How to Lower Your Car Insurance Rate and Save Money

You can lower insurance rates by combining several proven strategies. Seeking discounts like bundling policies and maintaining a clean driving record can reduce premiums by 10% to 40%. Raising your deductible from $500 to $1,000 can cut costs by 15% to 20%. Shopping around remains one of the most effective tactics, with drivers saving an average of $300 to $800 annually by switching insurers.

Estimated Annual Savings: $200 to $800

Compare quotes from at least three insurers using tools like MoneyGeek's car insurance calculator. Since insurers weigh risk factors differently, your rate can vary, so get quotes on the same day for accurate comparisons and shop for car insurance annually for the best rates.

Estimated Annual Savings: $330 to $900

Bundling your car and home insurance policies provides substantial discounts. State Farm offers the largest discount at 25%, followed by Farmers at 17% and Nationwide at 15%. State Farm's bundle saves customers about $847 per year compared to buying separate policies.

Estimated Annual Savings: $50 to $400

Most insurers offer discounts that can reduce your premium by up to 30%. Common discounts include:

• Safe driving: Maintain a clean driving record for multiple years.
• Good student: Earn discounts for good academic performance.
• Anti-theft devices: Install qualifying anti-theft devices in your vehicle ($50 to $150 savings).
• Defensive driving: Complete a state-approved course to qualify.
• Occupation-based discounts: Teachers, military members and other professionals may qualify ($100 to $500 savings).
• Senior discounts: These are available for drivers 55+ ($100 to $400 savings)
• Pay-in-full discount: Pay your annual premium at once ($50 to $200 savings).

Estimated Annual Savings: $150 to $400

Raising your car insurance deductible (the amount you pay out of pocket before coverage starts) is a straightforward way to reduce your premium. Increasing deductibles from $500 to $1,000 can reduce premiums by 15% to 20%, but make sure you have enough savings to cover it in case of an accident.

Deductibles may apply to these coverages:

• Comprehensive coverage: Usually has a lower deductible than collision
• Collision coverage: Typically carries the highest deductible; often waived if you're not at fault
• PIP and uninsured motorist coverage: May or may not include a deductible, depending on your policy

Deductibles only apply to comprehensive and collision coverage, not liability coverage.

Estimated Annual Savings: $300 to $1,361

Families with multiple vehicles can save by insuring all cars under one policy. Farmers offers the industry's highest discount at 48%, potentially saving families over $1,361 annually, while the average household saves about $500 annually by bundling coverage.

Estimated Annual Savings: $100 to $500

As your situation changes, your coverage should too. If you've paid off your car, consider dropping comprehensive and collision coverage, especially if your car's value is low. Use our coverage calculator to determine how much coverage you need.

Estimated Annual Savings: $300 to $1,000

Violations like speeding, DUI or distracted driving can raise your insurance costs for years. While you can't erase past mistakes, avoiding new violations helps prevent further rate increases.

How long violations affect your record:

• Minor violations (speeding tickets): Three to five years
• Major violations (DUI, reckless driving): Up to 10 years
• At-fault accidents: Three to five years

A poor credit history can raise your car insurance rates, while a good credit score helps reduce them. Check your credit report for errors that can hurt your score.

Improve your credit by:

• Making on-time payments
• Paying down debt
• Requesting higher credit limits
• Becoming an authorized user on a trusted account

A stronger credit-based insurance score signals lower risk to insurers and may lead to cheaper premiums.

Some states prohibit or limit the use of credit scores in insurance pricing. Check your state's regulations.

Estimated Annual Savings: $150 to $600

Some insurance companies offer telematics programs that track your driving habits and reward you with lower rates for safe behavior. These programs can save up to 40% on your premiums, like State Farm's Drive Safe and Save™ and Progressive's Snapshot.

Estimated Annual Savings: $200 to $600

Pay-per-mile insurance can save you money if you drive less than 12,000 miles per year. This option works well for people who work from home, use public transportation or don't drive often.

Estimated Annual Savings: $50 to $1,000+

Your car's make and model choice impacts your insurance rates. Insurers consider safety ratings, repair costs and theft risk, which is why sedans and minivans often cost less to insure than sports or luxury vehicles. For instance, a 2020 Honda CR-V is among the cheapest cars to insure, averaging just $1,172 annually.

Even with these factors, you could pay for coverage you no longer need. For example, full coverage may be required when financing a car. But once it’s paid off, you might choose to reduce coverage, especially if your car has depreciated. Use our quote tool to get a personalized estimate based on your location, driving history and more.

Factors such as your location, driving history and credit score all influence how much you'll pay for car insurance. Knowing which companies consistently offer affordable rates can help you find the best deal for your needs.

State Farm offers the lowest average rates nationwide: $883 for full coverage and $409 for minimum liability.

The table below shows national average rates for full coverage (100/300/100 limits) and liability-only policies across different age groups.

States have specific regulations on car insurance, so minimum insurance requirements may vary. Companies offering different coverage types and insurance premiums also differ by location.

The table below shows the cheapest rates for full and minimum coverage policies in your state.

Your driving history is one of the most important factors determining your rates. Clean records get the lowest premiums, while violations like accidents, speeding tickets or DUIs result in much higher costs.

Some insurers offer accident forgiveness to prevent premium increases after your first at-fault accident. If you have past violations, maintain a clean record and shop around to reduce rates over time. The table below shows how your driving record affects average costs.

Your credit history impacts how much you pay for car insurance. Insurers use credit-based insurance scores to assess financial responsibility, and drivers with poor credit face higher premiums. A strong credit score helps you qualify for lower rates. The table below shows how credit affects car insurance costs by age and coverage level.

Multiple factors affect car insurance costs, including age, location and vehicle type. You can save money by improving your driver profile, taking advantage of discounts, adjusting coverage and maintaining a clean driving record.

We answered some common questions about lowering car insurance rates below to help you get started:

MoneyGeek analyzed car insurance rates and cost-reduction strategies across the U.S., using data from state insurance departments and Quadrant Information Services to identify the most effective ways to lower your premiums.

Study Overview

We analyzed 529,578 insurance quotes from 67 companies across 897 ZIP codes to determine the average savings potential for each cost-reduction strategy. Our research included contacting insurance companies to verify discount availability and savings ranges.

Savings Analysis

We calculated potential annual savings by comparing baseline and discounted rates for each strategy. Savings estimates reflect real-world data from multiple driver profiles and coverage scenarios, including:

• Clean driving records vs. drivers with violations
• Different age groups and credit scores
• Various coverage levels and deductible amounts
• Bundled vs. separate policy pricing

Driver Profiles

We collected data for multiple driver profiles to ensure accurate savings estimates:

• Single drivers aged 25, 40 and 65
• Married couples with clean records
• Families with teen drivers
• Drivers with accident history involving $1,000 to $1,999 in property damage

Coverage Levels and Deductibles Explained

Our analysis used standard coverage levels to ensure consistent comparisons. Full coverage includes liability (required in almost every state) plus comprehensive and collision coverage.

Comprehensive covers events beyond your control, like theft, fire or weather damage. Collision pays for damage when your vehicle hits another vehicle or object, or rolls over. Both have deductibles, typically $500 or $1,000 (the amount you pay before insurance covers the rest).

For example, 100/300/100 liability coverage means:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $100,000 property damage liability

When referencing state minimum coverage, we used the minimum required in each state. Savings percentages apply to full and minimum coverage policies unless otherwise specified.