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

The average cost of car insurance in 2024 was around $1,715 a year, according to AAA’s Your Driving Costs annual survey. But you might pay substantially more than that, depending on where you live. Louisianans, for example, pay $2,883 to insure their cars each year, on average. You can’t help if you live in an expensive state, but there are things you can do to cut costs without cutting coverage you need. For starters, we recommend keeping your driving record clean, lowering your risk of insurance claims by driving less, and boosting your credit. But this is just the tip of the iceberg, and there’s a lot more where that came from.

If you’re looking for ways to lower your car insurance, start with these 10 strategies.

1. Keep a clean driving record

When we say “clean,” we mean accident- and incident-free. Your car insurance premium is the amount you pay in exchange for your insurance to cover some or all of your losses in the event of an accident. But how you drive outside of accident claims is also important. No matter how much you might pride yourself on being a good driver, your driving record ultimately comes down to how safely and responsibly you drive — and whether law enforcement agrees with your self-assessment.

If you’re the type of person who gets a lot of speeding tickets, parks in no-parking zones, or is known to get into a fender bender here and there, an insurance provider will see you as much riskier than a driver who doesn’t do all of these things. This is because car insurance companies generally don’t want you to actually use your insurance to file claims because this costs them money, and they’ll adjust insurance rates according to your risk. If you’re regularly getting yourself into trouble on the road, no matter how minor, this can translate to higher costs for you as your provider attempts to get ahead of what you might cost them.

The cleaner your driving history, the lower your car insurance premium is likely to be. It can take months or even years to decrease your rate if you’ve got a really mottled record, but every little bit of progress counts.

2. Improve your credit score

Another important type of record car insurance companies look at when determining your premiums is your credit. Your credit score could help inform what you pay for car insurance because it’s another way for providers to assess your risk, in this case in more of a financial sense. In many states, car insurance companies are allowed to give lower rates to drivers with excellent credit. In some states, information in your credit report, such as outstanding debt, payment history, and new credit applications, may be a part of calculating what’s known as an insurance score. 

Your “insurance score” is an often credit-based score that looks at how likely you are to file claims based on your financial history. It’s separate from your true credit score or credit report because it can include details about your past auto insurance claims. Many major insurers, including Progressive, Nationwide, and Allstate, use insurance scores. The rule is that your credit can’t be the only determining factor for your insurance score, so having bad credit won’t necessarily doom you to a high rate. Still, improving your credit — by reducing your debt, paying your bills on time, etc. — is a proven strategy for lowering your car insurance.

3. Investigate auto insurance discounts

Car insurance companies offer many discounts that could lower your premium, but they don’t always advertise them well. Taking even just a few minutes to look into discounts is one of the best ways to save money on car insurance. Commonly available discounts include:

• Automatic payment discounts

• Safety feature discounts

• Defensive driving discounts

• Good student discounts
• Military service discounts
  
• New car discounts
• Low mileage discounts
• Telemetric discounts (like Progressive’s Snapshot)
• Loyalty discounts
• Bundling or multiple-policy discounts
• Anti-theft device discounts

Do some sleuthing and ask your insurer about every possible discount. Be sure to save the documentation to qualify for those discounts, such as proof of taking a defensive driving course. We’ll go into more detail about a couple of these discounts now.

4. Bundle your insurance coverage

Many auto insurance companies will lower your rate if you hold multiple policies with them, such as auto and home insurance or auto and renters insurance. For example, I cut my renter’s insurance bill by 30% by bundling it with my auto insurance. This is also true if you have more than one vehicle insured through the same company, which can be referred to as a multi-vehicle discount.

If you currently have several insurance policies spread across multiple companies, consider getting auto insurance quotes from each and consolidating your policies with one insurer. Before you switch, compare coverage and prices for each quote to make sure you’re really come out on top. 

5. Use an anti-theft device to protect your car

Your car insurer doesn’t want to pay 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. That means that if your car has a market value of $15,000, your insurer will pay you $15,000 (minus your car insurance deductible) for this covered loss. But though your insurer will pay under this coverage, it would much prefer you not get your car stolen (as we’re sure you would, too).

This is why installing certain safety features, such as an anti-theft device, in your vehicle can be a good way to lower your auto insurance premium. Many car insurance companies offer discounts for these devices because they’ll make your car less likely to get stolen and you less likely to need a fat check.

If you’re adding an anti-theft device, confirm with your insurance company that it offers discounts for after-market anti-theft devices. Some new cars come with these features already installed.

6. Pay your auto insurance premium in full

Making monthly installment payments on your auto insurance might be more practical than paying in full, especially if you’re paying more than $1,000 a year to insure your car. But many car insurance providers offer discounts for paying in full. If you have enough savings to cover the cost of a six- or 12-month policy, we recommend paying upfront and getting your premiums over with.

7. Drive less often

You probably don’t drive much more than you need to already, what with the price of gas and car maintenance. But if you have any wiggle room to drive less, use it to your advantage. Many car insurance companies ask for your annual mileage to gauge how often you’re on the road, which correlates to your likelihood of getting into an accident. If you fall below a certain number of miles — what some companies call “pleasure use” rather than “commute use” — you’ll typically pay a lower rate for your insurance. The threshold for pleasure use varies by provider, but most providers will give you a reduce premium if you qualify.

If you’re working from home or have reduced your commute, let your insurer know. You might qualify for a low-mileage discount.

8. Switch to a higher deductible

A deductible is what you pay out of pocket before certain car insurance coverage kicks in. Opting for a higher deductible can significantly lower your premium, potentially saving you money whether you get into an accident or not. For instance, according to the Insurance Information Institute, increasing your deductible from $200 to $1,000 could save you 40% or more on comprehensive and collision coverage.

Reviewing your deductibles is one of the best ways to reduce your auto insurance costs. We recommend calling your insurance company or agent and reviewing your deductibles on each coverage and then getting the prices on a higher deductible.

9. Drop unnecessary coverage

A car insurance policy is made up of several types of car insurance that make sure you’re sufficiently covered while on the road. This includes liability coverage, coverage for your and your passenger’s medical expenses, and coverage to help pay the cost of repairs to your vehicle, among others.

While we would never suggest having less coverage than you need to feel safe and protected, you may decide that your car is worth a little less to you than you’re paying in insurance. An older car, for instance, might not need comprehensive and collision coverage if you would be comfortable paying for repairs without going through insurance. Check to make sure you don’t have unnecessary add-ons in your car insurance, especially if you have a spare vehicle you drive infrequently, to try to lower your rate.

10. Comparison shop

Don’t settle for the first quote you get. Use insurance marketplaces to compare multiple quotes at once. This saved me nearly $2,000 a year on coverage for two vehicles. Remember, the goal is to find the best coverage at the best price, not just the cheapest option.

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. But you have better things to do. Instead, consider using an online insurance comparison site like QuoteWizard or The Zebra to review multiple potential offers in one place.

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Bottom line

Car insurance is a necessary expense, but it doesn’t have to break the bank. By implementing these strategies, you can potentially lower your car insurance to save hundreds or even thousands of dollars a year. Remember, the key is to balance cost savings with adequate coverage. Don’t sacrifice protection just to save a few bucks – your future self will thank you.