How to Lower Your Car Insurance Premium

Let’s face it—car insurance can be a serious hit to your wallet. Between rent, gas, groceries, and everything else life throws at us, spending hundreds (sometimes even thousands) a year on car insurance just feels like too much. The good news? You can lower your car insurance premium—and in many cases, by a lot more than you think.

Whether you're a first-time driver, a seasoned commuter, or just someone tired of overpaying, this post breaks down actionable steps to help you cut your car insurance costs without sacrificing coverage. Let’s dive into the smart ways you can start saving today.

1. Shop Around for Better Rates

This is the #1 tip for a reason. Many people stick with the same insurance company for years, assuming loyalty will lead to lower prices—but that’s not always the case.

How to do it:

• Use comparison tools like The Zebra, Policygenius, or Compare.com.
• Get quotes from at least 3–5 providers.
• Make sure you're comparing the same coverage levels across the board.

Why it works: Different companies assess risk differently. One may view your ZIP code or driving record more favorably than another, resulting in lower rates.

2. Raise Your Deductible

The deductible is the amount you pay out of pocket before insurance kicks in. Raising it from, say, $500 to $1,000 can lead to significant savings on your monthly premium.

Quick tip: Only do this if you have enough saved up to cover that higher deductible in case of an accident.

3. Bundle Your Policies

Got homeowners, renters, or life insurance? Bundle them with the same provider and ask for a multi-policy discount.

Real talk: Insurance companies love loyal customers, and bundling is their way of locking you in—while rewarding you with lower rates.

4. Ask About Discounts (Seriously)

Many people miss out on discounts simply because they never ask. Here are some common car insurance discounts you could be eligible for:

• Good driver discount
• Good student discount
• Low-mileage discount
• Military or veteran discount
• Defensive driving course discount
• Paid-in-full discount
• Automatic payment discount

Pro move: Call your provider and just ask, “What discounts am I not getting that I might qualify for?”

5. Maintain a Good Credit Score

Did you know that in most states, your credit score affects your car insurance rate? Insurance companies believe people with good credit are less likely to file claims.

How to boost your score:

• Pay bills on time
• Keep credit card balances low
• Check your credit report regularly for errors

A better credit score can mean hundreds of dollars in annual savings on your car insurance premium.

6. Drive Less, Save More

If you work from home, commute a short distance, or don’t drive much in general, you might be eligible for low-mileage discounts.

Try this: Some insurers offer telematics programs or usage-based insurance (UBI) that track your driving. If you’re a safe driver and don’t rack up many miles, you could save a lot.

Examples include:

• Allstate’s Drivewise
• Progressive’s Snapshot
• State Farm’s Drive Safe & Save

7. Drop Unnecessary Coverage

If your car is older, you might be paying for coverage you don’t really need. For example, collision and comprehensive insurance might not make sense on a vehicle worth less than $2,000.

Rule of thumb: If the annual premium for collision and comprehensive is more than 10% of your car’s value, it may not be worth keeping.

8. Avoid Making Small Claims

Making frequent claims, even for small amounts, can raise your rates in the long run. If you can afford to pay out of pocket for minor damage, it's often better not to involve your insurance company.

Why? Fewer claims = lower perceived risk = lower premium.

9. Drive Safely (It Really Does Pay Off)

This one’s obvious, but worth repeating. A clean driving record is one of the fastest ways to score cheap car insurance. Even one speeding ticket can cause your premium to jump.

Pro tip: Take a defensive driving course. Not only does it make you a safer driver, but it also qualifies you for additional discounts in many states.

10. Switch to Pay-Per-Mile Insurance

Companies like Metromile, Mile Auto, and Nationwide offer pay-per-mile insurance for people who don’t drive much. You pay a base rate + a small fee for every mile you drive.

If you're clocking under 10,000 miles a year, this could cut your premiums by half or more.

11. Review Your Policy Every Year

Life changes. Maybe you’ve moved to a safer neighborhood, got married, improved your credit score, or changed jobs and now drive less. Any of these changes can affect your insurance rate.

Set a reminder: Review your policy at renewal time and re-shop your rates at least once a year.

12. Use a Car with a Lower Insurance Rate

If you're in the market for a new (or used) car, be strategic. Some vehicles cost more to insure than others. Sports cars, luxury cars, and cars with poor safety records tend to have higher premiums.

Best cars for cheap insurance include:

• Honda CR-V
• Subaru Outback
• Toyota Corolla
• Ford Escape

Before you buy, get an insurance quote for the specific make and model. It could save you hundreds annually.

13. Install Anti-Theft Devices

Cars with GPS trackers, alarm systems, and immobilizers are less likely to be stolen—and insurance companies like that.

Installing these devices could get you a discount of up to 25% on your comprehensive coverage.

Final Thoughts: Be Smart, Stay Insured

Lowering your car insurance premium doesn’t mean cutting corners on protection. It just means being smart, proactive, and making sure you're not paying more than you need to. A few phone calls and a little research can lead to big savings.

So don’t wait for your next renewal take these steps today and put some of that hard-earned cash back into your pocket.

Found this helpful? Share it with a friend or bookmark it for your next policy renewal. Every dollar saved counts!