How to Lower Your Car Insurance: 15 Ways That Actually Work (2025)

So my insurance went up 23% this year—I mentioned this in another article but I’m still mad about it—and I spent like three hours shopping around for better rates. Found a company that would cover me for almost $400 less per year with the SAME coverage. Switched immediately. Done.

That’s $400 I was just leaving on the table. For years, probably. Because I assumed my rate was reasonable and didn’t bother to check.

Here’s the thing though—most people don’t shop around. 42% of drivers considered switching insurers last year, but only 14% actually did. Everyone else just… accepted their renewal rate and moved on. That’s wild to me. Insurance companies are literally counting on your laziness.

So here’s everything I know about lowering your car insurance costs. Some of these are obvious and you’ve probably heard them before. Some of them you haven’t. All of them actually work.

1. Shop around (I know, obvious, but nobody does it)

This is the single most effective thing you can do. Get quotes from at least 3-4 companies. It takes like 30 minutes online. The same coverage can cost wildly different amounts at different insurers because they all use different algorithms and weight factors differently.

I got quotes ranging from $1,400 to $2,100 for the exact same coverage. Same car. Same address. Same driving history. $700 difference just because different companies calculate risk differently.

Do this every year when your policy renews. Your circumstances change. Companies change their rates. The cheapest insurer three years ago might not be the cheapest now.

2. Raise your deductible (if you can afford it)

Going from a $500 to $1,000 deductible can cut your premium by 15-40% for collision and comprehensive coverage according to the Insurance Information Institute. That’s real money.

But—and this is important—only do this if you actually have $1,000 sitting in savings that you could spend on a car repair tomorrow. Don’t raise your deductible to save $20 a month if you’d be screwed trying to come up with the money after an accident.

3. Bundle your insurance

If you have renters or homeowners insurance, get it from the same company as your auto insurance. Bundling discounts are usually 5-25% off your auto premium. Sometimes more.

I bundle my auto and renters insurance and save something like $180 a year compared to having them separate. Easy money.

4. Actually ask about all available discounts

Insurance companies have discounts for everything. But they don’t always advertise them and sometimes you have to specifically ask:

Safe driver discount—no accidents or violations for 3-5 years

Defensive driving course discount—take a cheap online course, get 5-10% off

Good student discount—if you have a kid on your policy with good grades

Low mileage discount—if you drive less than average (usually under 7,500-10,000 miles/year)

Pay in full discount—pay your whole premium upfront instead of monthly

Paperless discount—sign up for electronic statements

Autopay discount—set up automatic payments

Loyalty discount—been with the same company for years

Professional association discounts—certain employers or organizations have partnerships

Military/veteran discount

Anti-theft device discount

Safety feature discounts—airbags, anti-lock brakes, backup cameras (most new cars have these)

Call your insurance company and literally go through this list with them. “Do you have a discount for this? What about this?” You might be missing discounts you qualify for.

5. Improve your credit score

In most states (not California, Hawaii, or Massachusetts), insurance companies use your credit score to set rates. Better credit = lower premiums. This sucks and feels unfair but it’s how the system works.

If your credit has improved since you got your policy, you might qualify for better rates now. Shop around and see.

6. Review your coverage—you might be over-insured

Look at what you’re actually paying for. Are you carrying collision and comprehensive on a car that’s only worth $3,000? The math might not make sense anymore.

If your car is old and you could afford to replace it out of pocket, consider dropping collision and comprehensive and just keeping liability coverage. You’d lose out if the car got totaled, but you’d also save hundreds a year in premiums.

Also check if you’re paying for stuff you don’t need. Roadside assistance through insurance when you already have AAA. Rental reimbursement when you have a second car you could use. Gap insurance when your car is paid off. Don’t pay twice for things.

7. Drive less

If you work from home, retired, or just don’t drive much—tell your insurance company. Many insurers offer low mileage discounts for people under 7,500 or 10,000 miles per year.

Some companies offer pay-per-mile insurance where your premium is directly tied to how much you drive. If you’re only doing 5,000 miles a year, this can be way cheaper than traditional insurance.

8. Consider usage-based insurance

Those “plug this device into your car” or “download our app” programs that track your driving? They can actually save you money if you’re a good driver. We’re talking 10-30% discounts for safe driving behavior.

The catch: they track everything. Your speed, braking, what time you drive, how far you go. If you’re someone who accelerates hard and brakes late, this will backfire and your rates might go up. But if you’re genuinely a cautious driver, it’s worth considering.

I tried one of these for a year. Saved like 15%. But I also became paranoid about my driving in a way that was kind of annoying, so when the discount period ended I opted out. Worth it for some people, not for others.

9. Take a defensive driving course

A lot of insurers give 5-10% off for completing an approved defensive driving course. These courses are usually cheap ($20-50) and can be done online in a few hours. Do the math—if the discount saves you $150 a year and the course costs $30, that’s a good trade.

Some states even require insurers to offer this discount.

10. Pay your premium in full

Most insurers charge fees for monthly payments—like $5-10 per month in service charges. Paying your whole premium upfront avoids these fees. Plus some companies offer an explicit “pay in full” discount on top of that.

I know not everyone can drop $1,500 or whatever all at once. But if you can swing it, you’ll save $60-120 a year just on fees.

11. Think about what car you drive

Your car affects your insurance cost a lot. Newer cars cost more to insure. Expensive cars cost more to insure. Cars with high theft rates cost more to insure. Sports cars cost more to insure.

When you’re car shopping, get insurance quotes BEFORE you buy. A car that costs $2,000 less might cost $500 more per year to insure. Or vice versa.

My 2016 Camry is boring as hell but it’s cheap to insure because Toyotas are reliable, have low theft rates, and parts are readily available. That was part of why I bought it.

12. Check if your employer has group rates

Some employers have partnerships with insurance companies for discounted rates. Your HR department might know about group discounts you’re not aware of. Doesn’t hurt to ask.

Same goes for professional associations, alumni associations, credit unions—various organizations have insurance partnerships that could save you money.

13. Ask about disappearing deductible programs

Some insurers offer programs where your deductible goes down each year you don’t file a claim. Like $100 off per year until your deductible hits $0. These aren’t free—you usually pay a bit extra for the feature—but if you’re a consistently safe driver, it can pay off over time.

14. Don’t let your coverage lapse

Having a gap in your insurance history—even a short one—can raise your rates for years. Insurance companies see a coverage lapse as a red flag. So even if you’re between cars, consider keeping a cheap liability-only policy active, or look into non-owner car insurance.

15. Actually read your renewal notice

Don’t just glance at the total and pay it. Read what changed. Sometimes companies quietly add coverage you didn’t ask for or raise limits without telling you. Sometimes they remove discounts you should still qualify for. Know what you’re paying for.

What NOT to do to save money

Don’t lie about where you live. Don’t lie about your mileage. Don’t lie about who drives your car. Insurance companies investigate this stuff, especially after claims. Getting caught lying can get your claim denied and your policy canceled—and then you’ll have trouble getting insurance anywhere because you’ve been flagged for fraud.

Don’t drop below reasonable liability coverage just to save money. State minimums are a trap. I’ve written about this elsewhere but seriously—the difference between state minimum and adequate liability coverage is maybe $20-30 a month. Don’t risk your financial future over that.

Don’t skip insurance entirely. Some people think they can’t afford insurance so they just drive without it. This is illegal, stupid, and will absolutely wreck you financially if anything happens. There are low-cost insurance programs for people with limited income if you look for them.

Alright go do something about it

Comprehensive just walked across my keyboard—she’s supposed to stay outside but somehow got in through the back door—so I gotta go deal with that. But seriously: get quotes. Check your discounts. Review your coverage. You’re probably paying more than you need to and you don’t even know it.

I saved $400 a year by spending three hours shopping around. That’s like getting paid $133 an hour to compare websites. Worth it.