12 Easy Ways to Save on Car Insurance Without Sacrificing Coverage

Key Takeaways

• Car insurance premiums have increased dramatically, jumping 42% from 2022 to 2024, with the average driver now paying $2,313 annually for full coverage
• Simple changes like raising your deductible from $500 to $1,000 can reduce premiums by 20-25%, potentially saving $400-500 per year
• Shopping around for quotes from at least three insurers can save you a median of $461 annually, with some drivers saving hundreds more
• Bundling your home and auto insurance policies typically saves 10-25% on premiums, while going paperless and setting up autopay can add another 5-10% in discounts
• Maintaining a clean driving record and improving your credit score are two of the most impactful long-term strategies for keeping insurance costs low

Table of Contents

• Understanding Why Car Insurance Costs Keep Rising
• Shop Around and Compare Multiple Quotes
• Maximize Available Discounts
• Adjust Your Deductibles Strategically
• Bundle Your Insurance Policies
• Take Advantage of Low-Mileage Programs
• Keep Your Vehicle Well-Maintained
• Improve Your Credit Score
• Consider Usage-Based Insurance Programs
• Complete a Defensive Driving Course
• Review and Adjust Your Coverage Annually
• Be Strategic About Filing Claims
• Frequently Asked Questions

Understanding Why Car Insurance Costs Keep Rising

If you’ve experienced sticker shock when reviewing your car insurance bill lately, you’re not alone. According to recent data from AARP, car insurance premiums have surged 42% from 2022 to 2024, with the average American now paying $2,313 annually for full coverage. That’s a jump of nearly $700 in just two years.

The increases haven’t stopped there. Insurance rates rose another 11.3% in 2024, following a staggering 20.3% increase in 2023, according to the U.S. Bureau of Labor Statistics. Multiple factors are driving these increases, including inflation-driven costs for vehicle repairs, expensive auto parts, rising medical expenses, and an increase in severe weather events that result in costly claims.

Industry analysts warn that ongoing trade disputes and tariffs could push premiums even higher. Insurance comparison platform Insurify predicts an additional 4% increase by the end of 2025 as tariffs affect the cost of imported auto parts and vehicles, particularly electric and foreign models that rely heavily on overseas components.

While these trends are concerning, the good news is that you have more control over your insurance costs than you might think. By implementing the following strategies, you can significantly reduce your premiums without sacrificing the coverage you need.

Shop Around and Compare Multiple Quotes

One of the most effective ways to save on car insurance is also one of the simplest: shop around. According to a 2024 Consumer Reports survey, drivers who switched insurers in the past five years saved a median of $461 annually. Some saved even more.

Different insurance companies assess risk differently, which means rates can vary dramatically for the same driver with identical coverage. A study from Consumer Reports found that rates can differ by hundreds of dollars per year depending on the insurer you choose.

Make it a habit to compare quotes from at least three different insurance companies every year or two. You can obtain free quotes directly from major insurers by calling them or visiting their websites. Another option is working with an independent insurance agent who represents multiple companies, allowing you to compare your options efficiently in one place.

Insurance comparison websites like The Zebra, Insurify, and others can also help you quickly gather quotes from multiple providers. Just be aware that some comparison sites may sell your contact information to third parties, so consider using a separate email address specifically for insurance shopping.

Maximize Available Discounts

Insurance companies offer a surprisingly wide array of discounts that many policyholders don’t take advantage of simply because they don’t know they exist. These discounts can add up to significant savings, yet they often aren’t applied automatically. Here are some of the most common money-saving opportunities:

Paperless and Automated Payment Discounts

Simply opting for electronic billing statements instead of paper bills can save you 4-10% on your premium, depending on your carrier. Setting up automatic payments can net you an additional 5% discount. These are among the easiest discounts to claim—you just need to enroll.

Multi-Policy Bundling

Bundling your home and auto insurance with the same company typically saves 10-25% on your premiums. Progressive reports that new customers save more than 20% on average by bundling these policies, while Nationwide offers discounts up to 15%. If you insure multiple vehicles, you may also receive a multi-car discount of 10-25%.

Safety and Security Discounts

Installing anti-theft devices like car alarms or stolen vehicle recovery systems can reduce your premium by 5-20% or more, depending on your location and carrier. Vehicles with advanced safety features such as automatic emergency braking, blind spot monitoring, and lane departure warnings may also qualify for discounts.

Membership and Affiliation Discounts

Many insurers offer discounts to members of various organizations. AARP members may qualify for up to 10% off through The Hartford. AAA members typically save 5% on premiums. Veterans and active military personnel often receive discounts of 10-15% to thank them for their service. Check whether your insurer offers discounts for professional associations, alumni groups, or other organizations you belong to.

Good Student Discounts

If you have a teen driver on your policy who maintains good grades (typically a B average or better), many insurers will offer a discount. This can help offset some of the significant cost increases that come with adding a young driver to your policy.

The key to maximizing discounts is to ask your insurance agent or company representative specifically what’s available. Many discounts require you to request them rather than being applied automatically.

Adjust Your Deductibles Strategically

Your deductible is the amount you pay out of pocket before your insurance coverage kicks in when you file a claim. It’s one of the most powerful levers you have for adjusting your premium costs.

Raising your deductible from $500 to $1,000 can lower your collision and comprehensive coverage costs by 20-25% on average, according to industry data. For a driver paying $2,000 annually, that translates to savings of $400-500 per year. Over a five-year period, that’s $2,000-2,500 in savings.

Before increasing your deductible, make sure you have enough cash savings set aside to cover the higher out-of-pocket cost if you need to file a claim. Financial experts from the Insurance Information Institute recommend having at least enough in your emergency fund to cover your deductible comfortably.

Consider this: the average driver files a claim only once every 17-18 years. If you have a clean driving record and feel confident in your abilities behind the wheel, the long-term savings from a higher deductible often outweigh the risk of paying more if an accident does occur.

Bundle Your Insurance Policies

We mentioned bundling briefly in the discounts section, but it deserves special attention because of how much money it can save you. When you purchase multiple types of insurance from the same company—typically home and auto, but also potentially renters, umbrella, boat, or RV insurance—insurers reward your loyalty with substantial discounts.

State Farm reports that customers who bundle policies save an average of $1,273 annually. That’s more than $100 per month back in your pocket. Even more modest bundling discounts of 10-15% can add up to several hundred dollars in annual savings.

However, bundling isn’t always the best choice for everyone. Sometimes you can save more money by purchasing each type of insurance from different companies that specialize in that particular coverage. The only way to know for sure is to compare: get quotes for bundled coverage from one company versus separate quotes for each type of insurance from multiple providers.

Take Advantage of Low-Mileage Programs

The average American drives about 14,500 miles per year. If you’re driving significantly less than that—perhaps because you work from home, are retired, or live in a walkable urban area—you may qualify for low-mileage discounts.

Many insurers offer reduced rates for drivers who log fewer than 10,000 miles annually. According to data from Money, reporting lower annual mileage can save you around $116 per year or more, depending on your insurer and how much less you drive compared to the average.

The COVID-19 pandemic permanently changed driving patterns for millions of Americans. With more than 20 million people now working from home, there are about 9 million fewer commuters on the road during peak hours compared to pre-pandemic levels. If your commute has disappeared or shortened dramatically, make sure your insurance company knows about it.

Some insurers also offer pay-per-mile policies, where you pay a low monthly base rate plus a per-mile charge for each mile driven. This can be an excellent option if you drive very little, with some drivers reporting savings of 30-40% or more compared to traditional policies.

Keep in mind that most insurers won’t automatically apply low-mileage discounts. You’ll need to contact them and specifically ask about mileage-based savings programs. Some companies may require you to submit periodic odometer readings to verify your mileage.

Keep Your Vehicle Well-Maintained

While regular car maintenance won’t directly lower your insurance premium, it plays an important indirect role in keeping your costs down over time. A well-maintained vehicle is less likely to experience mechanical failures that could lead to accidents, and insurers consider your accident risk when setting rates.

Key maintenance tasks that contribute to safer driving and potentially lower insurance costs include:

• Regularly checking and changing your engine oil
• Maintaining proper tire pressure and rotating tires as recommended
• Replacing brake pads before they become dangerously worn
• Ensuring all lights (headlights, brake lights, turn signals) function properly
• Replacing worn windshield wipers that could impair visibility
• Testing safety systems like airbags and seat belts
• Keeping your car battery in good condition

Think of vehicle maintenance as an investment in your overall driving costs. A well-maintained car is safer, which reduces your likelihood of filing a claim. Fewer claims mean you maintain your good driver discount and avoid premium increases that result from accidents.

Improve Your Credit Score

In most states, your credit score significantly impacts your car insurance rates. Insurers have found a statistical correlation between credit scores and the likelihood of filing claims, which is why they use credit-based insurance scores as one factor in determining premiums.

The impact is substantial. Research from the Consumer Federation of America found that drivers with excellent credit scores (typically 800 or higher) paid 49% less for the same coverage compared to those with fair credit scores (580-669). Those with poor credit (below 580) paid a staggering 115% more than drivers with excellent credit.

If your credit score isn’t where you’d like it to be, focus on these key strategies to improve it before shopping for new insurance:

• Pay all bills on time, especially credit card payments
• Reduce your credit utilization ratio by paying down credit card balances
• Avoid opening multiple new credit accounts in a short period
• Review your credit reports from all three major bureaus for errors and dispute any inaccuracies
• Keep old credit accounts open to maintain a longer credit history

Even modest improvements in your credit score can translate to meaningful savings on your insurance premiums. If you’re planning to shop for new car insurance, consider working on your credit score for a few months beforehand to maximize your savings potential.

Consider Usage-Based Insurance Programs

Usage-based insurance (UBI), also known as telematics programs, represents a shift toward more personalized auto insurance pricing. These programs use technology to monitor your actual driving behavior and adjust your rates accordingly.

Here’s how it typically works: you install a device in your car’s diagnostic port or download a smartphone app that tracks factors like how many miles you drive, what times of day you drive, how hard you brake and accelerate, whether you follow speed limits, and whether you use your phone while driving.

If you’re a safe driver who avoids risky behaviors, these programs can deliver substantial savings. Consumer Reports found that drivers enrolled in monitoring programs saved a median of $931 annually. Popular programs include Progressive’s Snapshot, Allstate’s Drivewise, and State Farm’s Drive Safe & Save.

However, there are important caveats to consider. First, not every driver who participates will save money. If the monitoring reveals risky driving habits, some insurers may increase your rates (though many offer a participation discount regardless of how you drive). Second, you’re giving up a certain amount of privacy by allowing your insurer to track your every move.

Before enrolling in a telematics program, ask your insurer these questions:

• What specific driving behaviors are tracked and evaluated?
• Could my rates increase based on the data collected, or is there a guaranteed minimum discount?
• How is my data used, stored, and potentially shared?
• Can I opt out if I’m not satisfied with the program?

For drivers who maintain good habits and don’t mind the monitoring, UBI programs can be one of the most effective ways to reduce insurance costs.

Complete a Defensive Driving Course

Taking an approved defensive driving or driver safety course can earn you a discount on your insurance premiums in many states. These courses teach proven techniques for avoiding accidents and handling challenging road conditions.

In 34 states plus Washington, D.C., completing such a course can reduce your premiums by up to 15%. The courses typically take 4-8 hours to complete and cost between $25-50. According to Consumer Reports, the average savings from taking a defensive driving course is approximately $233 per year—a solid return on your time and money investment.

Many insurers require you to retake the course every three years to maintain the discount. AARP’s Smart Driver course is one widely recognized option that meets requirements in most states and offers additional benefits for older drivers.

Beyond the financial savings, these courses genuinely help improve your driving skills and may reduce your risk of accidents. That dual benefit makes them worth considering for any driver, regardless of age or experience level.

Review and Adjust Your Coverage Annually

Your insurance needs change over time, but your policy might not automatically adjust to reflect those changes. That’s why it’s crucial to review your coverage with your insurance agent at least once per year.

Life events that should trigger a policy review include:

• Changes in your commute distance or working from home
• Moving to a new city or state
• Marriage, divorce, or adult children moving out
• Paying off your car loan
• Your vehicle reaching a certain age or mileage
• Purchasing a new or additional vehicle
• Retirement or other major changes in driving patterns

For older vehicles with low market value, consider whether you still need comprehensive and collision coverage. A general rule of thumb: if your annual premium for these coverages exceeds 10% of your car’s value, it may be time to drop them and carry only liability insurance. Removing comprehensive and collision coverage can save approximately $1,165 per year on average.

However, be cautious about reducing your liability coverage to save money. While carrying only your state’s minimum required liability limits will lower your premium, it could leave you financially vulnerable if you cause a serious accident. Financial experts recommend carrying at least $100,000 in bodily injury coverage per person, $300,000 per accident, and $100,000 in property damage coverage (often written as 100/300/100).

Be Strategic About Filing Claims

Filing a claim for minor damage can sometimes cost you more in the long run through increased premiums than it would to simply pay for the repairs out of pocket. Insurance companies often raise rates after at-fault accidents, and these increases can persist for three to five years.

Before filing a claim, consider these factors:

• How much is your deductible? If repair costs are only slightly higher than your deductible, paying yourself may be wiser
• Could the claim be considered at-fault and potentially increase your rates?
• How much would your premium increase, and for how long?
• Do you have accident forgiveness on your policy that might protect you from rate increases?

For minor damage like a scraped bumper in a parking garage, paying the $800 repair bill yourself might save you thousands over the next several years compared to filing a claim that triggers a premium increase. However, always report any accident involving another vehicle, injuries, or significant damage as required by law.

Frequently Asked Questions

How much can I realistically save on car insurance?

The amount you can save varies depending on your current situation, but many drivers can reduce their premiums by 20-40% or more by implementing multiple strategies. Drivers who switch insurers save a median of $461 annually, while those who raise deductibles, bundle policies, and qualify for multiple discounts can save $1,000 or more per year.

Will shopping for car insurance hurt my credit score?

No. When insurance companies check your credit to provide a quote, they perform a “soft inquiry” that doesn’t affect your credit score. This is different from applying for a loan or credit card, which triggers a “hard inquiry” that can temporarily lower your score.

How often should I shop around for car insurance?

Financial experts recommend comparing rates from multiple insurers every 12-24 months. Insurance companies regularly adjust their pricing algorithms and target demographics, which means a company that offered you the best rate last year might not be competitive this year. Even if you don’t switch, the process helps ensure you’re getting a fair price.

Is it worth it to use an independent insurance agent?

Independent agents can save you significant time by obtaining quotes from multiple insurers on your behalf. Since they represent several companies rather than just one, they can help you find competitive rates and coverage options you might not discover on your own. There’s typically no additional cost to use an independent agent, as they’re compensated through commissions from the insurance companies.

Can I save money by paying my car insurance annually instead of monthly?

Yes, many insurers charge fees for monthly payment plans, effectively charging you interest on premium payments spread throughout the year. Paying your entire premium upfront can save 5-10% or more. However, only choose this option if you have sufficient cash reserves and won’t strain your budget by paying annually.