How to lower your car insurance costs

After two years of price hikes, the average cost of full coverage car insurance finally fell by 6% nationally in 2025, according to Insurify data. This was a welcome change considering that many Americans are struggling financially — but it wasn’t felt everywhere. While 39 states saw rates dip, other states — including the majority of the most expensive ones — had increases.

Ultimately, the premiums you get are often largely out of your hands (think inflation, repair costs, severe weather, and even the price of car parts). However, you do have some control over your rate.

From shopping around to adjusting your deductible to taking advantage of overlooked discounts, here’s how to lower your car insurance in eight different ways.

8 ways to lower your car insurance (and save money)

Here are eight tips that could help lower your car insurance costs:

1. Shop around and compare quotes

It’s estimated that shopping around for car insurance can save you an average of more than $1,300 per year, according to a Value Penguin survey. So if you only try one tip in this article, let it be this one.

You might think that you’re already getting the absolute best deal on car insurance. But the truth is, you won’t ever know for sure unless you shop around and compare quotes.

Every car insurance company calculates risk a little bit differently. For instance, one might weigh your driving history more than the type of vehicle you drive, while another could weigh your credit-based insurance score more than your zip code. This is why you can get wildly different car insurance quotes for the same vehicle.

2. Increase your deductible

Your car insurance deductible is the amount you agree to pay yourself before insurance will cover the rest of an approved claim. For example, if you have a $500 deductible and your car needs $4,000 in repairs after an accident, you'd pay the first $500, and your insurance would generally cover the rest.

If you want to lower your car insurance premium, you could raise your deductible. For example, increasing your deductible from $200 to $500 could shave 15% to 30% off your premiums, while raising it to $1,000 could save you 40% or more, according to the Insurance Information Institute (III).

That said, if increasing your deductible means you’d struggle to come up with the extra funds you’d need after an accident, the tradeoff might not be worth it. In general, don’t choose a deductible amount you couldn’t comfortably afford to cover from your savings.

Find out: How to file an auto insurance claim

3. Take advantage of car insurance discounts

Another quick way to save money on car insurance is to call your insurance company and ask which car insurance discounts you qualify for. Not every discount gets applied automatically, so you’ll likely have to request what’s available to you.

For example, if you recently started working from home and your commute dropped from 20,000 miles per year to 7,000, it’s worth telling your insurance company. Driving less can sometimes qualify you for lower rates, but your insurer won’t know you’re eligible unless you tell them.

Here are a few common car insurance discounts that could help lower your rate:

4. Improve your credit score

Did you know that in most states, insurance companies can use your credit-based insurance score to help set your rates? This score isn’t exactly the same as your credit score, but it’s built from similar information like payment history, debt levels, and credit usage.

According to The Zebra, drivers with poor credit (a credit score below 580) could pay twice as much for insurance as someone with exceptional credit (a score of 800 or higher) — even if they have a clean driving history.

This means that maintaining good credit matters for more than just credit cards or loans. While you can’t build your credit overnight, here are some strategies that could help to improve your score over time and potentially lower your car insurance premiums:

• Pay your bills on time
• Set up autopay to avoid missing payments
• Keep lower balances on revolving credit lines (including credit cards and lines of credit)
• Check your credit reports for errors

Related: What credit score is needed to buy a car?

5. Keep your driving record clean

One more surefire way to lower your car insurance premiums is to keep a clean driving record. Just one speeding ticket could cause your rates to jump by 27% per year, according to Experian data. If you’re paying $150 per month for car insurance, for example, that’s the equivalent of having your premiums go up to $190.50.

In this same vein, taking a defensive driving course to show you’re a safe driver can help lower your car insurance rates. Some insurers will give you a discount for completing an approved course and brushing up on your safe-driving habits.

Find out: What happens if you drive without insurance?

6. Bundle with other insurance policies

If you already have homeowners, renters, condo, or another insurance policy, bundling it with the same company you use for car insurance could be another easy way to lower your premiums.

When you bundle, you’re simply buying multiple types of insurance policies with the same company. If you rent, that could look like having both your car and renters insurance policies with the same carrier. Or if you own a house, you could bundle your home and auto insurance policies.

Bundling policies could save you a hefty amount in the long term. For example, State Farm policyholders who bundled car and renters insurance policies saved up to $900 per year, according to the company.

7. Reduce coverage where appropriate

Lowering coverage on older vehicles can absolutely reduce your car insurance premium. But reducing the wrong coverage could also create bigger problems later.

For example, if you drive an older, paid-off vehicle worth only a few thousand dollars, paying for collision and comprehensive coverage might eventually stop making financial sense. But you most likely wouldn’t want to drop that same coverage on a newer, more expensive vehicle that you couldn’t easily pay to replace out of pocket. Do your research on your coverage options to find out just how much car insurance you need.

8. Drive fewer miles

Driving less also means there’s less of a chance for you to get into an accident. Because of this, car insurance companies might reward you with a discount for driving fewer miles. Some even offer pay-per-mile insurance for those who rarely drive.

If your commute has changed, you work from home, you’re retired, or you simply drive less than you used to, this could be another way to lower your car insurance premiums.

How much can you save by lowering your premium?

Here’s a rough estimate of how much you could lower your car insurance premiums based on industry data:

• Switching insurance companies: Average savings of around $1,300 per year
• Bundling policies: Up to $900 annually with some insurers, but varies by company
• Raising your deductible: Around 15% to 30% lower premiums when increasing from $200 to $500; 40% savings when increasing to $1,000
• Telematics programs: Up to 30% or 40%, but varies by company

How much you ultimately save on car insurance will depend on which of these strategies you use. The biggest savings often come from stacking strategies. For example, if you shop around, bundle policies, improve your credit score, and qualify for a few extra discounts, you could save more than someone who makes just one change.

What not to do when lowering your car insurance premium

On your quest to learn how to lower your car insurance premiums, you’ll want to avoid doing so in a way that leaves you underinsured.

Don’t slash your liability limits too aggressively

It could be tempting to go with your state’s minimum required coverage and call it a day. However, it might not give you enough financial protection.

For example, if you cause an accident involving a newer SUV and multiple injuries, medical bills and repair costs could quickly exceed how much your policy will pay out. And if your coverage limits are too low, you could potentially be responsible for costs that exceed them.

Compare: Liability vs. full coverage auto insurance

Don’t drop coverage just because someone on the internet said to

You’ll often come across blanket advice online like, “Drop collision and comprehensive once you pay off your car.” But this isn’t always sound advice.

If replacing or repairing your car would create a major financial strain for you, keeping coverage could still be worth it. Rather than considering how old your car is, ask yourself whether you could comfortably replace it tomorrow if something happened.

Don’t raise your deductible beyond what you could actually afford

Higher deductibles can often lower your premiums. But remember that this means you’re agreeing to pay more upfront after a claim. Saving $30 per month might not feel like much of a win if you suddenly need to come up with an extra $1,000 after an accident.

Don’t ignore policy reviews

A lot can change in a year — for example, maybe you’ve moved, gotten married, added a teen driver to your policy, or bought a home. Small life changes can create savings opportunities if you ask your insurance company.

How often should you shop for car insurance?

Many insurance experts recommend shopping around at least once a year or whenever a major life change happens. Comparing quotes is also especially wise if:

• Your premium increased more than expected
• You moved
• You got married or divorced
• You bought a new car
• You paid off a car loan
• Your driving habits have changed
• You improved your credit

Even if you end up staying with your current insurance company, comparing quotes can help confirm if your current rate is still competitive.

Pay less for car insurance over time

If your car insurance rates have gone up in recent years, there are still plenty of ways to lower your premiums. For many drivers, the biggest wins could come from shopping around, taking advantage of discounts, and making sure your policy still matches your life today.