How to Reduce Your Car Insurance Costs

• Ten Ways to Reduce Car Insurance Costs
• Reduce Your Costs by Comparing the Cheapest Insurers for Most Drivers
• What Makes Car Insurance More Expensive?
• How to Find Cheap Insurance in Your State
• Average Rates by Driving and Credit History
• Tips for Comparing Companies and Quotes
• Frequently Asked Questions

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 calculator 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.

If you’ve wondered how often to shop for car insurance, MoneyGeek recommends comparing quotes every year.

Insurance providers offer different types of car insurance discounts. Among the most common money-saving opportunities are multi-car policy and good driving discounts. Seeking other available discounts can further lower your car insurance costs.

• Bundling: Purchasing two types of insurance from the same carrier — typically home and auto.
• Safe driving: Maintaining a clean driving record for a certain number of years.
• Good student: For students with good academic standing.
• Anti-theft: Having anti-theft devices installed in the car.
• Defensive driving: Completing a state-approved course can help you get defensive driving discounts.

These are only some of the most common discounts insurers tend to offer. However, not all of the above are offered by all insurers. And some companies may offer additional discounts. So it’s best to consult your agent or insurer to determine the discounts you may be eligible for.

Another easy way to reduce car insurance costs is by raising your car insurance deductible. This refers to a set amount you’d have to pay out of pocket when filing a claim.

The following coverages may include deductibles:

• Comprehensive: The deductible for comprehensive coverage is typically less than that for collision coverage.
• Collision: The deductible for collision coverage is usually the highest in a policy. If another party is at fault, you may not need to pay a collision deductible.
• Personal Injury Protection (PIP) and Uninsured Motorist: Some car insurance policies include deductibles for PIP and uninsured motorist insurance. Others don’t require it.

If you can afford to pay more out of pocket in the event of a claim, you may opt to have a higher deductible. This will lower your car insurance premium.

Your car insurance needs may change over time, so it’s important to periodically evaluate your coverage to see if it’s still suitable for you. In some cases, changing your coverage can lead to lower premiums. For instance, your auto lender may have required you to purchase full coverage if you have a lease or loan. Once you pay off your car, you may opt out of getting full coverage insurance. But if you prefer to maintain this type of insurance, there are ways to find cheap full coverage policies.

Taking some time to review how much coverage you need can help lower car insurance rates. However, it’s best to consult with your agent or provider first before changing your coverage. This way, you can ensure that you’re getting the right protection based on your needs and circumstances.

Getting different insurance policies from the same carrier can make you eligible for a significant discount. Many companies offer rewards for policyholders who choose them for their various insurance needs. For example, you can get lower car insurance rates by bundling your car and home insurance.

Completing a defensive driving course can help lower your insurance rates. You typically must have a clean driving record (no accidents or moving violations) for at least the last three years to qualify for this discount.

Once you complete the course, make sure you submit a confirmation of completion to apply for a discount. That said, qualification requirements and rules may vary per insurer.

Many car insurance companies now offer telematics 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.

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.

A driving violation can stay on your record for a long time. Specific periods vary per state. For instance, a violation, conviction or point will remain on your driving record for up to four years in New York. Meanwhile, a collision or DUI conviction will stay on your driving record for up to three years in California. And in several states, a DUI can stay on your record permanently.

Your credit history can affect the cost of your car insurance. Generally, individuals with bad credit tend to receive higher quotes than those with good credit because they are considered a higher risk to file claims. That said, there are ways to improve your credit score.

The first and simplest step you can take is to check your credit report for mistakes and errors. Although it may not happen often, you may find an error that has resulted in a lower credit score. You can also improve your credit score with the help of the following strategies:

• Make on-time payments to creditors.
• Pay down your debt.
• Ask for higher credit card limits.
• Be an authorized user for a trusted relative or friend with a good or excellent credit score.

A good credit-based insurance score can help you find lower car insurance rates. So making an effort to improve your score can benefit you.

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. For example, a 2020 Honda CR-V is the cheapest car to insure at an average of $1,172 per year.

Many factors are used to determine your car insurance rate, including your location, driving record and even credit history. Knowing which companies provide affordable coverage can help you find the best rates for your needs.

Of the companies widely available across the country:

• State Farm is the cheapest car insurance company for a full coverage policy, with an average rate of $883 per year. It also offers the lowest average rate for a state minimum liability-only policy at $409 per year.

The table below shows national average rates for full coverage with 100/300/100 coverage limits and liability-only insurance for different age groups.

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

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.

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.

Note that these companies offer the cheapest based on average rates. Actual individual rates may vary depending on your profile. Comparing premiums from multiple providers can help you find the most affordable coverage for your needs.

States have specific regulations on car insurance. Thus, minimum insurance requirements may vary. The companies offering different coverage types and insurance premiums also differ per location.

Find your state in the table below to see the cheapest rates for full and minimum coverage policies in your area.

Car insurance providers use various factors when calculating insurance premiums. Although your driver history and credit-based insurance score may raise your premiums, they can also help in lowering car insurance costs.

The average cost of car insurance varies depending on individual factors. A person's 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. That said, many insurers offer accident forgiveness coverage, which may help keep your insurance rate from increasing after your first at-fault accident. So speak with your insurer about whether they offer this coverage or other discounts. You can also shop around with other insurers. 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.

Use the table below to find the average car insurance rates for you based on your driving record, preferred coverage and age.

When evaluating drivers for car insurance rates, car insurance companies look at a driver’s credit history to help determine how risky that driver is. Actuarial studies show that how a person manages their financial affairs is a good predictor of insurance claims. Statistically, consumers with a low insurance score are more likely to file a claim. Therefore, if you keep up a high credit score, you can receive lower car insurance costs. State Farm and USAA both offer affordable premiums, but with USAA, the coverage is limited to military families only.

Navigate the table below and see how much your car insurance may cost based on your credit, preferred coverage and age.

Due to escalating loss costs and other negative factors, many insurers are increasing their average rates across the U.S. To make sure you’re getting the best deal possible, shop around for car insurance once a year.

Yearly improvements to your credit score may help you get more affordable premiums. Or, if your score dips, shopping around will increase your chances of finding the best policy (even with bad credit).

Knowing money-saving strategies can help reduce your car insurance costs. MoneyGeek answers some commonly asked questions to help you get started.