Car insurance is a necessity for every driver. Not only do you need it to protect yourself financially in case of an accident, but it is required by law in almost every state. However, just because you need a car insurance policy doesn’t mean you should resign yourself to paying an exorbitant amount for it.
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Here are ten of the easiest ways to save money on car insurance and find your cheapest rates.
1. Shop around and compare quotes
Car insurance can seem expensive, but prices can vary from one company to another, even for the same driver. The rates for 20 of the top insurance companies are listed below:
| Company | Average annual premium |
|---|---|
| MAPFRE | $1,040 |
| USAA | $1,048 |
| Auto-Owners Insurance | $1,070 |
| Erie | $1,139 |
| GEICO | $1,187 |
| American Family | $1,227 |
| State Farm | $1,383 |
| Nationwide | $1,463 |
| NJ Manufacturers | $1,481 |
| COUNTRY Financial | $1,543 |
| Travelers | $1,580 |
| Amica | $1,687 |
| Progressive | $1,758 |
| National General | $1,819 |
| Farmers | $1,934 |
| The Hartford | $1,939 |
| Allstate | $1,974 |
| CSAA | $2,318 |
| MetLife | $2,431 |
| Mercury Insurance | $2,554 |
The difference in average cost between the cheapest and most expensive companies on this list is over $1,500, which means drivers could potentially save that much just by comparing rates between companies.
→ Learn more about how to buy car insurance
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2. Bundle your coverages
One of the best ways to save money on car insurance is to buy several types of coverage from one company, typically referred to as bundling your policies. For example, getting both car and motorcycle insurance through the same company would be considered bundling your coverages. Many insurance companies offer several types of coverage, including:
Auto insurance
Motorcycle insurance
Homeowners insurance
Renters insurance
Condo or co-op insurance
Landlord insurance
Flood insurance
Earthquake insurance
Purchasing two or more policies through the same company often comes with a significant discount, and bundling policies may mean you can make your payments on both at the same time, or just pay one deductible when filing a claim with both policies.
→ Learn more about bundling car insurance
3. Take advantage of discounts
Beyond bundling your coverages, there are dozens of auto insurance discounts available through almost every company. Depending on your situation, there are multiple discounts that could apply to your policy, including:
Multi-car discount: For insuring more than one car on the same policy
Good student discount: For students with a high GPA
Military discount: For both active and retired military members
Employer discount: For employees of participating companies or institutions
Anti-theft device discount: For drivers who have anti-theft devices in their vehicles
Green vehicle discount: For drivers with electric or hybrid vehicles
Safety feature discount: For drivers whose vehicles have features like blind spot detection
Auto-pay discount: For people who automate their monthly payments
Pay in full discount: For people who pay their entire annual balance in full
Defensive driver discount: For people who take a defensive driving course
Work with your agent or a Policygenius expert to find out how to get the car insurance discounts that are available to you.
→ Learn more about car insurance discounts
4. Evaluate your coverage
Insurance needs often change over time, and regularly reviewing your insurance coverage can be an excellent way to reduce your premiums. For example, if you paid off your car last month and you now own it outright, you no longer need gap coverage and you can raise your deductibles, both of which would bring down the cost of your insurance.
Drivers who have had their car for years should consider whether or not comprehensive and collision coverage are still necessary. If you can afford to replace your car out-of-pocket, carrying only liability coverage can save you a significant amount of money each year.
It is important to do the math before dropping coverage, however, so make sure you know exactly how much you can afford and work with an agent or other insurance representative to make sure all of your needs are met.
→ Learn more about when to drop full coverage
5. Improve your credit rating
In many states, insurance companies can use your credit rating to help determine your insurance rate. Drivers with lower credit scores often pay much more for car insurance, sometimes paying over $1,000 more each year than drivers with very good or excellent credit.
| Credit score | Average annual cost |
|---|---|
| Excellent | $1,420 |
| Very Good | $1,569 |
| Good | $1,718 |
| Fair | $2,084 |
| Poor | $3,107 |
A handful of states don’t allow insurance companies to rate drivers based on their credit rating, including California, Hawaii, Massachusetts, and Michigan.
Drivers in other states could improve their insurance rates with relatively minor improvements in their credit score. For example, a fair credit rating falls between 710 and 740, which means someone with a credit rating of 739 who raises their credit rating by only two points could save hundreds of dollars each year on their insurance rates.
→ Learn more about car insurance and credit score
6. Reduce your annual mileage
Insurance companies often charge higher rates for people who put more mileage on their car because the more time you spend on the road, the more likely you are to be in an accident or file a claim. This means you could save money on your insurance by driving less. If you have the opportunity to work from home or take public transit part of the time, this could save you money on your car insurance.
Each company has their own definitions for low annual mileage, so check the details of your policy to find out how low your mileage needs to go before you will see your rates change.
→ Learn more about average mileages
7. Choose your vehicle wisely
What type of car you drive has a big impact on how much you pay for car insurance. Some cars are more likely to be stolen than others, which means comprehensive insurance will be more expensive for those cars. Other cars cost more to repair after an accident, which means collision coverage will be more expensive for those models.
The chart below shows some of the most popular cars in the U.S. and their average annual premiums.
| Vehicle | Average annual premium |
|---|---|
| Ford F-150 | $1,665 |
| Honda CR-V | $1,673 |
| Toyota Tacoma | $1,714 |
| Ford Escape | $1,735 |
| Subaru Outback | $1,744 |
| GMC Sierra | $1,748 |
| Chevrolet Equinox | $1,755 |
| Jeep Wrangler | $1,771 |
| Jeep Grand Cherokee | $1,797 |
| Subaru Forester | $1,805 |
| Nissan Rogue | $1,814 |
| Toyota Highlander | $1,818 |
| Ford Explorer | $1,822 |
| Chevrolet Silverado | $1,826 |
| Toyota RAV4 | $1,865 |
| Honda Civic | $1,925 |
| Toyota Corolla | $1,945 |
| Ram 1500 | $1,947 |
| Toyota Camry | $1,949 |
| Nissan Leaf | $1,955 |
| Honda Accord | $1,990 |
| Chevrolet Bolt EV | $2,015 |
| Tesla Model 3 | $2,855 |
| Tesla Model Y | $2,884 |
→ Learn more about how your car’s make and model affects insurance
8. Research before relocating
Insurance rates are based on a number of factors and your location has a significant impact on how much you pay for car insurance. Drivers in Michigan pay an average of $2,377 while drivers in neighboring Wisconsin pay a much lower average rate of $1,062 per year.
It isn’t just which state you live in that impacts your rates; moving from one ZIP code to another can potentially change your rates by hundreds of dollars each year. The population density of an area, the number of accidents reported, and the types of parking available can all have an effect on your insurance costs.
Whether you are moving a few blocks over or 1,000 miles away, getting a quote from your agent can give you the information you need before you move to a new address.
→ Learn more about car insurance rates by state
9. Review your deductibles
If you’re policy includes comprehensive and collision coverage, often referred to as full coverage insurance when paired with liability, you will be responsible for a deductible if you file a claim. The more you are willing to pay out-of-pocket toward repairing or replacing your vehicle in the event of an accident, the less you will pay for your annual premiums.
Car insurance deductibles are usually set at $500 or $1,000. Choosing the higher options can save you money on your car insurance.
→ Learn more about setting your car insurance deductible
10. Consider pay-as-you-go insurance
Insurance companies have traditionally used statistical information to set rates for their customers, but new technology allows them to set prices based on behavior behind the wheel.
Companies can use phone apps or devices installed in your car to track your annual mileage, your speed, when and where you drive, and other factors that can help them more accurately determine how much you should pay for car insurance.
Pay-as-you-go insurance companies like Root or Metromile often charge less than traditional insurers, which can save you hundreds of dollars each year as long as you’re a safe and careful driver. If you don’t mind your insurance company tracking you while you drive, pay-as-you-go insurance could possibly save you hundreds of dollars each year on your car insurance.
→ Learn more about pay-as-you-go car insurance
Methodology
Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C.
For full coverage policies, the following coverage limits were used:
Bodily injury liability: 50/100
Property damage liability: $50,000
Uninsured/underinsured motorist: 50/100
Comprehensive: $500 deductible
Collision: $500 deductible
In some cases, additional coverages were added where required by the state or insurer.
Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles per year.
Rates for driving violations and “poor” credit were determined using average rates for a single male 30-year-old driver with a credit score under 578.
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.
