How to Get the Cheapest Car Insurance Rates Possible
Car insurance is expensive, but taking these steps can lower your premiums.
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Comparing car insurance rates from a few companies can help you find the cheapest coverage available to you.
Before you renew your policy, shop around to make sure that you’re still getting the most affordable car insurance.
Check that your coverage fits your car — if you drive an older model, you may be able to drop comprehensive and collision coverage.
Car insurance rates generally go up in the long run due to rising repair costs, more frequent claims and other factors, but you can still do a few things to lower your costs.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.
1. Compare rates from multiple insurers
No two car insurers have exactly the same rates. The best way to find the most affordable car insurance available to you is by comparing the rates you get from three (or more) different insurers before choosing a policy.
This way, you can quickly spot which insurers are offering you a bargain — and which are charging more than what’s typical for your driving history and coverage needs.
It’s also a good idea to compare rates before renewing an existing policy. You might learn that your previously-cheap policy is now one of the most expensive options. If you find a lower rate, you can switch insurers and save money.
2. Consider dropping coverage you don’t need
The cost of comprehensive and collision coverage significantly increases the price of car insurance. While it’s essential to have this coverage while paying off your auto loan, you could lower your insurance rates by dropping it once you own your car outright.
But beware: this isn’t the best option for everyone. You shouldn’t consider dropping your policy’s comprehensive and collision coverage unless you’re sure you could replace a totaled car on your own.
Don’t cut too much car insurance
While dropping full coverage is a good way for some people to lower their car insurance rates, you don’t want to reduce your coverage levels too far. For example, reducing your liability insurance too far could leave you vulnerable to paying thousands of dollars in medical expenses and property damage after an accident.
3. Increase your deductible
If you buy comprehensive and collision coverage, you’ll have to choose your car insurance deductible — the amount you commit to pay when you make a claim. Increasing your deductible lowers insurance rates, while reducing your deductible causes rates to go up.
Increasing your deductibles is a dependable way to make your car insurance cheaper, but you don’t want to raise your deductibles so high that you couldn’t pay it if your car is damaged.
Compare auto insurance quotes with different comprehensive and collision deductible amounts to see how much you might save with a higher deductible.
4. Keep a safe driving record
Being involved in an at-fault accident and having to make a claim almost always makes your car insurance rates much higher. You could help to keep your insurance rates low by maintaining a clean driving record and remaining claims-free (even if that means paying for small repairs on your own).
Another way that you could lower your insurance rates as a good driver is by completing a defensive driving course. Many insurers offer discounts to drivers who complete these courses, though the amount you can save varies by company.
5. Work on your credit
Your insurance credit score is a significant factor in the cost of car insurance in most states. California, Hawaii and Massachusetts don't allow insurers to use credit when determining car insurance rates.
As you build or repair your credit history, you reduce your cost of car insurance. NerdWallet found that having poor credit can increase people’s car insurance rates by hundreds of dollars a year compared with having good credit. (In most situations, a FICO score of 579 or lower is considered “poor” credit, but insurers have their own credit models that may have a different cutoff.)
6. Check insurance costs when buying a car
If you’re thinking of buying a car, you might lower your rates by choosing certain models over others.
Typically, luxury and sports cars that come with high-tech features, expensive construction materials and higher theft risk cost more to insure. Electric cars, too, often have higher insurance rates because of their expensive batteries.
For lower car insurance, shop for safe, popular cars. We have found that the cheapest cars to insure are Subaru Outbacks and Crosstreks and Honda CR-Vs.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.
7. Consider usage-based or pay-per-mile insurance
If you’re a safe driver who doesn’t log many miles, consider a usage-based insurance program, such as Allstate’s Drivewise, Progressive’s Snapshot or State Farm’s Drive Safe & Save. These programs offer discounts to safe drivers, but signing up means sharing details about your driving habits with your insurer.
A similar option is pay-per-mile insurance, like Nationwide’s SmartMiles or USAA’s SafePilot Miles. With per-mile insurance, your rate changes every month with the number of miles you drive. Per-mile plans are best if you don't drive much, like if you work from home or rely on public transportation more than your personal vehicle.
8. Ask about discounts
Insurers typically provide car insurance discounts. While discounts vary by insurance company and the state you live in, you can usually get a discount if you:
Bundle car insurance with other policies, such as homeowners insurance.
Insure multiple cars with one policy.
Pay your entire annual or six-month premium at once.
Agree to receive documents online.
Own a car with certain anti-theft or safety features.
Are a member of particular professional organizations or affiliate groups.
Don’t be swayed, however, by a long list of possible discounts. Just because an insurer offers a lot of discounts doesn’t mean that their rates will be cheaper than the competition. It’s best to compare rates from multiple insurers.
Car insurance hacks that you should avoid
There’s a lot of bad advice on the internet about reducing car insurance costs. There are some common tips or “hacks” that might at first appear like smart ways to cut down on your insurance bill, but in reality leave you open to having your insurance canceled or not renewed and possible legal action, not to mention out-of-pocket expenses that could come from an accident.
Lying about past driving violations and claims
You might be tempted to try to lower your insurance rates by not mentioning a past speeding ticket, accident or a claim that you made while shopping for insurance. When an insurer discovers the lie, they may deny a claim or cancel your policy.
Leaving drivers off of your policy
Insurance companies require you to disclose all licensed drivers in your home. If a newly licensed driver lives with you and uses your car, you can’t just leave them off of your policy to avoid the price hike that comes with new drivers.
If you do leave them off and they’re involved in an accident, the damage they cause wouldn’t be covered — and your policy could be canceled.
Misrepresenting your location and other personal information
Car insurance rates vary, sometimes by a large amount, depending on where you live. This pricing difference causes some people to claim that they live in a cheaper city or state to lower their insurance rates. Doing this could lead to a denied claim or canceled policy.
NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for 40-year-old men and women for all ZIP codes in any of the 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information.
In our analysis, “good drivers” had no moving violations on record; a “good driving” discount was included for this profile. Our “good” and “poor” credit rates are based on credit score approximations and do not account for proprietary scoring criteria used by insurance providers. These are average rates, and your rate will vary based on your personal details, state and insurance provider.
Sample drivers had the following coverage limits:
$100,000 bodily injury liability coverage per person.
$300,000 bodily injury liability coverage per crash.
$50,000 property damage liability coverage per crash.
$100,000 uninsured motorist bodily injury coverage per person.
$300,000 uninsured motorist bodily injury coverage per crash.
Collision coverage with $1,000 deductible.
Comprehensive coverage with $1,000 deductible.
In states where required, minimum additional coverages were added. We used the same assumptions for all other driver profiles, with the following exceptions:
For drivers with minimum coverage, we adjusted the numbers above to reflect only the minimum coverage required by law in the state.
We changed the credit tier from “good” to “poor” as reported to the insurer to see rates for drivers with poor credit. In states where credit isn’t taken into account, we only used rates for “good” credit.
For drivers with one at-fault crash, we added a single at-fault crash costing $10,000 in property damage.
For drivers with a DUI, we added a single drunken driving violation.
We used a 2018 Toyota Camry LE in all cases and assumed 12,000 annual miles driven.