How to lower your car insurance
Car insurance can feel like a big expense, but there are simple steps you can take to lower your bill without giving up the coverage you need.
Key takeaways
- Shop around and get at least three quotes before renewing
- Ask your insurer about discounts — they may not volunteer them
- Raise your deductible only if you can cover it in a pinch
- Dropping extras on an old, low-value car can cut your bill
Car insurance is one of those bills that shows up every month whether you like it or not. If money is tight, even a small savings can make a real difference. The good news is that there are real ways to bring that cost down.
Start by shopping around. This is the single biggest thing you can do. Insurance companies all set their own prices. The same driver can get very different quotes from different companies. Try to get at least three quotes before you renew or sign anything. Many insurers let you do this online for free in just a few minutes.
Ask about discounts. Most insurance companies offer them, but they do not always tell you upfront. Common discounts include things like bundling your car and renters insurance together, paying your full premium at once instead of monthly, signing up for paperless billing, or completing a safe driving course. If you have not asked about discounts in a while, call your insurer and just ask. You might be surprised.
Raise your deductible if you can. Your deductible is the amount you pay out of pocket before insurance kicks in after an accident. A higher deductible usually means a lower monthly premium. For example, going from a $500 deductible to a $1,000 deductible could lower your bill noticeably. Just make sure you could actually cover that higher amount if something happened. Only raise it to a level you could manage in a pinch.
Look at what coverage you are paying for. If your car is older and not worth much, you might be paying for more coverage than makes sense. Comprehensive and collision coverage are great for newer or more valuable cars. But if your car is only worth $2,000, paying a lot each month for those extras may not be worth it. You can check your car's value for free on sites like Kelley Blue Book. Talk to your insurer about what makes sense for your situation.
Drive less if you can. Some insurers offer lower rates for low-mileage drivers. If you work from home, carpool, or use public transit sometimes, let your insurer know. Some companies even offer pay-per-mile programs where you only pay based on how much you actually drive.
Keep a clean driving record. Accidents and tickets raise your rates. This one takes time, but it pays off. If you have had some issues in the past, your rates may drop as those incidents age off your record, usually after three to five years depending on your state and the type of violation.
Improve your credit if possible. In most states, insurers can use your credit history as part of how they set your rate. It is not fair, and not everyone agrees with the practice, but it is legal in many places. Even small improvements to your credit score over time can lead to lower insurance costs down the road.
Consider usage-based insurance programs. Many big insurers now offer apps or small devices that track your driving habits like how fast you brake, how often you drive at night, and how many miles you log. Safe, low-mileage drivers often save money through these programs. Just know that your data is being shared with the insurer, so read the details before signing up.
Do not let your policy lapse. If your coverage runs out and there is a gap, insurers often charge you more when you get a new policy. Even if money is really tight, try to keep at least the minimum required coverage active.
Lowering your car insurance takes a little effort, but it is doable. Start with one step, like getting a few new quotes or calling to ask about discounts. Small actions can add up to real savings over time.
Related FAQs
Common questions about this topic, answered simply.
How much can I realistically save by shopping around for car insurance?
Savings vary a lot depending on your situation, but switching insurers or getting competing quotes can sometimes save drivers hundreds of dollars a year. There is no guaranteed amount, but it costs nothing to compare quotes, so it is always worth checking. Even saving $20 or $30 a month adds up over a year.
Will raising my deductible actually lower my monthly payment?
In most cases, yes. A higher deductible typically means a lower monthly or six-month premium. Just be honest with yourself about whether you could cover that higher out-of-pocket cost if you had an accident. Only raise your deductible to an amount you could realistically manage.
Can I get car insurance if I have bad credit?
Yes, you can still get car insurance with bad credit. In most states, insurers can use credit as one factor in setting rates, which may mean you pay more than someone with strong credit. Shopping around is especially important in this case, since different companies weigh credit differently.
What happens if I let my car insurance lapse?
A lapse in coverage can lead to higher rates when you get a new policy, because insurers often see a gap as a risk factor. In most states, driving without insurance is also illegal and can result in fines or license suspension. Try to keep at least minimum required coverage active, even if you have to adjust your plan temporarily.
Are usage-based insurance programs safe to sign up for?
Usage-based programs can save money for safe, low-mileage drivers, but they do involve sharing your driving data with the insurance company. Before signing up, read the terms carefully so you understand what is tracked and how it might affect your rate. If your driving habits are safe and consistent, these programs can be a good fit.
What discounts should I ask my insurance company about?
Common discounts include bundling policies, paying in full upfront, going paperless, being a safe driver, completing a defensive driving course, or being a low-mileage driver. Discounts vary by company and state, so it is worth calling your insurer directly and simply asking what you might qualify for.
Keep reading
Bundling insurance policies: when it saves
Bundling your policies with one insurer usually earns a discount — but it's worth checking that the bundled price really beats buying separately.
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Read Insurance basicsHow to lower your homeowners insurance
Homeowners insurance is a big annual bill, so trimming it can free up real money — without leaving your home underprotected.
Read Insurance basicsHow to lower your renters insurance
Renters insurance is already cheap, but a few moves can make it even cheaper while keeping you protected.
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