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Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors. Her work has appeared on The Huffington Post, Business Insider, Kiplinger’s, MSN Money, and The Washington Post, and she’s been writing for Compare.com since 2023. Her background in education allows her to help people relate to and understand complex financial topics.
She’s the author of several books, including The 5 Years Before You Retire, End Financial Stress Now, and the brand-new book, Stacked: Your Super Serious Guide to Modern Money Management, written with Joe Saul-Sehy.
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Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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While we make money through partnerships with some of the brands we discuss in our articles, our editorial team operates 100% independently, and these partners never influence or affect the topics, reviews, ratings, or recommendations we provide. We never guarantee favorable reviews or mentions in exchange for compensation from any brands or partners, and we uphold strict editorial standards to ensure our content is always independent, truthful, and unbiased.
Is your car insurance premium making it difficult to stick to your budget? The cost of auto insurance has increased sharply over the past few years — with an 11.3% price jump in 2024 alone.[1] That well outpaced the 2.9% overall rate of inflation, according to the Bureau of Labor Statistics.
The good news is you don’t have to just accept these higher rates. You can use several car insurance hacks to reduce your premiums — even with auto insurance prices spiking. Here are 11 of the best tips for cheaper car insurance.
The cost of auto insurance increased nearly 12% in 2024.
The national average cost of car insurance is $151 per month.
Some of the best hacks for saving on car insurance include shopping around, adjusting coverage levels, and asking for discounts.
Even if you haven’t filed a claim recently, your car insurance premiums can increase when you renew your policy. Factors that can lead to higher insurance rates include the number of crashes, the cost of medical care, and even the unemployment rate in your ZIP code.
Car insurance policies are generally for a six-month or 12-month period. Savvy drivers who opt for a six-month policy can compare quotes twice per year. And while some car insurance companies offer loyalty discounts for maintaining your policy, the money you save by switching insurers might lead to more savings than the potential loyalty discount.
Liability policies start as low as $16 per month.
Lots of different factors influence how much you pay for car insurance. Your age, your gender, and the state you live in are just three factors outside of your control. It’s important to evaluate your personal situation to address any pain points.
But your driving record and credit history are some of the biggest factors within your control that can drive up your insurance costs. For example, a single speeding ticket, at-fault accident, or DUI increases average rates by as much as 94%, according to our research.
You can work on safer driving habits and increase your credit to get better rates.
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The majority of car insurance companies offer discounts to eligible drivers, but many aren’t taking advantage of them. Some common discounts include:
Continuous coverage discount: Your insurer may reward your loyalty if you keep your policy with them when it’s time to renew. You can save money by doing nothing more than calling your insurance agent.
Referral discount: If a friend refers you to their insurer, both you and your friend can save money.
Affinity discount: Your employer, profession, membership organization, or military service might make you eligible for auto insurance discounts.
Automatic payment discount: Enroll in auto pay and save on your premium.
Good driver discount: If you practice safe driving habits, your insurance company will reward you with extra savings in the form of an accident-free discount.
Multi-policy discount: You can earn this discount when you purchase more than one insurance product from the same company.
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Your auto insurance premium is based on the coverage levels you choose for your vehicle. Opting for a lower coverage level instantly lowers your rates, so it’s smart to re-evaluate your coverage levels occasionally. But remember, you must have the minimum amount of coverage to meet your state-mandated requirements for coverage types and limits.
Adjusting your coverage levels saves you money in the short term, but be cautious about this car insurance hack. If you cause an accident where the damages exceed your coverage limits, you’ll be on the hook for the difference.
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A deductible is the amount of money you must pay before your insurer kicks in to cover your claim. Raising your deductible from $200 to $500 could save you 15% to 30% in premium costs, while switching to a $1,000 deductible could save you 40% or more, according to the Insurance Information Institute (Triple-I).[2]
The downside of increasing your deductible is that you’ll have to pay the increased amount if you file a claim. If paying the higher deductible would be hard, it may make more sense to keep a lower deductible until you can afford the higher out-of-pocket expense.
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Purchasing auto insurance and homeowners insurance from the same insurer — also known as “bundling” — can make you eligible for a multi-policy discount. That means you’ll save money on your home and auto insurance policies. The amount of money you can save varies, but it can range from 5% to an impressive 25%.
Homeowners insurance isn’t the only coverage you can bundle with your car insurance. You may also save money by bundling renters insurance, boat/motorcycle/RV insurance, life insurance, or umbrella insurance with your auto insurance policy.
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Telematics programs are becoming more popular among America’s best car insurance companies. Top programs include Progressive Snapshot, Allstate Drivewise, and State Farm Drive Safe & Save, but terms and available discounts vary by company.
When you participate in a telematics program, your insurer monitors your driving behavior through a smartphone app or a device in your vehicle.
Your auto insurer will reward you with a discount for consistent, safe driving behaviors. You can save 10% by signing up for programs like Nationwide SmartRide and earn a maximum discount of 30% with insurers like State Farm. But you could see your rates go up with some insurers for unsafe driving.
Compare personalized quotes from 100+ insurers in minutes.
Paying your auto insurance policy in full at the beginning of your new policy period could make you eligible for a paid-in-full discount. Instead of making payments in monthly installments, you would pay a lump sum at the beginning of your policy term. Insurance companies may offer a discount of 5% to 10% for making the full payment up front.
While paying in full can save you money, it may be difficult to afford this hack if you don’t have access to the lump sum. It might be easier to budget for monthly payments — even if you spend 5% to 10% more overall.
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Insuring a used car generally costs less than insuring a new one. Newer cars tend to have more technology, which makes them more expensive to repair. Also, lenders may require drivers who finance a new vehicle to purchase collision and comprehensive coverage.
While your car’s model year is an important factor in how your auto insurer calculates your premium costs, the specific make and model of your car can also affect how much you pay.
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Many drivers don’t realize that your credit history can affect how much you pay for car insurance. Many car insurance companies use your credit history to calculate your rate, but a number of states have outlawed or restricted this practice.[3]
Something called a “credit-based insurance score” helps companies understand your risk level.[4] When you apply for credit, such as a home loan, lenders look at your FICO score to predict your likelihood of repaying debt. Lenders may approve or deny your application based on your credit score.
Instead of looking at your credit score, insurance companies create credit-based insurance scores to determine your likelihood of filing an insurance claim and paying your bills on time, and they use this score to set your auto premiums. The higher your credit-based insurance score, the lower your insurance premiums.
So if you want to pay less for car insurance, make an effort to pay your bills on time, reduce the amount of debt you have, and keep a close eye on your credit report to avoid costly errors. These changes won’t happen overnight, but they could save you hundreds in the long run.
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A defensive driving course is a type of driver’s education program that focuses on helping you make better decisions behind the wheel. This includes important lessons like teaching you how to anticipate another driver’s actions so you can avoid a car accident.
Depending on where you live, your insurance company may offer you a premium discount for successfully completing defensive driver training. Some states require drivers with suspended licenses to complete a defensive driver course to reinstate their driving privileges — but drivers in this situation may not receive a discount from their insurer.
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To determine which car insurance hacks will work best for you, get answers to the most common questions about saving money on auto insurance.
You can lower your auto insurance rates in a few quick and easy ways. Start by shopping around to find the insurer with the best rates — and plan on comparing quotes every six months to find the best deal. Next, you can check your eligibility for discounts and bundle multiple policies with your insurer.
You can also consider adjusting your coverage levels, increasing your deductible, and paying your premium in full. Other ways to lower your car insurance premium include buying a used car and taking a defensive driving course.
Car insurance companies set their rates based on factors that may or may not be within your control.
You can control factors like your car’s make, model, and year, the level of coverage and deductible you choose, your driving and claims history, and the number of miles you drive.
The factors outside your control include the cost of repairs and medical care, your age and gender, and even weather trends in your area. Depending on which state you live in, your insurer may also use your credit score as a factor in determining your premiums.
Car insurance companies generally don’t have many hidden fees that consumers need to work to avoid. The most common “hidden fees” among car insurance companies are discounts you may be unaware of. For example, your insurer may give you a discount for signing up for paperless statements or automatic payments.
You may also want to check your policy to see if you’re charged processing fees for various payment options and for exceeding mileage limits.
You may be eligible for a number of car insurance discounts, including the following:
Affinity discounts because of your membership in an organization
Multi-policy discounts if you bundle insurance policies with the same company
Discounts for safety features on your car
Good driving discounts that reward a clean driving record or successful completion of a defensive driving course
Payment discounts for enrolling in auto pay or paying in full
You don’t necessarily need to avoid any type of car insurance — except insurance that doesn’t provide enough protection. For instance, if you lease or finance your car, a liability-only policy won’t satisfy lender requirements.
Buying the right car insurance involves understanding your needs and choosing the right coverage for your situation. That said, different companies specialize in different types of drivers — and even rare or unique coverages are helpful for certain people.
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Compare.com's #1 goal is to save you money. We publish resources that are based on hard-hitting data and years of industry experience to help you make more informed decisions with your wallet.
Learn more about us, our team, and what makes us tick.
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Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors. Her work has appeared on The Huffington Post, Business Insider, Kiplinger’s, MSN Money, and The Washington Post, and she’s been writing for Compare.com since 2023. Her background in education allows her to help people relate to and understand complex financial topics.
She’s the author of several books, including The 5 Years Before You Retire, End Financial Stress Now, and the brand-new book, Stacked: Your Super Serious Guide to Modern Money Management, written with Joe Saul-Sehy.
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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