How to Get the Cheapest Car Insurance in 10 Steps

Auto insurance can help protect you financially from unforeseen damages to your vehicle. But certain factors — like having tickets or accidents on record — can drive up premium costs. Fortunately, there are still ways to get cheap affordable insurance.

By  
  |  

The average cost of car insurance across the country for good drivers with 100/300/100 liability insurance and comprehensive and collision coverage is $1,424 per year.

However, actual insurance premiums vary depending on different factors like your driver profile, location and vehicle. For instance, the annual cost of a policy for teen drivers averages $5,318. Meanwhile, drivers with a driving under the influence (DUI) charge on record pay an average of $2,879 annually.

Insurance can be expensive for certain types of drivers. However, you can still find an affordable policy with these ways to get the cheapest car insurance.

10 Steps to Cheaper Car Insurance:
Key Takeaways

car

The average cost of car insurance in the country is $1,424 per year, but rates can be two, three or even four times more for some drivers, like teenagers or those with DUIs.

computer

Auto insurance rates vary depending on the individual and the insurance provider, so shopping around and comparing rates may help save money.

coins

Weighing your options for coverage — such as your deductibles and limits — and considering your needs as a driver can also help you find cheap affordable insurance.

Loading...

How to Get Cheap Car Insurance

Having auto insurance provides financial protection when you’re driving, and state laws almost always require vehicle owners and drivers to maintain a policy. However, with other financial obligations and daily expenses, some people may find insurance costly. Knowing how to get cheap car insurance can help reduce your monthly premiums while ensuring that you’re well-protected from unexpected costs.

MoneyGeek’s list of ten ways to get auto insurance for less can help you save money and find the best policy for your needs.

1. Shop Around at Least Once per Year

Shop around and compare quotes for a new auto insurance policy before your renewal date or at least once every year. In doing so, you get more leverage with your current insurer and avoid the rate increases that can come with using the same insurer year after year.

Prices may also drop or increase significantly from year to year. For instance, the average cost of auto insurance went up $28 from 2020 to 2021. Over time, these price hikes can add up.

2. Skip Collision or Comprehensive Coverage on Older Vehicles

Collision coverage ensures better protection for drivers because it pays for damages to your vehicle after a collision. Comprehensive coverage takes care of expenses related to perils like theft, vandalism and natural disasters. However, if you have an older car or one with low value that would be easy to replace, you may want to skip these coverages. Carrying a liability-only policy significantly lowers the cost of your premiums.

The table below shows how dramatically insurance prices vary by coverage level. These rates are based on average costs for liability-only and comprehensive and collision insurance for the average driver.

Average Yearly Premiums By Coverage Type
  • Coverage Type
    Average Cost
  • State Minimum
    $674
  • 50/100/50 Liability-Only
    $898
  • 50/100/50 with Comprehensive and Collision
    $1,311

3. Bundle Your Coverage

If you have other insurance policies — such as homeowners or renters —consider purchasing them from the same provider as your auto coverage. MoneyGeek found that the average cost of unbundled home and auto insurance policies is $3,288 per year, while those who bundle these policies spend $2,738 for the same coverage. Customers with home and auto bundles see substantial savings, with the average discount across all insurers at 17%.

4. Take Advantage of Discounts

For some drivers, getting discounts is the best way to get cheap affordable insurance. Some of the most common savings opportunities are awarded for insuring multiple vehicles, installing safety equipment and maintaining a safe driving record. There are many different car insurance discounts available, but keep in mind that not every company offers the same deals. For instance, you can get up to a 22% discount from Allstate and Progressive for insuring more than one car, while GEICO offers only an 18% discount.

The table below outlines some of the most common categories of car insurance discounts.

Categories of Car Insurance Discounts
  • Discount Type
    Description
  • Driver Profile
    This type of discount considers individualized factors, such as the policyholder’s age, level of education and years of being insured with one carrier.
  • Payment
    How you pay for your premiums and receive documents can help you save money. Some companies offer discounts for policyholders who opt to go paperless, sign up online or schedule automatic payments. Paying in full instead of installments can also earn you a reduced rate.
  • Vehicle Equipment
    Newer vehicles are cheaper to insure. If you add certain features like anti-theft and stability controls, you can lower your premiums.
  • Driver History
    Your driving record also affects your premium. Insurance carriers may evaluate your claims history and driving records to determine your eligibility for these discounts.
  • Policy
    Having multiple policies with the same provider can help you score significant discounts. Insurers may offer bundling discounts or saving opportunities if you also purchase home or renters insurance from them. You may also get discounts if you insure more than one car.

5. Raise Your Deductible

Your car insurance deductible is the money you pay out of pocket when making a claim. Higher deductibles lead to lower premium rates, and lower deductibles result in higher premiums. Keep in mind that you’ll only have the option to raise or lower your deductible if you have comprehensive and collision coverage.

Before choosing to raise your deductible, consider your financial situation and how often you make insurance claims. If you have a tight monthly budget, going for a less expensive premium and higher deductible can help lower your insurance rates. However, if you have the money to pay higher premiums, MoneyGeek suggests choosing a plan with a lower deductible, so your provider covers more of your costs if you have to file a claim.

tip icon
MONEYGEEK EXPERT TIP

Typically, deductible amounts for most drivers are $250, $500 and $1,000. If you choose to have a higher deductible, then consider keeping that money in a savings account. This way, you know you have the funds you’ll need after an emergency or accident.

6. Use an Auto Insurance Comparison Tool

Insurance carriers evaluate your individual needs and circumstances to calculate your premium rates, so auto insurance rates are different for everyone. For example, the average driver typically pays $1,424 per year. However, drivers with a speeding ticket pay an average of $1,836 per year, and those with an accident on record pay $2,237. An auto insurance comparison tool, such as MoneyGeek’s car insurance calculator, allows you to compare prices easily and simplifies the process of finding cheap affordable insurance.

7. Change Your Liability Coverage Limits

The amount of coverage you choose plays a huge role in determining your car insurance premiums. In many cases, changing your liability coverage limits can be the cheapest way to get affordable car insurance.

When selecting your liability coverage limits, make sure you comply with the minimum coverage amounts required by your state. You should also take into consideration your possible needs in the event of an at-fault accident.

Keep in mind that having lower liability coverage limits does come with risks. For example, if you only have $30,000 in bodily injury liability coverage per accident and the other person’s injuries cost $40,000, you’ll have to pay $10,000 in out-of-pocket costs.

8. Improve Your Credit Score

In most states, insurance carriers consider your credit score when determining premium rates. Only three states — California, Hawaii and Massachusetts — don’t allow companies to use credit scores to determine insurance rates.

If you live in a state where insurers can use credit scores to calculate your insurance rates, improving your credit score is one of the best ways to get cheaper car insurance. The average cost of insurance for a driver with poor credit is $2,670 per year, $1,246 more than the cost of coverage for a driver with good credit.

9. Opt for Pay-Per-Mile Insurance

Some drivers don’t commute often using their cars. In such a case, the best way to get auto insurance for less is to opt for pay-per-mile insurance. Generally, this is an excellent option for drivers who don’t drive much. Instead of paying for flat monthly premiums, the cost of your insurance is based on how often you drive.

10. Take a Defensive Driving Course

Aside from preventing expenses due to speeding tickets and other violations, being a safe driver helps you find cheap affordable insurance. Some insurance companies, including Amica, Country Financial, GEICO, Nationwide, State Farm and USAA, also offer discounts for individuals who have completed a defensive driving course.

Before enrolling in a defensive driving course, make sure that it’s accredited by your insurance company to qualify for a discount. Be sure to ask your insurer if there are any other requirements to be eligible for these savings. Weigh how much it would cost to take the course against the benefit of possible discounts to ensure that you’re saving money.

Learn More About Car Insurance

About the Author


expert-profile

Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.