How To Reduce Your Car Insurance Costs

Everyone can benefit from lower car insurance costs, but coverage doesn't come cheap without a little time and effort. MoneyGeek found that certain strategies can help you save hundreds of dollars per year.

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Insurance Rates

Ensure you're getting the best rate for your auto insurance. Compare quotes from the top insurance companies.

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Last Updated: 11/25/2022
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To reduce car insurance costs, drivers need to maintain a clean driving record, sustain a high credit score and shop around for personalized quotes from at least three car insurance companies. These tasks could go a long way in finding and receiving lower costs on your car insurance.

Key Takeaways

Improve your credit score to help reduce car insurance costs.

Evaluate your coverage to make sure you pay only for what you really need.

Bundle your car and homeowners insurance for additional savings.

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Methodology

Why Trust MoneyGeek? We compared premiums from a range of car insurance companies across the U.S., including data from state insurance departments and Quadrant Information Services, to give you an idea of how much you can expect to pay for car insurance coverage. Our insights on how to reduce your car insurance costs are guided by the Insurance Information Institute.

83,056

Quotes Analyzed

 
46

Companies Compared

 
473

Zip Codes

Why Is My Car Insurance So High?

Car insurance companies evaluate several factors when determining how much your car insurance premiums will be. These include:

  • Age: Middle-age drivers usually receive the lowest rates, while newer drivers tend to pay more. Teens are particularly costly to insure with an individual policy, so adding a young driver to an existing family policy can help you save.
  • Driving record: A clean driving record will garner lower costs than a driving record with a speeding ticket, accident or DUI.
  • Type of vehicle: Cars such as sedans are seen as lower risk than a vehicle like a sports car.
  • Credit score: The higher your credit score, the better your rates tend to be. In many states, car insurance companies use credit score to determine a driver's likelihood of paying premiums and filing a claim.
  • Location: Where you live is evaluated for its risk level for filing a claim, leading to higher or lower costs. Location-specific factors such as the number of accidents and vehicle thefts in the area, along with the presence of dangerous intersections, can all play a role in your car insurance cost.

While these personalized factors contribute to how much you pay for car insurance, it’s also possible you may be paying for coverage you don’t need. For instance, if you just bought a new car, many financing companies will require you to carry full coverage. However, if your vehicle is paid off, you may no longer need full coverage, particularly if your car has substantially depreciated.

To determine how much you could pay for car insurance, enter your personal factors in our quote tool to receive an estimated rate for car insurance.

10 Ways to Lower Your Car Insurance Costs

There are several steps you can take to reduce your car insurance costs. These range from shopping around for quotes and boosting your credit score to changing the type and amount of coverage you carry. Some steps can be implemented quickly, while others will take some time to affect your car insurance rates.

1. Shop Around for Quotes

The quickest and easiest way to reduce car insurance costs is to shop around with at least three car insurance companies. This can be less time consuming if you take advantage of online car insurance comparison tools that can estimate the costs of several providers at once. While car insurance companies look at a number of the same factors for each driver, how they evaluate those factors varies, which could lead to lower car insurance costs for you. To ensure you receive comparable quotes, you should provide the same personalized information to each company you speak with and seek out quotes on the same day.

2. Seek Out All Available Discounts

While you may be aware of some of the discounts offered by car insurance companies such as multi-car policy discounts or good driving discounts, some companies also offer discounts for owning a car with anti-theft devices or specific safety features. They may also offer discounts if you drive a reduced amount of mileage each year or set up an automatic payment for your premium. Talk to the car insurance agent to determine what discounts are available to you for lower car insurance costs.

3. Boost Your Credit Score

If your credit score could use some improvement, start by looking at your credit report to make sure it’s accurate. Mistakes are found on credit reports sometimes, and simply removing them can raise your credit score. Other ways to improve your credit score include making on-time payments to creditors, paying down debt so you use less than 20% of your available credit and not opening new accounts. As your credit score improves, you could see lower car insurance costs.

4. Sign Up for Driver-Monitored Savings

Many car insurance companies now offer programs designed to lower your car insurance costs based on your driving habits. They monitor your daily driving through technology installed in your car or via your smartphone. Examples include State Farm’s Drive Safe and Save™ program and Progressive’s Snapshot program.

5. Improve Your Driving Record

Suppose you already have a speeding ticket, DUI or moving violation for distracted driving on your driving record. In that case, there’s not much you can do to change it except wait for time to render those events less relevant when evaluating your driving history. What you can do is take steps to make sure you don’t receive additional speeding tickets, DUIs or moving violations that could further negatively impact your car insurance rates.

6. Change Your Coverage

It’s important to periodically evaluate the car insurance coverage you have to see if it’s what you still need. For instance, if you purchase a new car, the car loan lender may require you to carry full coverage. However, if your vehicle is paid off and several years old, that full coverage may not be necessary any longer, leading to lower costs. Review how much coverage you need, and seek personalized quotes from at least three companies for that coverage.

7. Raise Your Deductible

Another quick and easy way to reduce car insurance costs is by raising your deductible. If you can afford to pay a higher deductible in the event of filing a claim, you will see lower car insurance costs for your premium.

8. Bundle Your Car and Homeowners Insurance

Insurance companies love to have as much of your business as possible and will reward you for coming to them for all of your insurance needs. By bundling your car and homeowners insurance, insuring more than one vehicle on the same policy or combining your car and renters insurance, you could receive lower costs on your car insurance rates.

9. Swap Out Your Car

The type of vehicle you drive also is considered by car insurance companies when determining your car insurance rates. They look at such factors as the car’s safety record, how likely it is to be stolen and the cost to repair it in the event of an accident. Vehicles like sedans or minivans usually are seen as less risky than sports cars or luxury cars.

10. Take a Defensive Driving Course

Completing a defensive driving course could improve your driving skills, which could make you a lower risk for car insurance companies to cover. Many car insurance companies offer a discount after you complete a certified defensive driving course and submit confirmation of your completion.

The Cheapest Car Insurance Companies for Most Drivers

Many factors are used to determine your car insurance rate, including your location, driving record and even credit score. Knowing which companies provide affordable coverage can help you find the best rates for your needs. These three companies offer the lowest premiums for the average driver.

USAA

Overall, USAA offers the lowest car insurance rates, even for drivers with tickets or accidents on their record. However, because USAA is only available to military members, veterans and their families, these lower rates are not available to most drivers.

GEICO

GEICO is widely available and provides a range of coverage options to drivers across the country. Review GEICO's available discounts to find the best deal for your needs.

State Farm

State Farm offers affordable rates, reputable customer service and a variety of insurance plans. Customers also have a range of bundling and additional coverage options, including home, renters, life, health insurance, small business and disability insurance.

Comparing Average Car Insurance Costs

The average cost of car insurance varies depending on individual factors. Driving record plays a significant role for most insurance companies when determining annual premiums. In general, drivers with no violations on their record can expect to pay the lowest premiums, while drivers with a DUI can expect to pay the most. An accident or ticket can also raise your rates, so speak with your insurer about discount options or shop around if you've recently received a ticket or were found at-fault for an accident. If it's been several years since you've gotten a ticket or been at fault for an accident, you may be able to lower your rates.

Average Car Insurance Rates Based on Driving Record

Driving Record
Annual Premium

No Violations

$1,379

Speeding Ticket

$1,779

Accident (at fault)

$2,174

DUI

$2,880

When evaluating drivers for car insurance rates, car insurance companies look at credit scores to help determine how risky that driver is. The conventional wisdom is that if people are careful with their credit score, they are more careful behind the wheel, and the higher the credit score, the lower risk the driver will be for filing a claim. Therefore, if you keep up a high credit score, you can receive lower car insurance costs.

Comparing Car Insurance Based on Credit Score

Credit Score
Annual Premium

Excellent (823+)

$1,071

Good (769-794)

$1,333

Fair (710-740)

$1,647

Below Fair (628-671)

$2,012

Poor (524-577)

$2,544

How to Find Cheap Car Insurance in Your State

Car insurance costs vary by location, so getting a customized quote for your city and state can help you better compare rates in your area. While many large providers offer coverage in most states, regional insurers may provide lower rates. Find the cheapest car insurance provider in your state from the list below. While these companies are the cheapest on average, your individual rates may vary, so comparing premiums from a variety of providers can help you find the most affordable coverage for your needs.

Find Cheap Car Insurance by State

AlabamaGEICO is the cheapest in AL

AlaskaGEICO is the cheapest in AK

ArizonaGEICO is the cheapest in AZ

ArkansasSouthern Farm Bureau is the cheapest in AR

CaliforniaEsurance is the cheapest in CA

ColoradoGEICO is the cheapest in CO

ConnecticutGEICO is the cheapest in CT

DelawareState Farm is the cheapest in DE

District Of ColumbiaGEICO is the cheapest in DC

FloridaGEICO is the cheapest in FL

GeorgiaNationwide is the cheapest in GA

HawaiiGEICO is the cheapest in HI

IdahoState Farm is the cheapest in ID

IllinoisGEICO is the cheapest in IL

IndianaErie is the cheapest in IN

IowaGEICO is the cheapest in IA

KansasAmerican Family is the cheapest in KS
KentuckyState Farm is the cheapest in KY

LouisianaSouthern Farm Bureau is the cheapest in LA

MaineGEICO is the cheapest in ME

MarylandErie is the cheapest in MD

MassachusettsSafety Group is the cheapest in MA

MichiganGEICO is the cheapest in MI

MinnesotaFarmers is the cheapest in MN

MississippiTravelers is the cheapest in MS

MissouriAllstate is the cheapest in MO

MontanaState Farm is the cheapest in MT

NebraskaGEICO is the cheapest in NE

NevadaGEICO is the cheapest in NV

New HampshireProgressive is the cheapest in NH

New JerseyGEICO is the cheapest in NJ

New MexicoMetLife is the cheapest in NM

New YorkGEICO is the cheapest in NY

North CarolinaNationwide is the cheapest in NC

North DakotaNodak Mutual is the cheapest in ND
OhioGEICO is the cheapest in OH

OklahomaGEICO is the cheapest in OK

OregonGEICO is the cheapest in OR

PennsylvaniaErie is the cheapest in PA

Rhode IslandState Farm is the cheapest in RI

South CarolinaGEICO is the cheapest in SC

South DakotaState Farm is the cheapest in SD

TennesseeGEICO is the cheapest in TN

TexasFarmers is the cheapest in TX

UtahGEICO is the cheapest in UT

VermontVermont Mutual is the cheapest in VT

VirginiaProgressive is the cheapest in VA

WashingtonPEMCO is the cheapest in WA

West VirginiaErie is the cheapest in WV

WisconsinGEICO is the cheapest in WI

WyomingState Farm is the cheapest in WY
AlabamaGEICO is the cheapest in AL

AlaskaGEICO is the cheapest in AK

ArizonaGEICO is the cheapest in AZ

ArkansasSouthern Farm Bureau is the cheapest in AR

CaliforniaEsurance is the cheapest in CA

ColoradoGEICO is the cheapest in CO

ConnecticutGEICO is the cheapest in CT

DelawareState Farm is the cheapest in DE

District Of ColumbiaGEICO is the cheapest in DC

FloridaGEICO is the cheapest in FL

GeorgiaNationwide is the cheapest in GA

HawaiiGEICO is the cheapest in HI

IdahoState Farm is the cheapest in ID

IllinoisGEICO is the cheapest in IL

IndianaErie is the cheapest in IN

IowaGEICO is the cheapest in IA

KansasAmerican Family is the cheapest in KS

KentuckyState Farm is the cheapest in KY

LouisianaSouthern Farm Bureau is the cheapest in LA

MaineGEICO is the cheapest in ME

MarylandErie is the cheapest in MD

MassachusettsSafety Group is the cheapest in MA

MichiganGEICO is the cheapest in MI

MinnesotaFarmers is the cheapest in MN

MississippiTravelers is the cheapest in MS

MissouriAllstate is the cheapest in MO
MontanaState Farm is the cheapest in MT

NebraskaGEICO is the cheapest in NE

NevadaGEICO is the cheapest in NV

New HampshireProgressive is the cheapest in NH

New JerseyGEICO is the cheapest in NJ

New MexicoMetLife is the cheapest in NM

New YorkGEICO is the cheapest in NY

North CarolinaNationwide is the cheapest in NC

North DakotaNodak Mutual is the cheapest in ND

OhioGEICO is the cheapest in OH

OklahomaGEICO is the cheapest in OK

OregonGEICO is the cheapest in OR

PennsylvaniaErie is the cheapest in PA

Rhode IslandState Farm is the cheapest in RI

South CarolinaGEICO is the cheapest in SC

South DakotaState Farm is the cheapest in SD

TennesseeGEICO is the cheapest in TN

TexasFarmers is the cheapest in TX

UtahGEICO is the cheapest in UT

VermontVermont Mutual is the cheapest in VT

VirginiaProgressive is the cheapest in VA

WashingtonPEMCO is the cheapest in WA

West VirginiaErie is the cheapest in WV

WisconsinGEICO is the cheapest in WI

WyomingState Farm is the cheapest in WY
AlabamaGEICO is the cheapest in AL

AlaskaGEICO is the cheapest in AK

ArizonaGEICO is the cheapest in AZ

ArkansasSouthern Farm Bureau is the cheapest in AR

CaliforniaEsurance is the cheapest in CA

ColoradoGEICO is the cheapest in CO

ConnecticutGEICO is the cheapest in CT

DelawareState Farm is the cheapest in DE

District Of ColumbiaGEICO is the cheapest in DC

FloridaGEICO is the cheapest in FL

Tips for Comparing Car Insurance Quotes and Companies to Reduce Costs

One of the best ways to reduce car insurance costs is shopping around for personalized quotes from at least three different car insurance companies. When comparing quotes, you want to look at the coverage, see how much the deductible is and evaluate available discounts.

  1. Make sure the car insurance quote is for the same coverage across the board. Liability versus full coverage or even varying amounts on full coverage policies can result in different quotes. The quote should be for the same type of coverage to ensure they are comparable.
  2. Look at the available deductibles for the coverage in your insurance quote. Raising the deductible could result in lower costs.
  3. Ask about all available discounts offered by each car insurance company. These can dramatically reduce car insurance costs.
  4. Remember to ask for and compare quotes on the same day. Insurance rates fluctuate frequently, so you want to get quotes at the same time to ensure a fair comparison.
Insurance Rates

Compare Auto Insurance Rates

Ensure you are getting the best rate for your car insurance. Compare quotes from the top insurance companies.

widget-location-pin

Saving money on your car insurance is possible with a little time and effort. Start by shopping around for car insurance quotes, and check out the various ways you can reduce your car insurance costs. You could receive lower costs before your next premium is due.

Related Car Insurance Topics

About the Author


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A long-time freelance writer, Karon Warren has covered finance, insurance, health care, business, travel and other topics for such outlets as Lending Tree, Student Loan Hero, Healthgrades, USA Today and others.


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