How To Save Money On Car Insurance: Smart Ways To Cut Down Your Costs (2024)

The average cost of car insurance is nearly $2,200 per year, according to a Forbes Advisor analysis of car insurance rates. That’s for a full coverage policy that includes liability, collision and comprehensive insurance.

But don’t automatically resign yourself to paying that much for car insurance. You may be able to save money on car insurance by shopping around or trying out some of the other tips we compiled to help you cut costs.

Six Smart Ways to Save Money On Car Insurance

1. Get Thrifty

Bargain shoppers love to sift through product reviews and hunt down good deals for everyday items like frying pans and smartphones, but too many folks neglect to employ the same strategy when shopping for car insurance. Don’t skip this step!

Insurers don’t price their policies the same so the best way to find a good price is to compare car insurance quotes from multiple insurers. Make sure you compare identical policy coverage and limits so it’s an apples-to-apples comparison.

To save money on car insurance, only buy the coverage you need and skip extras you don’t, such as rental reimbursem*nt if you own an extra car. You can get free car insurance quotes online or by contacting an independent car insurance agent.

Don’t be scared to switch car insurance companies if you find auto insurance savings elsewhere. It’s simple to make the change. Just be certain not to have a gap in coverage to keep your rates low.

2. Bundle Up

A good way to save on insurance is a multi-policy discount, also known as a bundling discount. That’s when you buy more than one type of insurance from the same company. For example, the best home and auto insurance bundles offer discounts that range from 6% to 23%, based on Forbes Advisor’s analysis.

If your residence is a rental, you may want to consider an auto and renters insurance bundle. You can also bundle your auto with other types of insurance, such as condo, motorcycle and life insurance.

3. Look for Discounts

Bundling is hardly the only car insurance discount out there. Car insurance companies offer more than a dozen common discounts. For example, a good driver discount can save you between 10% to 40%, depending on the insurance company.

You’ll also find discounts for insuring more than one vehicle, car safety features and paying your premium in full. If you have a teenage or young adult driver in school, you can find car insurance discounts for students.

4. Get Defensive

Another way to cut car insurance costs is by taking an approved defensive driving course. This discount usually applies to drivers over a certain age (such as 50 or older), but it can shave 5% to 10% off your car insurance costs.

5. Choose Your Vehicle Wisely

If you’re looking to buy a new or used car, consider how the type of car you choose will impact your car insurance cost. Insurers look at the frequency and cost of and past claims for specific models when setting their rates.

We found that the Honda CR-V, Jeep Wrangler Sport and Subaru Crosstrek were the least expensive cars to insure. The most expensive cars to insure were the Tesla Model S Performance, Lexus ES 300H and Volvo XC90 T8 Inscription.

You can compare car insurance costs for different car models by requesting quotes online or contacting an independent insurance agent.

6. Bump Up Your Deductible

Another common way to save is by choosing a higher car insurance deductible. The deductible is the amount of money your insurer will deduct from your claims check. Common car insurance deductible amounts are $250, $500 and $1,000. We found that drivers who raise their car insurance deductible save between 7% and 28% per year, on average.

But before you proceed with this step, make sure you can afford a higher deductible. If you can’t comfortably cover a higher deductible, it’s not worth the financial hardships that could potentially come with a car accident claim.

How to Find a Cheap Car Insurance Company

Shopping around for the best prices is the best way to find a cheap car insurance company. We found that Auto-Owners had the best rates available to the general public in our analysis of the cheapest car insurance. Auto-Owners is $439 cheaper per year for good drivers than the average annual cost for good drivers.

But Auto-Owners insurance might not be the cheapest company for you. Your costs will depend on your driving history, where you live, the type of car you drive and in some states, your credit score.

For example, we found Westfield car insurance has the best rates for drivers with a speeding ticket on their record. That’s why it’s so important to gather quotes and consider these other steps to save money on car insurance:

• Ask for discount review from your insurance agent.
• Bundle your insurance policies.
• Compare car insurance costs and switch companies if you can save.
• Choose a car that’s cheaper to insure.
• Consider raising your deductible.
• Take a defensive driver course.