In recent years, there has been a significant surge in the cost of car insurance, which has put car owners worldwide under financial strain. There are methods to reduce the cost of your auto insurance, regardless of whether you desire a basic liability-only policy or one with all the bells and whistles.
We have put up a few simple recommendations to assist you in saving money on your car insurance.
Car insurance rates are important, even though sticker price and petrol price are frequently taken into account when calculating how much owning a car will cost. It may end up costing more than you anticipated, depending on your situation, particularly with the rate increases. The first step in reducing your vehicle insurance costs is to choose the best carrier for your situation, but there are additional things you can do to assist keep your premiums down.
1. Shop around
The average cost of car insurance is $2,314 per year for full coverage car insurance and $644 per year for minimum coverage. With car insurance premiums on the rise, it’s likely drivers will soon see even higher premiums.
But that doesn’t mean there’s nothing you can do about the high cost of car insurance. Car insurance companies each have their own methods for calculating rates, and your own individual rating factors play a significant role, so you won’t know how much car insurance may cost with other carriers unless you request a quote. Quote comparisons can be highly useful in determining which car insurance company offers the best rate for your desired coverage and could make it clear that you’re paying too much for coverage.
Switching providers might be an easy way for you to get the best rate. The table below showcases the nation’s largest insurance companies according to market share, and their average quoted premiums as of 2024 based on data from Quadrant Information Services, to illustrate how they compare against the national average:
| Insurance company | Average annual full coverage premium | Average monthly full coverage premium |
|---|---|---|
| State Farm | $2,364 | $197 |
| Geico | $1,741 | $145 |
| Progressive | $1,988 | $166 |
| Allstate | $2,971 | $248 |
| USAA | $1,695 | $141 |
2. Take advantage of discounts
Another solid strategy when you need to know how to lower your auto insurance is to consider discounts. Companies typically offer several discount opportunities to save on insurance, many of which can be combined for even more significant discounts.
The most common car insurance discounts fall into a few general categories:
- Bundling discounts: Most insurers that offer auto insurance also sell homeowners insurance — and if you purchase both products from the same insurer, you’re typically granted a discounted rate on both. You may also be eligible for bundling discounts with a renters, life or motorcycle insurance policy, as well as multi-car discounts if you’re insuring more than one vehicle.
- Safety discounts: Insurers typically reward proven safe drivers with discounts. In some cases, you can qualify for a safe driving discount by staying accident-free for a certain number of years, completing a defensive driving course or reducing your annual mileage. Many insurers also offer telematics programs, which confer safe driving discounts more quickly by tracking driving habits over a short period via GPS technology.
- Student discounts: College students often pay high insurance rates, but good grades and heading to school without a car could reduce the cost of coverage.
- Payment discounts: Paying your premium in full or even setting up auto-pay could qualify you for a small discount on your rate.
- Affiliation discounts: Some companies, such as Geico, offer discounted car insurance rates to members of certain professional and alumni organizations. Check with any organizations you’re part of to see if there’s a car insurance discount available to you.
3. Don’t pay for coverage you don’t need
When thinking about how to save on car insurance, removing coverage you don’t need can be a simple solution. For instance, you might have only had one car when you started your policy, and so you included rental car reimbursement, but now you have two. Or you might have another service that offers roadside assistance, so you won’t need it in your car insurance policy. Checking your policy to see where you might have duplicate or now-unnecessary coverage could be one way to cut down costs.
Another important decision could be choosing between full coverage and liability-only insurance. Most insurance professionals recommend keeping full coverage on your vehicle if you can’t afford to replace it out of pocket, and your lender may require that coverage if you don’t yet own the car outright. But for older vehicles, the cost of full coverage insurance can quickly exceed the car’s total value. If you own an older, low-value vehicle, you may want to do some math with full coverage quotes before continuing to pay for the coverage.
Read Also: The Importance of Life Insurance for Young Adults
However, before switching to liability-only coverage, you may find it helpful to research your car’s value and average repair costs in your area to see if you could afford repairs on your own. Keep in mind that you can use our other suggestions here to earn full coverage savings. You can also speak with a licensed insurance agent to determine how much coverage is right for you.
| Annual full coverage premium | Monthly full coverage premium | Annual minimum coverage premium | Monthly minimum coverage premium |
|---|---|---|---|
| $2,314 | $193 | $644 | $54 |
4. Consider pay-per-mile insurance
You may have heard of pay-per-mile insurance, a form of usage-based insurance that bases your premium directly on how much you drive. Consider pay-per-mile insurance if you don’t have a commute or drive very often. Insurance companies typically consider you to be at lower risk of getting into an accident since you’re not on the road as much. As such, they might reward you with a lower insurance premium.
5. Increase your deductibles
Some car insurance coverage includes a deductible — the amount you pay before your coverage kicks in. This applies to collision and comprehensive coverage, which is what makes up a full coverage policy; liability insurance does not include a deductible. You may choose your deductible amounts when you purchase your policy; common options include $500 or $1,000. A higher deductible is likely to result in a lower premium, but be careful that you don’t choose a deductible that would be difficult for you to pay in the event of a claim.
6. Improve your credit
Insurers often use a credit-based insurance score to help price premiums, except in states where the use of credit to calculate rates is banned. That said, in most states, those with excellent credit usually receive cheaper auto insurance.
If your credit could use some work, consider taking time to improve your credit score. While significant credit boosts can take time, paying off debts, setting up a monthly budget to help track bills and making on-time payments can go a long way toward reducing your insurance expenses.
Average annual full coverage car insurance rates by credit score
| Poor | Good | Potential savings |
|---|---|---|
| $4,063 | $2,314 | $1,749 |
7. Review your policy before renewal
Periodically reviewing your car insurance policy can help ensure you’re saving on car insurance, but also that your selected coverage meets your current needs. If you’ve had any major life changes, like getting married, moving to a new location or changing your commute, your car insurance policy could use a review to ensure it reflects your current lifestyle.
It’s a good idea to take a close look at your policy once a year or whenever it is up for renewal to see if there are additional savings you can take advantage of. You may also want to ask for a few free quotes from other carriers at the same time to see if it would be worth your while to consider switching to another company.
Tips for Cheaper Car Insurance
Let’s be honest: with the rising expense of living these days, we’re all looking for methods to cut costs wherever we can. We will thus accept any methods—thank you very much—that lead to less expensive auto insurance.
Those who are eager to reduce their auto insurance costs can find discounts by using Compare the Market to browse around. Our newest results suggest that 51% of consumers may save up to £531 on their car insurance when comparing through us.
But why end there? Here are our best recommendations for lowering your premiums when you’re looking at cheaper auto insurance.
1. Choose a cheaper car to insure
Always check which insurance group a car is in before you consider buying it. We get it, everyone loves a noteworthy motor. But the car you drive can have a big impact on your insurance. Generally, smaller, economic models in lower insurance groups are cheaper to insure than those with more powerful engines in the higher groups.
2. Compare car insurance quotes
Third party car insurance offers the most basic level of cover, but don’t assume it’s always the cheapest option. Compare car insurance with us and you can look at prices for the three main types of car insurance: third-party, third-party fire and theft and comprehensive.
3. Reduce your annual mileage
The fewer miles you clock up in a year, the lower the risk of you having an accident. That’s why insurance providers factor in annual mileage when calculating the cost of your premium.
Your provider will ask how many miles your drive on average, so be honest. If you make a claim and they discover your estimate wasn’t accurate, they may decide not to pay out.
4. Pay in one go
If you can afford to pay your annual car insurance premium in one go, you could save money.
While paying monthly can help spread the cost of your car insurance, you’ll likely be charged interest on the instalments, so it ends up more expensive overall.
5. Increase your excess
Choosing to pay a higher voluntary excess (the amount you agree to pay towards a claim) could bring down the cost of your premium. Just make sure that you can afford to pay the voluntary as well as the compulsory excess set by the insurance provider if you need to make a claim.
6. Don’t pay for cover you don’t need
You can bump up your cover by adding optional extras to your policy, such as courtesy car cover, windscreen cover, breakdown cover and motor legal protection. While these extras could come in handy, you’ll have to pay extra for them. Think carefully about what cover you really need to avoid paying more for your car insurance than you need to.
7. Think carefully about modifications
It might be tempting to customise your wheels, but weigh up the costs before you go ahead. Many modifications could make your car more attractive to thieves and your car insurance may go up to reflect this increased risk.
8. Park your car off the road
Where you park your car overnight can make a difference to your premium. Ideally, try to park close to your home, in a well-lit spot. If you can park on your driveway or in a secure compound, that’s a good option.
A garage might seem like the most secure place to park, but it doesn’t necessarily result in a cheaper premium. That’s because some providers think you might damage your vehicle driving it in and out.
9. Improve your car’s security
Fitting an industry-approved alarm or immobiliser might help to cut the cost of your car insurance. But you may need to speak to your insurance provider directly to get any saving reflected in your premium.
Before you go ahead, check that buying and fitting your choice of kit doesn’t override any potential savings.
10. Think about a black box policy
Black box insurance, also known as telematics car insurance, monitors the way you drive through a small device installed in your car or via an app downloaded on your smartphone.
Telematics policies are popular with young drivers, but older drivers could also benefit from the potential savings they offer. If you can demonstrate you’re a safe driver, you could be rewarded with a discounted premium.
Summary
Here’s what you need to know to do this accurately and to help determine the best car insurance company:
- When you are collecting quotes, be sure that you are doing an apples-to-apples comparison, with the same liability limits and coverage options from each carrier. That way, you can make an educated decision about the best — and cheapest — option for your needs.
- When adding optional coverage, be sure you are adding on just what you need. Working with an agent can help ensure you have the coverage you need.
Consider other factors, like mobile app accessibility, financial strength ratings and more. Good customer service, easy policy management tools and a quick claims payout can make for a positive experience. These factors — along with price — could help you decide which option is best suited to your preferences and needs.
