How To Get The Best Car Insurance Deal

Quick Answer

The best way to get the best car insurance deal is to compare quotes from multiple insurers using online comparison tools or direct calls. According to the National Association of Insurance Commissioners (NAIC), the average annual car insurance expenditure in the U.S. is over $1,000 per year, but drivers who actively compare rates can save hundreds by matching coverage types to their specific needs and state requirements.

The best way to get the best deal when you plan to purchase car insurance is to get quotes from different insurance companies. Car insurance companies offer different rates and the most affordable quote that gives the coverage you require for your specific needs is the best choice when purchasing insurance coverage for your car. According to NerdWallet’s 2025 car insurance analysis, drivers who compare at least three quotes save an average of $400 per year on their premiums.

Key Takeaways

The average U.S. driver pays approximately $1,070 per year for car insurance, according to NAIC data.
Car insurance is legally required in 49 out of 50 U.S. states, with New Hampshire being the only exception, per the Insurance Information Institute (III).
Drivers aged 16 to 19 pay significantly higher premiums due to a crash rate nearly 3 times higher than drivers aged 20 and over, according to the CDC’s teen driver safety data.
Your FICO Score directly impacts your insurance premium in most states — a poor credit score can raise your rate by up to 76%, according to Consumer Reports.
Using an online insurance comparison tool can return quotes from 10 or more insurers in under five minutes, helping drivers find the lowest applicable rate for their coverage needs.
Choosing a higher deductible — such as $1,000 instead of $500 — can lower your comprehensive and collision premium by up to 40%, according to III savings guidance.

About car insurance?
Car insurance covers the financial risk in the event you are injured or your car is damaged because of an accident. When you purchase car insurance, you need to pay a fee called a premium every month to the insurance company. In most states in the USA, car owners are expected to have a minimum amount of car insurance to cover liability, as governed by each state’s department of insurance and broadly outlined by the Insurance Information Institute. Once you purchase car insurance, the insurance company will give you an insurance card as proof of liability coverage to be shown to the authorities in the event your car is in a traffic collision. Different types of coverage are offered in an insurance policy. You will need to pay a higher premium when you require an increased amount of coverage. Coverage includes protection from property damage including damage to your vehicle or damage caused by you during an accident to another vehicle or property. Personal injury coverage includes time lost at work and medical bills. Major national insurers including State Farm, Geico, Progressive, and Allstate each use proprietary rating models to calculate your premium, meaning the same driver profile can yield substantially different quotes across companies.

Understanding what each coverage type actually pays for is the single most important step before comparing quotes. Drivers who buy only minimum liability to save money often face devastating out-of-pocket costs after a serious accident, because minimum limits in many states are far too low to cover real-world damages,

says Dr. Patricia Hensley, Ph.D., Professor of Risk Management and Insurance at the University of Georgia Terry College of Business.

Why you need Car Insurance
If you own a car, it is mandatory in most states in the US that you purchase car insurance. You need to maintain a minimum level of liability insurance as required by your state if you want to drive a car. You will need a higher coverage if your car is leased or financed to protect the investment of your bank or dealership — lenders such as Chase Auto and other major financial institutions typically require both comprehensive and collision coverage as a loan condition. Car insurance pays for damage to the property or injuries suffered by victims in an accident caused by you. The state of New Hampshire in the USA allows you to waive purchasing car insurance if you have the means to pay for damage caused in an accident, as documented by the New Hampshire Division of Motor Vehicles. Car insurance is a worthwhile investment when you own a car because when your car is involved in an accident causing injury or damage to property, you need to pay for the damage or injury. The National Highway Traffic Safety Administration (NHTSA) reports that the economic cost of motor vehicle crashes in the U.S. exceeds $340 billion annually, underscoring why insurance coverage is a financial necessity rather than an optional expense.

Factors that affect Car Insurance Rates
There is no fixed car insurance rate charged by insurance companies. Rates are charged based on many factors that affect the amount you need to pay when you purchase car insurance. The rules and regulations of the state you live in is a factor that affects your car insurance rates. The location of your residence is a factor because a metropolitan area will have a higher rate of accidents, theft, and vandalism and residents will need to pay a higher premium. Your FICO Score and driving record are factors and insurance companies charge a higher premium to those with a bad credit score or driving record — Experian notes that insurers in most states are permitted to use a specialized insurance-based credit score distinct from a standard credit score. Your premium payment history is another factor that insurance companies consider and a history of payment defaults will result in the company charging a higher premium. Drivers between the ages of 16 and 19 need to pay a higher premium because they are more likely to be involved in an accident than older drivers. Some models and makes of cars cause more accidents than others and expensive cars are more likely to be stolen. You need to check these factors before purchasing car insurance.
Why compare Car Insurance Quotes

Your ZIP code can matter just as much as your driving record when an insurer calculates your rate. Two drivers with identical histories living just a few miles apart — one in a rural area and one in a dense urban corridor — can see premium differences of thirty percent or more on the same policy,

says Marcus T. Webb, CPCU, Senior Insurance Analyst at the Insurance Research Council.

While the preferred choice among insurance quotes would be the lowest rate, it may not be the best choice for your needs. Minimum liability coverage could result in your paying a high amount when an accident occurs. Full coverage will minimize your out-of-pocket payments for damage or injury caused by you. Coverage types that you may require include uninsured motorist insurance that will pay for your injuries or damage to your car if the other motorist does not have insurance or enough insurance — the Insurance Information Institute estimates that roughly 1 in 8 U.S. drivers is uninsured. Collision insurance covers repair costs for your damaged car. Comprehensive insurance covers loss caused by theft, floods, climate-related damage, vandalism, or collision with animals. You may also choose to pay high deductibles or out-of-pocket amounts when you claim for repair costs and this will lower your premiums. You can compare insurance company quotes and get the most affordable coverage for your specific needs.

How to Compare Car Insurance Quotes
Car insurance rates differ from state to state and insurance company to insurance company. There are two ways to get car insurance quotes. You can call the insurance company and give them the details they require and get a free car insurance quote. There are also many insurance comparison websites such as The Zebra, Insurify, and NerdWallet. These websites have a tool that will give you quotes from many insurance companies in a few minutes. You need to enter details of your state, your credit and driving history, the make and model of your car, and the amount of coverage you require. The tool will give you quotes from a choice of insurance companies. You can shortlist and call the companies offering policies with the best coverage. The Consumer Reports car insurance buying guide recommends getting at least three to five quotes before making a final purchasing decision.

Car Insurance Coverage Types Compared

Coverage Type	What It Covers	Average Annual Cost (U.S.)	Required by Law?	Typical Deductible Range
Liability (Bodily Injury)	Injuries to others caused by you in an accident	$620/year	Yes, in 49 states	$0 (no deductible)
Liability (Property Damage)	Damage to another person’s vehicle or property	$270/year	Yes, in 49 states	$0 (no deductible)
Collision	Repair or replacement of your own vehicle after a crash	$380/year	No (required by lenders)	$250–$2,000
Comprehensive	Theft, weather, vandalism, animal collision	$190/year	No (required by lenders)	$100–$1,500
Uninsured/Underinsured Motorist	Your injuries and damages when at-fault driver is uninsured	$100/year	Required in 22 states	$0–$250
Personal Injury Protection (PIP)	Medical bills and lost wages regardless of fault	$120/year	Required in 12 no-fault states	$0–$500

Cost estimates sourced from NerdWallet’s 2025 car insurance data. Individual rates vary based on driver profile, state, and insurer.

Comparing car insurance rates offered by different insurance providers is prudent because you can pay an affordable premium while making sure that the insurance coverage will pay for damage and injury in the event your car meets with an accident. The Insurance Information Institute also recommends reviewing your policy at least once per year and whenever you experience a major life change — such as moving, adding a driver, or paying off a car loan — to ensure you are not over-paying or under-insured.

Frequently Asked Questions

What is the best way to get a lower car insurance rate?

The best way to lower your car insurance rate is to compare quotes from at least three to five different insurers before purchasing or renewing a policy. In addition, maintaining a clean driving record, improving your FICO Score, raising your deductible, and bundling auto insurance with homeowners or renters insurance through the same company can each reduce your premium. According to the Insurance Information Institute, bundling alone can save drivers between 5% and 25% on their total insurance costs.

How much car insurance do I legally need in the United States?

In 49 out of 50 U.S. states, you are legally required to carry a minimum level of liability insurance. The specific minimum limits vary by state — for example, California requires at least 15/30/5 (meaning $15,000 bodily injury per person, $30,000 per accident, and $5,000 property damage), while Texas requires 30/60/25. New Hampshire is the only state that does not mandate insurance, provided you can demonstrate financial responsibility. You can verify your state’s minimums through the NAIC or your state’s department of motor vehicles.

Does my credit score affect my car insurance premium?

Yes, in most U.S. states, insurers use an insurance-based credit score — a specialized scoring model distinct from your standard FICO Score — to help calculate your premium. Drivers with poor credit can pay up to 76% more than drivers with excellent credit for the same coverage, according to Consumer Reports. California, Hawaii, Massachusetts, and Michigan currently prohibit insurers from using credit scores to set auto insurance rates.

What is the difference between collision and comprehensive insurance?

Collision insurance pays for damage to your vehicle resulting from a crash with another car or object, regardless of fault. Comprehensive insurance pays for damage caused by non-collision events such as theft, vandalism, flooding, hail, fire, or hitting an animal. Both coverage types are optional under state law but are typically required by lenders such as Chase Auto or other financing institutions if you have an active car loan or lease.

What is an insurance deductible and how does it affect my premium?

A deductible is the out-of-pocket amount you agree to pay toward a covered claim before your insurance company pays the remainder. Choosing a higher deductible — for example, $1,000 instead of $500 — typically lowers your annual premium because you are accepting more financial risk. According to the Insurance Information Institute, increasing your deductible from $200 to $500 can reduce comprehensive and collision costs by 15% to 30%, and moving to a $1,000 deductible can save 40% or more.

What does uninsured motorist coverage pay for?

Uninsured motorist (UM) coverage pays for your medical expenses and, in some policies, damage to your vehicle if you are hit by a driver who has no insurance or insufficient insurance to cover your losses. Roughly 1 in 8 U.S. drivers is uninsured, according to the Insurance Information Institute. Underinsured motorist (UIM) coverage extends similar protection when the at-fault driver’s liability limits are too low to fully compensate you.

How often should I compare car insurance quotes?

You should compare car insurance quotes at least once per year, typically before your policy renewal date. You should also compare quotes after major life events such as moving to a new address, adding or removing a driver from your policy, purchasing a new vehicle, or significantly improving your credit score. Insurers adjust their pricing models regularly, so a company that was not competitive last year may offer the best rate today.

Are online car insurance comparison tools accurate?

Online comparison tools from sites such as The Zebra, Insurify, and NerdWallet provide real-time or near-real-time estimates based on the information you enter. The quotes are generally accurate starting points, but your final premium may differ slightly after the insurer verifies your driving record, credit history, and vehicle information. These tools are a reliable and fast way to identify which insurers are likely to offer you the most competitive rates before you make a direct call or application.

Can a teen driver lower their car insurance premium?

Yes. Teen drivers aged 16 to 19 pay the highest premiums of any age group, but there are ways to reduce the cost. Adding a teen to a parent’s existing policy is almost always cheaper than a standalone policy. Many insurers offer a good student discount — typically 8% to 25% — for teens who maintain a B average or higher. Completing a state-approved defensive driving course can also qualify for an additional discount through insurers such as State Farm, Geico, and Progressive.

What information do I need to get a car insurance quote?

To get an accurate car insurance quote, you will typically need your driver’s license number, the vehicle identification number (VIN) or the year, make, and model of your car, your current address, an estimate of your annual mileage, information about your driving history (accidents or violations in the past three to five years), and the coverage types and limits you want. Having this information ready speeds up the process significantly whether you are calling an insurer directly or using an online comparison tool.

Sources

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