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Car insurance rates are climbing, leaving many Americans struggling to keep up with the cost of coverage. According to the Bureau of Labor Statistics (BLS), auto insurance prices surged 11.3% year-over-year from December 2023 to December 2024.
Several factors help contribute to the rising price of car insurance, like higher repair costs and more expensive medical claims, which can make it tough to control your car insurance costs, even if you’re a safe, incident-free driver. But while you can’t control insurance industry pricing trends, you can take steps to lower your premiums.
Compare auto insurance policies to find the most affordable options for you.
Want cheaper car insurance? Review this checklist.
If you’re looking to pay less for your car insurance, here are six smart ways to make it happen.
1. Compare rates from multiple insurers
Insurance companies calculate premiums using their own internal risk assessment processes, which means rates can vary significantly from one provider to another, even for the same coverage.
“The quickest way to get cheaper car insurance is to shop around and let your current insurer know you’re shopping around,” says Miranda Marquit, MBA, an insurance agent and financial wellness advocate. “Compare rates to see if you can get a lower one elsewhere or if your current insurer will match a lower rate.”
The Insurance Information Institute (III) recommends getting policy quotes from at least three insurance providers. That way, you have a good chance of finding the best coverage at the most affordable price.
Find out how much you could save with the right car insurance coverage.
2. Raise your deductible
Another quick way to lower your monthly insurance costs is to raise your deductible — the amount you must pay out of pocket before your insurance kicks in for the remainder of your claim.
The III reports that raising your deductible from $200 to $500 may lower your annual premium by 15% to 30% while increasing it to $1,000 could save you up to 40%. Ask your provider how much raising your deductible would lower your rates. It may be worth considering if the difference is significant, but only if you can comfortably cover the out-of-pocket repair cost if you need to file a claim.
“Raising deductibles to $1,000, $2,500 or $5,000 can lower the cost of insurance, but be sure that you have enough in savings to comfortably pay the deductible. If coming up with the funds to cover a high deductible would be difficult, then you will have to pay the higher premium for lower deductibles,” Kress Staheli, a Farmers Insurance agent, says.
3. Take advantage of discounts
Most insurers offer various discounts, but you may not be aware of them. Some of the most common car insurance discounts include:
- Maintaining a good driving record
- Bundling more than one policy
- Driving fewer than the average number of miles per year
- Being a student with a high grade point average
- Having a car with an anti-theft device or premier safety features
Talk with your insurance agent to review your policy and explore potential discounts. You may be eligible for more savings than you realize.
“My agency offers an annual review for policyholders, and often during those reviews, insureds find additional, lesser known, discounts for things like occupation, payment method, policy delivery method, use of an app to track safe driving or discounts for adding additional policies,” says Staheli.
4. Improve your credit score
Many states allow insurers to consider your credit information when setting your policy premiums.
“The thinking is that if you have good credit, you’re likely to be more careful in other areas of your life, including driving, so you’re likely to be less of a claim risk,” says Marquit.
If your credit has improved since you opened your policy, ask your insurer for a rate review to see if you qualify for a lower rate. If not, it may be worth shopping other providers to compare quotes and find a better deal.
5. Drop comprehensive and collision coverage
If you’re financing your vehicle, lenders and leasing companies typically require full coverage auto insurance, which includes comprehensive and collision coverage. Comprehensive and collision coverage helps to pay for repairs or replacement if your car is stolen, damaged by fire, vandalism, or severe weather (comprehensive) or involved in an accident (collision). If you own your car outright, you might consider dropping these coverages and keeping only liability insurance instead, which could help you save a substantial amount.
Note, though, that without this coverage, any repair or replacement costs related to your vehicle will not be covered if you’re at fault in an accident or your car is stolen or damaged. A general guideline is that it could make sense to drop comprehensive and collision coverage if your car’s value is less than 10 times your annual premium. Keep in mind, however, that before you drop this coverage, you should make sure you can afford to cover these types of costs for your own vehicle if you need to file a claim.
6. Consider switching to a pay-per-mile policy
If you drive fewer than 10,000 miles per year, a pay-per-mile insurance plan could offer significant savings compared to standard insurance policies. This type of policy, which is different from a policy with a low-mileage discount, charges a base rate plus a per-mile fee. A pay-per-mile plan can be a wise choice if you work from home or simply don’t drive much, as it bases your premium on actual mileage rather than a flat rate.
Bear in mind that not all insurers offer pay-per-mile plans, and those that do may not provide them in every state. Coverage may also be limited to vehicles within a specific age range.
The bottom line
Car insurance rates aren’t likely to fall anytime soon, but you can still save money by shopping and comparing quotes, raising your deductible, taking advantage of discounts and following other proven strategies.
If it’s been a while since you’ve reviewed your auto insurance policy, contact your agent now or get quotes from other providers to see how much you might save. Even a slight rate reduction could add up to hundreds of dollars in annual savings.
