How to Find Lower-Cost Car Insurance

The fastest way to lower your car insurance cost is to compare quotes from at least three insurers, because the same coverage costs different amounts at each company.

Insurance companies use different formulas to price risk. One insurer might charge you $120 a month for liability and collision coverage; another might charge $95 for the exact same protection. You will not know your price until you get a quote, and quotes are free. Most insurers let you get one online in 10 to 15 minutes without talking to anyone.

Beyond comparing quotes, you can lower your cost by raising your deductible, dropping coverage you do not need, bundling with home or renters insurance, and asking about discounts you may not know exist. The combination of these moves often cuts your bill by 20 to 40 percent.

Key Takeaways

• Getting quotes from at least three different insurers is the single fastest way to find a lower price, because the same coverage costs different amounts at each company.
• Raising your deductible from $500 to $1,000 typically lowers your collision and comprehensive premiums by 15 to 30 percent.
• Bundling your car insurance with home or renters insurance often saves 10 to 25 percent on your car policy.
• Common discounts include safe driver discounts, low-mileage discounts, paperless billing discounts, and discounts for completing a defensive driving course.
• Your age, driving record, location, and the car you drive affect your price more than anything else, so switching insurers often saves more than any single discount.

How to compare quotes without spending hours on the phone

Start by gathering your driver's license, vehicle registration, and current insurance card if you have one. You will need your vehicle identification number (VIN), which appears on your registration and on the driver's side of your windshield. You will also need to know your current coverage limits — liability, collision, and comprehensive — if you want to compare the same protection across companies.

Go to the websites of at least three major insurers. State Farm, Geico, Progressive, Allstate, and USAA (if you are military or a veteran) all let you get quotes online without a phone call. Smaller regional insurers like Amica Mutual or your state's assigned risk pool may also offer lower prices for certain drivers. Enter the same information at each site so your quotes are truly comparable.

Most quotes appear when ready or within a few minutes. Write down the monthly or annual price for each company and the coverage limits they quoted. Do not just pick the lowest number — make sure you are comparing the same deductible and the same liability limits at each company.

Raising your deductible to cut your premium

Your deductible is the amount you pay out of pocket when you file a claim for collision or comprehensive coverage. A $500 deductible means you pay $500 toward repairs; the insurance pays the rest. A $1,000 deductible means you pay $1,000.

Raising your deductible from $500 to $1,000 typically lowers your monthly premium by $15 to $30, depending on your age, driving record, and location. Raising it to $2,500 can lower it by another $10 to $20. The trade-off is that if you have an accident, you will pay more out of pocket before insurance kicks in.

This move makes sense if you have savings set aside for emergencies. If you do not have $1,000 in savings, stick with a $500 deductible — paying a slightly higher premium is cheaper than borrowing money or going into debt after an accident.

Dropping coverage you may not need

Liability coverage is required by law in every state. Collision and comprehensive coverage are required only if you are financing or leasing your car — your lender demands it. If you own your car outright and it is older, you may be able to drop collision and comprehensive and keep only liability.

Before you drop collision or comprehensive, think about whether you could afford to replace your car if it were totaled. If your car is worth $3,000 and you have $3,000 in savings, dropping coverage might make sense. If your car is worth $10,000 and you have $2,000 in savings, keeping coverage is probably worth the premium.

Some states also let you lower your liability limits below the standard amounts. This lowers your premium but leaves you exposed if you cause a serious accident. Most insurance agents recommend keeping liability limits at $100,000 per person and $300,000 per accident minimum, even though your state may allow lower amounts.

Bundling with home or renters insurance

If you rent or own a home, bundling your car insurance with renters or homeowners insurance at the same company usually saves 10 to 25 percent on your car policy. Some insurers also bundle with life insurance or umbrella policies.

The discount applies only if you buy both policies from the same insurer. If you currently have home insurance with Company A and car insurance with Company B, moving your car insurance to Company A may save you money even if Company A's base rate is slightly higher. Run the numbers both ways — get a quote for car insurance alone, then get a quote for car insurance bundled with your home policy.

Discounts that actually lower your bill

Safe driver discounts are the most common. If you have not had an accident or ticket in three to five years, most insurers will lower your rate by 10 to 15 percent. Some companies offer accident forgiveness, which means your first accident does not raise your rate.

Low-mileage discounts explore if you drive fewer than 7,500 to 10,000 miles per year. If you work from home or use public transit most days, you may may have access to. The discount is usually 5 to 15 percent.

Paperless billing discounts are typically $5 to $10 per month. Defensive driving course discounts range from 5 to 10 percent and last for three years; you take the course once online and the discount applies automatically. Some insurers offer discounts for paying your premium in full rather than monthly, for setting up automatic payments, or for being a long-term customer.

Ask your insurer for a full list of discounts when you get your quote. Do not assume you do not may have access to — many people miss discounts straightforward because they did not ask.

Why switching insurers often saves more than discounts

Insurance companies price risk differently. A 25-year-old with one speeding ticket might pay $140 a month at Geico and $110 at Progressive because Progressive's formula weights that ticket less heavily. A 55-year-old with a clean record might pay $85 at Geico and $105 at Progressive for the exact same coverage.

This means the cheapest insurer for your friend may not be the cheapest for you. Switching insurers every two to three years — or whenever your rate goes up — often saves more money than any single discount. Some people save $30 to $50 a month just by moving to a company that prices their specific situation more favorably.

When you switch, make sure your new policy starts before your old one ends so you have no gap in coverage. Most insurers let you choose your start date when you buy online.

Frequently Asked Questions

Does my credit score affect my car insurance rate?

Yes. Most insurers use credit-based insurance scores, which are different from credit scores but based on similar information. A higher score typically means a lower rate. If your credit score is low, you may pay 10 to 50 percent more depending on your state and insurer. Some states limit how much insurers can use credit scores, so the impact varies by location.

Will my rate go down if I take a defensive driving course?

Most insurers offer a 5 to 10 percent discount for completing an approved defensive driving course, and the discount lasts three years. You take the course online, usually in four to six hours, and the insurer applies the discount automatically once they receive your completion certificate. The course costs $20 to $50, so the discount usually pays for itself in the first month.

What happens to my rate if I get a speeding ticket?

A speeding ticket typically raises your rate by 10 to 30 percent for three to five years, depending on how fast you were going and your insurer's policy. The impact is usually smaller for a ticket under 10 miles over the limit and larger for 20 miles or more over. Some insurers offer accident forgiveness but not ticket forgiveness, so your rate will still go up.

Can I get a lower rate by paying my premium in full instead of monthly?

Some insurers offer a 5 to 10 percent discount for paying your annual premium upfront instead of monthly. Others offer a smaller discount, around 2 to 3 percent. Ask your insurer whether they offer this discount and whether it is worth the upfront cost for your situation.

Do I need to tell my insurer if I drive less than I used to?

Yes. If your mileage has dropped significantly — for example, you started working from home — tell your insurer. You may may have access to for a low-mileage discount, and your rate may go down. Some insurers also offer usage-based programs where they track your actual mileage and driving habits through an app, which can lower your rate if you drive safely and infrequently.