How to lower your auto insurance premium: 10 ways to save

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Car insurance rates have been climbing steadily, and many drivers are opening renewal notices to find their premiums have jumped — even without a single claim or violation. The reasons range from rising repair costs and higher crash rates to increased vehicle theft and more frequent severe weather. But a higher bill doesn’t mean you’re stuck. 

Here’s how to bring your premium down.

 1. Shop around for a better rate

Shopping for car insurance hit record highs in 2024 and has stayed elevated into 2025 — and for good reason. More than 45% of policies in force were shopped at least once by the end of 2024, the highest rate ever recorded, according to LexisNexis. CarPro Drivers are responding to years of steep premium increases, and the savings are real: shopping around for the most affordable policy could save Americans thousands of dollars.

The best time to compare quotes is at renewal, when you can switch without penalty. Use an online comparison tool to pull quotes from multiple carriers at once — prices can vary dramatically for identical coverage with the same driver profile.

2. Bundle your policies

Bundling — buying your car insurance and home, condo, or renters insurance from the same company — is one of the most straightforward ways to reduce what you pay across both policies. Bundling home and auto insurance saves an average of 15%, or more than $700, though the discount varies significantly by insurance company.

Beyond the headline discount, bundling can also unlock practical benefits. If your home and car are damaged in the same event — a storm, for example — some insurers will charge only a single deductible rather than one for each policy. You also deal with a single company for renewals, billing, and any claims, which reduces the administrative load considerably.

3. Raise your deductible

Your deductible is the amount you pay out of pocket when you file a collision or comprehensive claim before your insurer covers the rest. Choosing a higher deductible directly lowers your premium — because you’re taking on more of the financial risk yourself, the insurer’s exposure shrinks and so does your bill.

Raising your deductible from $250 to $1,000 or higher can reduce your premium by more than 18% on average. 

Here’s how much you can save by raising your deductible — and what it’ll cost you.

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4. Stack your discounts

Most drivers qualify for more discounts than they’re actually receiving — because insurers rarely apply them automatically. Good driver discounts alone can save between 5% and 25% depending on your insurer, a good student discount saves around 12% on average, and simply paying your annual premium in full can cut your rate by up to 9%. Loyalty discounts for staying with your insurer reward you with up to 11% off. Discounts stack, and the savings add up faster than most people expect.

The most valuable discounts to ask about:

5. Get car insurance quotes before buying a new vehicle

The car you drive has a direct and often underestimated impact on your premium. Two vehicles with similar sticker prices can carry very different insurance costs depending on their safety ratings, repair costs, theft risk, and how powerful the engine is. Getting an insurance quote before you buy — not after — can save you from an unpleasant surprise at renewal.

Based on our data, the Subaru Crosstrek is the most affordable new vehicle to insure, averaging $2,299 a year — or $192 a month. The cheapest ten models sit within a narrow $82 annual range of each other, all coming in under $200 a month.

The cheapest vehicles to insure tend to share a few things: strong safety ratings, widely available parts, and modest repair costs. The Honda CR-V, for example, is an IIHS Top Safety Pick and comes with standard features like automatic emergency braking, lane-departure warning, and blind-spot detection — all of which reduce insurer risk and, by extension, your premium.

6. Prioritize safe driving habits

Your driving record is one of the biggest levers you have on your premium — and violations don’t just come from accidents.

“You don’t have to get into an accident to see your car insurance rates increase. Speeding tickets and other traffic offenses can also make those costs jump,” says David Cooley, an insurance agent with Country Financial. 

A clean record qualifies you for good driver discounts of 5% to 25%, depending on the insurer. Most require at least three years without violations or claims. Avoiding a single speeding ticket can be worth hundreds of dollars in avoided premium increases over three to five years.

7. Consider a telematics or usage-based insurance program

Telematics programs use an app or plug-in device to track how you actually drive — your speed, braking, cornering, and time of day. If the data shows you’re a safe driver, your insurer rewards you with a lower rate.

Based on our data, telematics programs save around 10% on average. For young drivers or anyone who’s been priced on group statistics rather than individual behavior, opting in can produce savings that standard discounts alone won’t match.

8. Adjust your coverage levels

Not every coverage on your policy is earning its keep. As your car ages and your life circumstances change, the coverage that made sense when you first bought the policy may no longer make financial sense today — but most drivers never revisit it.

• Collision and comprehensive on older vehicles: If your car’s actual cash value is less than your annual premium and deductible combined, these coverages may cost more than they’d ever pay out. Dropping collision and comprehensive when the premium on your vehicle exceeds 10% of the car’s remaining value can save you hundreds or even thousands.
• Rental reimbursement: If you have access to another vehicle or could use public transit while your car is being repaired, this add-on may not be worth the cost.
• Roadside assistance: If you’re already covered through a AAA membership or a credit card benefit, you’re paying twice. Check your card benefits before your next renewal — many travel and rewards cards include roadside coverage as a standard perk.
• Gap insurance on a paid-off vehicle: Gap insurance covers the difference between what you owe on a car loan and the car’s market value. Once the loan is paid off, there’s no gap to cover — but some drivers keep paying for it without realizing it.

9. Consider pay-per-mile insurance

Drivers who don’t put many miles on their car each year often overpay for a standard policy. Pay-per-mile insurance charges a flat monthly base rate plus a small per-mile fee — so the less you drive, the less you pay.

These policies typically suit drivers who travel under 10,000 miles a year. A small tracking device monitors your odometer and reports mileage to the insurer. The coverage itself is identical to a standard policy; only the pricing model is different.

10. Look for group or affinity discounts

Some insurers offer reduced rates through employer group plans, alumni associations, professional memberships, or organizations like AAA and AARP. These affinity discounts are often unadvertised — you may need to ask your insurer directly or check their discount page.

Group plans through employers or universities can sometimes produce savings comparable to bundling, particularly for younger drivers who don’t yet qualify for loyalty or multi-policy discounts.

How much can you actually save? Putting it all together

The strategies above aren’t mutually exclusive — many can be stacked. A driver who raises their deductible from $250 to $1,000 (saving 18%+), qualifies for a good driver discount (up to 25%), enrolls in a telematics program (10%), bundles their policies (9%), and pays in full (9%) could realistically reduce their premium by 40% or more compared to a default policy with no optimizations.

The table below is drawn entirely from our rate analysis and shows average savings by strategy:

What to avoid when cutting costs

Not every cost-cutting move is a good one. A few common mistakes that can backfire:

• Dropping liability coverage to the state minimum. Minimum coverage only covers damage you cause to others — not your own vehicle or medical bills. If you cause a serious accident, you could be personally liable for costs that far exceed your policy limits.
• Canceling coverage between vehicles. A lapse in coverage — even a brief one — signals risk to insurers and can raise your rate when you reinsure.
• Choosing a deductible you can’t cover. A $2,500 deductible saves money on paper, but only if you can actually pay it when you file a claim.
• Assuming bundling is always cheaper. Always compare the bundled price against separate policies before committing.

Start saving: small changes, real results

Car insurance is one of the few recurring bills where being proactive consistently pays off. You don’t need to overhaul your policy all at once — even picking two or three of the strategies above can add up to hundreds of dollars in annual savings. Start by comparing quotes at your next renewal, ask your insurer what discounts you’re currently missing, and consider whether your deductible and coverage levels still make sense for where you are today. 

What our expert says

Q: Should you change coverage levels to lower your car insurance rate?

David CooleyInsurance agent, Country Financial.

“While you may explore trimming coverages or making changes to your deductible, talk with your insurance agent and make sure you completely understand the impact of those cost-saving changes. They could have long-term consequences if you get into an accident or need to file another claim.”

Alisha Ambre

 

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Alisha Ambre holds a Bachelor of Arts with honours in English Literature and Media Studies. She focuses on crafting clear, engaging content that makes complex information feel practical and approachable for everyday readers. When she’s not writing, she’s likely on the volleyball court or immersed in a good video game.