and determining which offers better deals for the same level of coverage. According to Bankrate’s 2026 insurance research, drivers who shop their auto insurance every 12 months save an average of $461 per year compared to those who automatically renew. Each company will show a different price for each of its policies, so comparing quotes when shopping around is always a good idea.

9. Know Your Needs

Make sure you are aware of your specific coverage needs before purchasing or renewing a policy. You may opt for a policy that covers all minor damages — this type of policy is generally known as comprehensive auto insurance. Comprehensive coverage will help pay for any damage caused by high wind, hail, or flood, and it will also cover items like car seats, tires, and windshield wipers. However, if your vehicle is older and its market value has dropped significantly, the Insurance Information Institute recommends considering whether dropping comprehensive and collision coverage makes financial sense — particularly if your car is worth less than $4,000.

10. Use Your Credit Score

Using your good credit score can save you money in the long run since insurance companies in most states may offer lower rates to those with strong scores. According to Experian, one of the three major credit bureaus alongside Equifax and TransUnion, drivers with a poor FICO Score (below 580) pay up to 76% more for car insurance than drivers with exceptional credit (above 800). Auto insurance is more expensive for people with poor credit scores, which can mean you are stuck with a higher premium. Actively working to improve your FICO Score by paying bills on time, reducing your credit utilization ratio, and disputing errors on your credit report can meaningfully lower your insurance costs over time.

11. Marriage Status

Auto insurance prices can vary by state but also by your marital status. If your state allows it, married couples are generally charged less than single drivers because statistical data shows they file fewer claims on average. According to NerdWallet’s married vs. single driver analysis, married drivers pay an average of $96 less per year for car insurance than single drivers with otherwise identical profiles. The exact price will vary from one company to another, but updating your marital status with your insurer promptly after marriage is a simple step that can yield immediate savings.

12. Avoid Multiple Policies

The law requires that you have auto insurance if you want to drive legally. People will sometimes purchase more than one separate policy to cover their other vehicles and homes. If you have more than one policy with different insurers, you can save money on your insurance costs by consolidating all of your policies with a single carrier and eliminating redundant coverage. This strategy — known as bundling — is widely offered by major insurers including Nationwide, Liberty Mutual, and Farmers Insurance. According to Policygenius, bundling home and auto insurance saves the average household $646 per year.

13. Get the Right Coverage

The cost of your auto insurance policy is determined by the total coverage you have chosen to purchase. Insurance coverage can cover liability for damage to others (third-party liability) or your own property (first-party coverage). Other types of auto insurance coverage include medical payments (MedPay), personal injury protection (PIP), uninsured/underinsured motorist coverage, and gap insurance. The NAIC’s consumer auto insurance guide recommends that drivers carefully evaluate each coverage type against their specific financial situation, loan obligations, and the current market value of their vehicle before selecting a plan.

14. Have A Good Driving Record

Insurance companies may offer you lower rates if your driving record is clean and free of at-fault accidents, speeding tickets, and moving violations. This is because clean records demonstrate that you are a safe driver and statistically less costly to insure. Improving your driving record can reduce the amount of money you spend on insurance every year. In many states, completing a state-approved defensive driving course can proactively remove points from your record or earn a direct discount. The DMV’s insurance discount overview notes that good-driver discounts range from 10% to 26% depending on the insurer and state.

15. Check for the Availability of Home and Automobile Insurance Discounts

Many insurers offer a discount or a complete waiver on a portion of your auto insurance premium if you also hold a home insurance policy with them. You can get additional deals if multiple vehicles are insured under one plan through a multi-car discount. According to Forbes Advisor’s car insurance discount guide, the multi-vehicle discount averages 8% to 25% per vehicle depending on the insurer. Carriers such as Geico, State Farm, and Allstate each publish their full list of available discounts on their websites. You can save money by purchasing both your home and auto policies from the same insurer and following their guidelines regarding renewal dates.

Auto insurance is expensive, but you can save money on your premiums. Keep a detailed record of everything you have paid for your policy, and always remember to cancel or update your renewal on time. You can also compare quotes from different companies using platforms like The Zebra, Policygenius, or directly through carrier websites, and choose the one which offers you the best deal. Remember that you must always be aware of the laws — which fall under the jurisdiction of your state’s department of insurance and are coordinated nationally by the NAIC — that determine your minimum required coverage. Changing your coverage levels frequently and without reason may lead to coverage gaps or an increase in your premium.

Frequently Asked Questions

What is the fastest way to lower my car insurance premium?

The fastest way to lower your car insurance premium is to shop competing quotes from multiple insurers and raise your deductible. Drivers who compare rates from at least three carriers and increase their deductible from $500 to $1,000 can often reduce their annual premium by 20 to 30 percent within a single billing cycle.

How much can I save by bundling home and auto insurance?

Bundling your home and auto insurance with the same carrier saves the average household $646 per year, according to Policygenius. Discounts vary by insurer but typically range from 5% to 25% off each policy when both are held with the same company.

Does my credit score really affect my car insurance rate?

Yes. In most states, insurers are legally permitted to use a credit-based insurance score — derived from your FICO Score — as a rating factor. Experian data shows that drivers with poor credit (below 580) pay up to 76% more than drivers with excellent credit (above 800). California, Hawaii, Massachusetts, and Michigan are currently the only states that prohibit the use of credit scores in auto insurance pricing.

What discounts should I ask my insurer about?

You should ask about good-driver discounts, good student discounts, low-mileage or pay-per-mile discounts, multi-vehicle discounts, bundling discounts, telematics program discounts, defensive driving course discounts, and affinity or professional association discounts. Many policyholders qualify for discounts they never applied for simply because they did not ask.

How often should I shop around for car insurance?

You should shop around for car insurance at least once every 12 months, and also after any major life event such as moving to a new state, getting married, buying a new car, or adding a driver to your policy. Bankrate research shows that drivers who shop annually save an average of $461 per year compared to those who auto-renew without comparing.

What is the difference between comprehensive and collision coverage?

Collision coverage pays to repair or replace your vehicle after an accident involving another vehicle or object, regardless of fault. Comprehensive coverage pays for damage caused by non-collision events such as theft, vandalism, hail, flooding, or hitting an animal. Both are optional under state law but are typically required by lenders if you are financing or leasing your vehicle.

At what point should I drop comprehensive and collision coverage on an older car?

The Insurance Information Institute recommends considering dropping comprehensive and collision coverage when your vehicle’s market value falls below $4,000, or when the annual cost of those coverages exceeds 10% of your car’s current value. You can check your car’s current market value using tools like Kelley Blue Book or the NADA Guides.

Can I lower my car insurance rate by taking a defensive driving course?

Yes. Many states allow insurers to offer a discount for completing a state-approved defensive driving course, and some states require insurers to honor it by law. Discounts typically range from 5% to 15% and may last for three years. The course can also help remove points from your driving record in states that permit it.

How does my annual mileage affect my car insurance rate?

Insurers view higher annual mileage as greater exposure to accident risk, so lower-mileage drivers generally pay less. Drivers who log fewer than 7,500 miles per year often qualify for low-mileage discounts or usage-based insurance (UBI) programs. Programs like Progressive’s Snapshot or Allstate’s Drivewise can reduce premiums by up to 30% for qualifying low-mileage drivers.

Is it better to pay my car insurance monthly or annually?

Paying your car insurance premium annually rather than monthly almost always results in a lower total cost. Most insurers charge an installment fee — typically $3 to $9 per month — for monthly billing, which adds up to $36 to $108 per year in extra charges. If your cash flow allows it, paying in full at renewal is a simple way to reduce your total insurance cost.