How to get cheap car insurance: Ways to save right now

How to get cheap car insurance

There are many ways to get cheaper car insurance, including shopping around, bundling your coverage, and increasing your deductible. Don’t reduce liability limits to save money; a low premium offers poor value if reduced limits or missing coverage leave you with a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. that’s not covered in full, but consider cutting coverage you don’t need.

The tips below may not all apply to you, but applying even one can reduce your bill. The best part is that there are things you can do to start saving on car insurance today.

1. Compare car insurance quotes regularly

Shopping around and comparing rates is the No. 1 way to save on your auto insurance. Request prices from at least three to five companies with the same limits, deductibles and optional coverage. Review the insurer’s claims service, complaint record and financial strength before switching.

Compare car insurance quotes from as many car insurance companies as possible to find the best policy at the lowest rate. Comparison shopping can help you find cheap car insurance companies and even new auto insurance discounts.

Don't forget to consider regional carriers and not just the big national ones; they often have lower rates.

You should comparison shop at least once a year, and also when you:

Purchase a new or different car
Combine cars on a multi-car insurance policy
Add or remove a driver from your coverage
Get married or divorced
Move to a different address
Add a teen driver
Purchase a home
Are convicted of a DUI or another major violation (review DUI insurance)
Get into a car accident
Have a change in your credit score

Remember, the more you comparison shop, the more likely it is that you will find cheap car insurance quotes.

2. Bundle your insurance for a multi-policy discount

Purchasing homeowners or renters insurance from the company that provides your car insurance coverage can earn you a discount on both policies.

National averages for multi-policy discounts are:

15% for auto and homeowners insurance
13% for auto and condo insurance
4% for auto and renters

NOTE: It's not always cheaper to bundle. Compare rates separately and bundled.

3. Increase your deductible for instant savings

Increasing your deductible from $500 to $1,000 lowers the collision or comprehensive portion of your premium and saves you an average of $323 a year. A higher deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. means you pay more out of pocket if you file a claim, so choose an amount you can afford.

Before raising your deductible:

Request prices at several deductible levels.
Compare the annual savings.
Confirm which coverages are impacted.
Ensure you have enough savings to pay the deductible.
Consider the vehicle’s value and repair costs.
Avoid a deductible that would strain your finances.

4. Ask about auto insurance discounts

Here are a few of the common car insurance discounts that help you get affordable car insurance:

Good student. Many car insurance companies offer high school and college students a good student discount. You'll usually need a B average (3.0 GPA) or better to qualify for this discount.
Student away from home. Likewise, most insurance carriers offer discounts for students who are away at college without a car.
Loyalty. Several insurance companies offer a discount for staying with them over the years, reducing rates by up to 10%.
Good driver. Good driver and safe driver discounts can save you between 5% and 25%, depending on your carrier.
Vehicle security. Do you have an alarm or security/anti-theft device installed in your vehicle, such as a LoJack? That could qualify you for a safety feature discount of up to 30%.
Paid in full. Paying your annual bill in full can save you up to 10%, rather than paying in installments.

“Consumers should check in with their agent or insurance company to have a conversation and ask what discounts are available,” says Robert Passmore, vice president of auto and claims policy at the American Property CasualtyLiability or loss resulting from an accident. Insurance Association. “They will work with you to maximize all your benefits.”

5. Compare insurance rates when you're car shopping

Insurance costs differ even for two vehicles with similar purchase prices. Repair costs, replacement value, theft history, safety performance and claim patterns affect premiums. Get quotes for each exact model and trim before buying, so a lower purchase price does not hide a higher insurance cost.

6. Keep a clean driving record

Tickets, at-fault accidents, and serious violations can significantly increase your premiums and may cause you to lose valuable safe driver discounts. Good driver discounts can reach up to 30%, though the exact savings and qualification rules vary by insurer and state. Maintaining a clean driving record helps reduce your risk of claims and protects the rating factors you can control over time.

7. Drop coverage you don't need

Dropping coverage will lower your premium, but it can also leave you at serious financial risk. A common rule of thumb is to compare your car’s value to the annual cost of collision and comprehensive coverage to see whether the protection still makes financial sense. Keep both if a lender or lease contract requires them.

Here are some coverages to consider dropping:

Comprehensive and collision coverage, if you have an older car. A good rule of thumb for dropping these coverages is to do so when the actual cash value of your vehicle doesn't justify the cost of insurance.
Rental reimbursement coverage, if you have an extra car in the household or if you have easy access to public transportation.
Personal injury protection or medical payments insurance (if your state doesn’t require it). Consider taking this step if your family already has an excellent health insurance plan.

8. Buy basic car insurance (very cautiously)

You'll get the cheapest car insurance rates when you buy bare-bones coverage, but this should always be a last resort. Consider other options first, as basic coverage will leave you underinsured and can cost you more in the long run. The minimum coverage in most states isn't enough to cover even a moderately serious accident, especially if it involves injuries.

But if you don’t drive much and are desperate to find a way to get cheaper car insurance, bare-bones coverage is better than nothing. Upgrade it as soon as you are financially able.

Usage-based insurance rewards safer driving, while pay-per-mile insurance helps people who drive very little. These programs track things like mileage, hard braking, acceleration, speed, time of day, and phone use. Ask what data the insurer collects, how it affects renewal pricing, and whether poor results can increase your rate.

Usage-based programs monitor driving habits like braking and speed and give you a discount based on how you drive.
Pay-per-mile insurance charges a base rate and then a per-mile rate.

"Driving fewer miles means you have less road time, resulting in a lower risk of getting into an accident," says Janet Ruiz, director of strategic communication at the Insurance Information Institute. "Most insurers ask for yearly mileage to give a lower rate to drivers who are on the road less."

10. Ask about group insurance or an affinity discount

Some insurers offer discounts through employers, professional associations, alumni groups or other approved organizations. Group discounts can reach 25%, but many customers receive less. Compare the discounted policy with standard market quotes because access to a group rate does not guarantee the lowest price.

Employers often offer health insurance group plans, but a lesser-known option is group car insurance.
Large colleges or trade schools sometimes offer their students and alumni the option to purchase group insurance.
Some insurance companies also offer members of certain groups an affinity discount.

Saving on car insurance: A case study

To illustrate some of the tips above, let's look at the example of a driver we'll call Stefan. Stefan is a registered nurse who is 28 years old and has good credit, but he recently got a speeding ticket, and his car insurance rate went up on renewal. To find a cheaper rate, Stefan followed these steps:

Stefan calls his car insurance company and asks what he can do to mitigate the increase after the speeding ticket. The representative reviews the list of available discounts with him and they discover he's missing out on a discount for being a member of the American Association of Registered Nurses. That discount will reduce his rate by 10%, but it's still higher than what he was paying.
Stefan requests quotes from three other car insurance companies. Two are more expensive than the rate from his current company, while one is $100 less every six months. However, he notes that if he switches, he will lose the discount on his renters insurance that he gets for bundling with his current company.
Stefan calls his current company back and asks about its usage-based car insurance program. He'll earn another 10% off his rate just for signing up, and a bigger discount if he shows good driving habits.
Stefan decides to stay with his current insurer to keep his bundling discount and earn a discount for his occupation. He signs up for the usage-based program, and with both discounts he reduces his rate by nearly 20% immediately. He'll save even more after demonstrating good driving habits.

FAQ: How to get cheap car insurance

How can you get cheap car insurance as a new driver?

You can lower costs as a new driver by comparing insurers, joining a household policy, choosing a cheaper-to-insure car, and using good-student, driver-training, or telematics discounts. Keep strong liability limits—very cheap coverage can lead to major financial risk after a serious crash.

How can I get cheap car insurance after an accident?

Compare quotes at renewal after the accident is on your record and any surcharge is applied, since insurers price at-fault claims differently. Ask about accident forgiveness and review all discounts. Don’t reduce liability limits to save money, and only raise your deductible if you can afford it after a claim.

How often should you compare car insurance quotes?

Compare quotes at least once a year and after major changes such as moving, adding a driver, buying a car, receiving a ticket or filing a claim. Also, shop when your renewal rate rises sharply. Use the same limits, deductibles and add-ons for every quote so you can identify a true price difference.

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How to get cheap car insurance: Money-saving tips you can use right now