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8 Ways to Get the Cheapest Car Insurance Rates Possible

Shop around for the best rate, and don't overlook the smaller insurers you might not have heard as much about.
May 30, 2019
Auto Insurance, Insurance
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None of us wants to spend more than we need to for car insurance, but it isn’t always obvious how to get lower rates.

Dozens of insurance companies, large and small, are vying for your business. Many have an eye-glazing assortment of policy options, making it hard to compare policies and figure out who’s offering lower car insurance rates.

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Here are eight things you can do to ensure you get good coverage at the cheapest possible rate.

1. Don’t assume any one company is the cheapest

Some companies spend a lot of money on commercials to convince you they offer the lowest car insurance rates. But no single insurer is the low-price leader for everyone. The insurance company that’s cheapest for one person in one place might be the most expensive option for a driver in a different state.

The only way to ensure you’re getting the lowest rate possible is to shop around.

A NerdWallet analysis of rates shows why shopping around is so important. Here are some of the rates we found for a 40-year-old driver with good credit and a clean driving record, buying a full coverage policy:

  • In Alabama, Allstate would charge $1,287 a year, on average — the cheapest rate in the state for a driver without a military connection. Geico’s average rate is $487 higher.
  • In Oregon, it’s the opposite: Geico is cheapest, with an average rate of $1,221, and Allstate’s average is $729 higher.
  • Esurance is the cheapest option for California drivers at $1,196, on average, but in New York, it’s the most expensive at $3,544.

» COMPARE: Car insurance rates

2. Don’t ignore local and regional insurers

Just four companies — Allstate, Geico, Progressive and State Farm — control more than half of the nation’s auto insurance business. But smaller, regional insurers such as Auto-Owners Insurance and Erie Insurance often have higher customer satisfaction ratings than the big names — and they may have lower car insurance rates, too.

» MORE: The best car insurance companies

3. Ask about discounts

Insurers provide a variety of discounts, which can mean lower insurance rates for customers who:

  • Bundle car insurance with other policies, such as homeowners insurance.
  • Insure multiple cars with one policy.
  • Have a clean driving record.
  • Pay their entire annual or six-month premium at once.
  • Agree to receive documents online.
  • Own a car with certain anti-theft or safety features.
  • Are members of particular professional organizations or affiliate groups.

Don’t be swayed, however, by a long list of possible discounts. Compare rates from multiple insurers.

4. Pay your bills on time

Your credit score is a significant factor in the car insurance quotes you receive — except in California, Hawaii and Massachusetts, which don’t allow insurers to consider credit when setting rates. Insurance companies say customers’ credit has been shown to correlate with their chances of filing claims.

A NerdWallet analysis 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.)

Improve your credit — and get lower insurance rates — by paying your bills on time and reducing your debt. Track your progress by checking your credit score regularly.

5. Check insurance costs when buying a car

You probably already pay attention to factors such as fuel efficiency and repair costs when picking a car to buy, but you should also consider insurance premiums. A NerdWallet analysis of the cheapest cars to insure among top-selling vehicles found the lowest insurance rates are for the Subaru Outback, the Jeep Wrangler and the Honda CR-V.

6. Skip comprehensive and collision coverage for an older car

Collision coverage pays to repair the damage to your vehicle from another car or an object such as a fence. Comprehensive coverage pays to repair vehicle damage from weather, animal crashes, floods, fire and vandalism. It also covers car theft. But the maximum payout under either policy is limited by the value of the car if it’s totaled or stolen. If your car is older and has a low market value, it may not make sense to shell out for these types of coverage.

» MORE: Understanding collision and comprehensive insurance

7. Raise your deductible

If you buy comprehensive and collision coverage, you can save money by opting for higher deductibles. (There is no deductible on liability insurance, which pays for the damage you cause others in an accident.)

8. 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. By signing up for these programs, you let your insurer track your driving in exchange for possible discounts based on how much you drive, when you drive and how well you drive.

» MORE: Should you give up privacy for car insurance discounts?

If you drive less than 10,000 miles a year, you might be able to save money with a mileage-based insurance program such as Metromile, Allstate’s Milewise, Nationwide’s SmartMiles or Esurance Pay Per Mile. Metromile is available in eight states; Allstate’s Milewise is offered in 12 states and Washington, D.C.; Nationwide’s SmartMiles is available in Illinois; and Esurance Pay Per Mile is available in Oregon.

NerdWallet averaged rates for 40-year-old men and women with no incidents on record and credit in the “good” tier for 20 ZIP codes in each state and Washington, D.C., from the largest insurers, up to 12 in each state. Sample drivers had these 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 a 2015 Toyota Camry in all cases. These are sample rates generated through Quadrant Information Services. Your own rates will be different.