In this article, we at the MarketWatch Guides team will highlight a few proven strategies for saving money on car insurance. We’ll also discuss the average costs of auto coverage and what goes into the price you pay. Once you’re ready to explore your options, check out our rankings of the best car insurance companies and cheapest car insurance companies to further inform your decision.
Key Takeaways
- Comparing provider quotes is essential to getting the lowest rates possible on your car insurance.
- Take advantage of discounts you qualify for and take your state’s driver safety course to receive additional reductions for car insurance premiums.
- Depending on your risk tolerance and financial situation, reducing coverage and deductibles can save you thousands of dollars a year.
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How To Get Cheaper Car Insurance
When it comes to getting lower car insurance rates and finding a cheap car insurance company, comparing quotes from multiple providers is a great strategy. But that doesn’t mean it’s the only way to lock in lower rates. In the section below, we’ll detail some other ways to save on a car insurance policy.
Here are a few more ways you can reduce your car insurance bill without compromising quality vehicle protection:
If you drive an older, less valuable vehicle, it may not be worth it to have collision and comprehensive protection. It may also be unnecessary if you can afford out-of-pocket costs in the event your vehicle is damaged in an accident. However, what coverage you need is highly dependent on your driving habits, where you live and, in the end, your personal risk tolerance.
Possible savings: $1,004 to $3,006 annually on average
All car insurance companies have discount offerings you can take advantage of depending on your driver profile, vehicle and even how you pay. Below we’ve broken down the types of car insurance discounts you can get:
- Driver-related: These can be related to your age, occupation, military affiliation or your driving record.
- Vehicle-related: Safety features on your car can get you premium reductions, making some newer cars cheaper to insure than older models.
- Policy-related: Bundling multiple policy types, automatic payments and opting for paperless billing can save you money.
Possible savings: 3% to 33% depending on the provider
A higher car insurance deductible leads to lower premiums, since it means the insurer pays less out of their pocket. You’ll need to find the right balance of risk and savings to make this strategy work for you.
Possible savings: Varies by provider
Most car insurance companies will give car insurance discounts if you take a state-approved safety or education course.
Possible savings: 5% to 10% depending on state and provider
Having anti-theft mechanisms in your car such as GPS trackers and vehicle recovery service plug-ins like OnStar® can help you save. In addition, etching your vehicle identification number (VIN) into the windshield can also prevent theft and help you save further.
Possible Savings: Up to 23%
Some companies offer a pay-per-mile car insurance program that you may qualify for. These programs charge a monthly base rate plus an additional cost-per-mile — typically between $0.06 and $0.08. If you don’t drive very much, this option can help save you hundreds of dollars per year. There are also telematics programs that can save you up to 40% for good driving by monitoring your driving habits through a mobile app or plug-in device.
Possible savings: Up to 40% or more
When you’re coming up on a car insurance renewal, it’s a good idea to compare other providers to see if you can get a better rate, especially if you’re having a major life change like moving or getting married.
Possible savings: Up to $1,395 annually on average
California, Hawaii, Massachusetts and Michigan ban the use of credit scores in determining car insurance rates. But everywhere else, credit score is the third most influential factor when determining your car insurance rates, and a poor one can raise premiums by more than 90%. If you live in a state that considers credit and your score is poor or fair, improving it can help you save significantly.
Possible savings: $1,687 annually on average
If you’re looking for a new vehicle, choosing a car that’s inexpensive to repair can help you save. We’ve linked our articles that break down the cheapest cars to insure and the most expensive vehicles to insure to help guide you through this process.
Possible savings: Up to $707 annually
How To Save on Car Insurance: The Bottom Line
Even though many factors influence how much you pay for coverage, you can find an affordable auto insurance policy if you know where to look. One of the best ways to save is to compare car insurance quotes from multiple providers to find the best choice for your needs.
Our Recommendations for Affordable Car Insurance
When starting your search for affordable car insurance, we recommend checking out State Farm, Geico and USAA.
State Farm: Best Customer Experience
As the largest insurer in the U.S., State Farm has an excellent industry reputation and great customer service record. It’s typically one of the most affordable insurers and offers especially low rates for student and teen drivers. State Farm policyholders can save with the company’s usage-based program, which offers discounts for safe driving habits.
Keep reading: State Farm Insurance Review
Geico: Best for Budget-Conscious Drivers
In our industry-wide review, our team recognized Geico as one of the top choices for the average driver. Geico has some of the lowest average rates for a wide range of drivers, and policyholders can take advantage of numerous discounts. The company’s extensive selection of add-on coverage options, including mechanical breakdown insurance, is a significant draw as well.
Keep reading: Geico Insurance Review
USAA: Best for Military Members
Although USAA coverage is limited to military members, veterans and their immediate families, it’s an excellent choice if you qualify for coverage. USAA members get the best of both worlds: cheap car insurance and quality customer service. Reviews from customers consistently give the company high marks, and the insurer scores well in many J.D. Power customer satisfaction studies. It tends to be the cheapest car insurance provider for those who qualify.
Keep reading: USAA Insurance Review
Save Money on Car Insurance: FAQ
Below are some frequently asked questions about how you can save on car insurance:
The simplest way to save on car insurance premiums is to compare quotes from multiple providers. You can also ask your current provider about discounts you might be eligible for, and bundle policies if possible. Raising your deductible is another good way to bring your premiums down, but you need to make sure you can pay higher out-of-pocket costs before doing so.
Yes, many auto insurance companies offer discounts for paying annual insurance premiums up front rather than on a monthly or bi-monthly basis.
The type of vehicle you drive, your location, your age and your driving record all significantly impact the price you pay for car insurance. The coverage options and deductible you choose also play major roles in determining car insurance costs. In many states, your credit history can affect how much you pay for coverage as well.
Our cost estimates show that 35-year-old married drivers with good credit and clean driving records pay an average of $148 per month for car insurance. Paying around $100 per month for quality auto coverage is a good price.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
- Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
- Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.
Our credentials:
- 800 hours researched
- 130+ companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at [email protected].
