10 Legit Ways to Lower Your Car Insurance (Without Sacrificing Coverage)

Updated June 11, 2024
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If you’re having trouble stomaching your pricey car insurance bill, these 10 tips can help you lower your car insurance premiums today.

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According to the National Association of Insurance Commissioners and its recently published Auto Insurance Database Report, the average cost of car insurance per insured vehicle was $1,005 per in 2017.

I wish I was paying just $1,005 per car for insurance. My wife and I recently switched providers, cutting our bill from about $2,100 for six months of coverage for both our cars to just over $2,600 per year (for the exact same coverage). Although the savings in insurance costs are substantial, we’re still paying significantly more than average.

Although we can’t help the fact that our state is the third-most-expensive state for car insurance according to that same report, there are a number of things we can do that can help us save on car insurance costs — and you can do them too.

If you’re anything like me and want to know how to save money on car insurance without skimping on coverage, you’re going to want to try at least a few of these money-saving strategies.

1. Keep a good driving record

Your car insurance premium is the amount you pay in exchange for your insurance company to cover some or all of your losses in the event of an accident. No matter how much you consider yourself to be a good driver, you still represent some level of risk in the eyes of your auto insurance company. But the less of a risk you are, the less you have to pay for auto coverage.

A clean driving history is proof that you’re less of a risky driver and more of a safe driver. You’re likely to get offered a lower premium. On the other hand, a driving history that includes tickets and accidents can boost your auto insurance premium, so maintaining a good driving record is one of the best ways to reduce your car insurance premiums.

2. Drive less often

Many car insurance companies ask for your annual mileage to gauge how often you’re on the road because it has a direct link to your likelihood of getting into an accident. If you fall below a certain number of miles — what some companies call pleasure use — you’ll typically pay a lower rate for your insurance. If you use your car to commute and drive above a certain mileage each year, you may pay more. The exact mileage thresholds vary from company to company.

If you’re driving less than usual, contact your insurance agent and adjust your declared mileage on your policy accordingly. Some companies offer a special low mileage discount, but most will offer some sort of savings if your driving habits have changed and you're simply aren’t using your car that often.

3. Improve your credit score

Believe it or not, your credit score plays a role in the amount you pay for car insurance. Car insurance companies use the information in your credit report, such as outstanding debt, payment history, and new applications for credit, to calculate what’s known as an insurance score.

Your insurance score is a factor in determining the amount of your premiums. Your insurance score measures how well you manage your money, and, according to the Insurance Information Institute, studies show that how a person manages their money is a good predictor of how often they’ll submit an insurance claim.

If you have good credit, you’re likely already seeing some savings. If you’re working to establish or improve your credit score, continue practicing proper money management to further reduce your auto insurance rate.

4. Bundle your insurance coverages

Many car insurance companies reward you with savings if you hold multiple policies with them, such as auto and homeowners or auto and renters or even home insurance. This is also true if you have more than one vehicle insured through the same company.

If you currently have several insurance policies spread across multiple companies, consider getting auto insurance quotes from each of them and consolidating your policies with one insurer. Before you make the switch, read through the quotes to compare coverage and prices to ensure you are, in fact, saving money by bundling.

5. Pay in full

Making installment payments on your auto insurance on a monthly basis might be more practical than paying in full, especially if you’re paying more than $1,000 a year on average to insure your car. But many car insurance companies offer discounts for paying in full. If you have enough in savings to cover the cost of a six-month or 12-month policy, paying upfront might be worth considering.

If your current insurer allows you to make your payments using a credit card, you can save even more money by using a flat-rate, cashback credit card such as the Citi Double Cash® Card. With this card, you earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases; plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24. If your 12-month policy costs $1,005, you’re looking at an immediate savings of $20. Although that might not seem like much, you are looking to save money, aren’t you?

6. Install an anti-theft device

Your car insurer doesn’t want to pay out for any claim, let alone a stolen car. If you have comprehensive car insurance coverage, your insurance will most likely cover the theft of your car — up to the actual cash value. If your car has a market value of $15,000, your insurer will cut you a check for $15,000 (minus your car insurance deductible) for this covered loss. It’s safe to say your insurer does not want to cut you a check for $15,000.

For this reason, if you have certain safety features such as an anti-theft device on your vehicle, there’s a good chance you can save some money. Many car insurance companies offer a discount if your car is secured by an anti-theft device. This reduces the chances your car will be stolen, which reduces the chances your insurer will have to cut you a check.

7. Investigate available auto insurance discounts

Take a look at most car insurance companies and you’ll find many of them offer a slew of discounts to help keep the cost of insurance affordable. Depending on the company, you can find car insurance discounts if your vehicle is equipped with safety features such as anti-lock brakes, airbags, and daytime running lights. You may also find discounts for being a good student, serving in the military, having a new model car, signing up for automatic payments, taking a defensive driving course — you get the idea.

Although these discounts will vary from company to company, you can easily head over to the website of any major car insurance company to see the types of driver discounts they offer. Or, call and speak with a car insurance agent to see what discounts they can offer.

8. Drop unnecessary coverage

A car insurance policy is made up of several types of car insurance that help make sure you’re sufficiently covered while on the road. This includes liability coverage, coverage for your and your passengers’ medical expenses, and coverage to help pay the cost of repairs to your vehicle, among others. Although it’s always best to purchase as much coverage as you can afford, that doesn’t mean you should pay for coverage you don’t need.

Although certain liability coverages are required by state law, comprehensive and collision coverages are optional, though your lender or leasing agent may require comprehensive or collision if you’re financing or leasing your car. If you have an older car that isn’t valuable, it actually might not be worth it to pay for these coverages. This all depends on the value of your car and whether your premiums and deductibles for these coverages add up to more than your vehicle is worth.

What about other add-on coverages such as roadside assistance or car rental coverage? Maybe you’re already paying for AAA, in which case you can save money by dropping roadside assistance from your insurance policy. If you have a second car, maybe you don’t need car rental coverage either. The point is, take a look at your insurance policy and make sure you’re not paying for unnecessary coverage when you could be paying a lower car insurance premium instead.

9. Switch to a higher deductible

A deductible is what you pay out of pocket before certain car insurance coverages kick in — most often comprehensive and collision coverages. If you’re willing to pay a bigger portion toward a covered loss, your car insurer will likely reward you with lower rates. For example, according to the Insurance Information Institute, increasing your deductible from $200 to $1,000 can save you 40% or more on your collision and comprehensive coverage premiums.

“The best way to save money on auto insurance is to review your deductibles …. ” says Addie McHale, certified financial planner and founder of Moneyfull. “I recommend calling your insurance company or agent and reviewing your deductibles on each coverage and then getting the prices on a higher deductible. You might find that you cover the cost of a higher deductible in a year or less by the premium savings.”

So the short story is: If you have enough in savings to cover the cost of a higher deductible, you may consider increasing your deductible to save on your monthly auto insurance costs.

10. Comparison shop

As I mentioned earlier, my wife and I saved nearly $2,000 for the year by switching car insurance for our two vehicles to a different provider. Our coverages remained the same, so we weren’t putting ourselves in danger just to save some money. This is important to keep in mind as you shop around for better prices.

Now, you can take an entire day of inputting the same information over and over to receive a car insurance quote from the numerous insurers out there. However, this is not the best use of your time. Instead, consider using an online insurance marketplace. Many websites offer a way to receive multiple car insurance quotes after providing your information just once. This allows you to save time and money as you compare quotes for the coverage you need at the best car insurance rates available.

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Bottom line

Because of how car insurance works, it can be costly, but it’s not something you can afford to go without. However, that doesn’t mean you can't save money on your auto insurance policy. In fact, we showed you 10 ways you can get lower car insurance premiums today without having to sacrifice coverage.

But remember: If you’re shopping for more affordable rates, make sure to maintain as much coverage as you can afford. The last thing you want to do is leave yourself vulnerable just to get cheap car insurance.

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Author Details

Matt Miczulski Matt Miczulski is a personal finance writer specializing in financial news, budget travel, banking, and debt. His interest in personal finance took off after eliminating $30,000 in debt in just over a year, and his goal is to help others learn how to get ahead with better money management strategies. A lover of history, Matt hopes to use his passion for storytelling to shine a new light on how people think about money. His work has also been featured on MoneyDoneRight and