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Getting a great deal on car insurance doesn’t have to be complicated. In fact, if you follow just a few basic steps, you'll find a policy that meets your needs and your budget.

There are a lot of easy ways to save: shopping around, asking about discounts, bundling, or trying a usage-based insurance program. You can even combine several of these options for the most affordable car insurance and see savings of up to 30%.

Read on for the top ten tips that can lower your car insurance bill.

KEY TAKEAWAYS
  • Comparing auto insurance quotes from multiple companies every year at renewal ensures you’ve got the lowest rate.
  • Bundling your insurance policies with the same company means multi-car and multi-policy discounts.
  • Choosing a higher deductible will instantly lower your car insurance rates.
  • Some companies offer reductions if you get insurance through a group plan from your employer, business, or other associations.

How to get cheap car insurance

Getting cheap car insurance requires a little effort on your part, but it’s well worth it. The tips below may not all apply to you, but even combining a few of them can make a big difference.

1. Comparison shop

Cheap car insurance

What is the best way to get cheap auto insurance? Comparison shopping and gathering quotes from many different insurers just might be the top way to save.

However, while it's crucial to compare car insurance quotes from multiple companies, it is also important to look beyond price. A cheap rate doesn't mean much when the insurance company won't pay your claim.

Sometimes, you already have the best deal with your current car insurance company. But the only way to find out is to compare it with other companies.

Comparison shopping can help you find cheap car insurance companies in your area and even new auto insurance discounts.

You might also be surprised to find a lesser-known company has lower rates. 2022 data gathered by Insurance.com found that American National Insurance had the lowest average rates even when compared to well-known companies like Nationwide and USAA.

Check auto quotes each year when your policy comes up for renewal. Think of it like changing the batteries in your smoke alarm.

You should also comparison shop when you:

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

2. Bundle your policies

One of the best ways to find cheap car insurance companies is to look for insurers that will offer you a discount if you purchase more than one type of insurance. This is known as bundling your insurance policies.

For example, purchasing homeowners or renters insurance from the same company that provides your car insurance coverage can learn you a discount on both policies.

These multi-policy savings can climb up to 29% depending on the company.

Similarly, you can get up to 25% off by taking advantage of a multi-car discount when you insure two or more vehicles with the same company. This discount is typically on your liability, collision and comprehensive coverages.

But be wary, as you don’t always save money by bundling coverage. It is important to compare what it would cost to purchase your policies separately to the price break you get on a bundled deal before signing on the dotted line. It’s possible that you would do better to purchase a home policy separately from one of the cheap car insurance companies that offer coverage at particularly affordable rates.

National averages for bundled policy discounts are:

3. Raise your deductible

Simply increasing your deductible from $250 to $500 can lower the collision or comprehensive portion of your premium. You may save between 15% and 30%, according to Nationwide. Increase the deductible to $1,000, and you can save even more, potentially 40%.

Remember, though, that a higher deductible means more money out of your pocket in the event of a claim. Cheap car insurance can become expensive if you have to pay your deductible with a high-interest credit card. Make sure you understand how car insurance deductibles work before you choose one.

4. Take advantage of all the discounts for which you qualify

Talking to your agent can help you find overlooked ways to save on car insurance, says Robert Passmore, vice president of auto and claims policy at the American Property Casualty Insurance Association.

“Consumers should check in with their agent or insurance company to have a conversation and ask what discounts are available,” he says. “They will work with you to maximize all your benefits.”

While you might qualify for a lot more discounts, here are a few of the common ones that help you get affordable car insurance:

Good student. Many car insurance companies offer a good student discount, both for high school students and college students. A "good student" usually is someone who maintains a "B" (3.0) or better average to qualify for this discount and typically applies to students under 25.

How much can you save? The average base premium for the student-driving population is $6,110. Add in a good student discount, and that yearly policy rate dips to an average of $5,750. That’s a savings of $361, or about 7%. The good student discount is a significantly larger reduction than for most other discount categories. This can be a great way to find cheap car insurance for new drivers.

Homeschooled teen drivers may also be eligible. They must achieve a certain score on standardized tests. The discount normally applies to bodily injury liability, property damage liability, PIP, medical payments, collision and comprehensive coverages.

Students away from home. Likewise, for good students who are away at college, most insurance carriers offer discounts. A wide array of variables affect the discount rate, including:

  • Whether or not the student is taking a car to school and driving it regularly
  • Whose name(s) is on the title
  • Whether or not the student's permanent address is still the parent(s)' home

Loyalty. Have you stuck through thick and thin with your insurance provider? Your loyalty could equal savings. Several insurance companies offer this type of discount, which generally reduces rates by up to 10%.

Good driver. Good driver and safe driver discounts can get you between 5% and 25% in savings, depending on your carrier. Reducing how much you drive your vehicle can garner a discount. More on both of these later.

Vehicle security. Do you have an alarm or security/anti-theft device, such as a LoJack, installed in your vehicle? That could qualify you for a "safety-feature discount" of up to 30% in some cases.

Paid in full. If you can pay your annual bill in full, that can save you up to 10%, rather than the more common approach of paying in installments. Going paperless, too, can add a small discount.

Understand all the car insurance discounts for which you may qualify, so that you can take advantage of some reductions in your bill that can really add up.

5. Consider insurance when you're car shopping

Whether you're shopping for a fun car, one that accommodates all the kids, or a vehicle that gets great mileage, make sure to think about insurance. Cars that cost less to repair or replace generally have more affordable car insurance rates.

Don’t make the mistake of thinking that the "cheaper the car, the cheaper the insurance." It doesn't always work that way. Make sure you compare car insurance rates by vehicle when you’re shopping for a car.

6. Avoid tickets and accidents

There are steps you can take to avoid expensive tickets and accident claims. Pay attention to your speed, don’t try to run a red light, be more cautious, and drive defensively.

Poor driving history can disqualify you from getting the cheapest car insurance. Insurers will check your record to see if you present a high level of risk. Speeding tickets, accidents, citations for driving under the influence - all can push your insurance rates higher.

As we pointed out earlier, good-driver discounts can save you up to 25%. The insurance company usually requires that you have a clean driving record for at least three years. That means no DUIs, no moving violations, and no at-fault collisions.

Drive sensibly and cautiously and you'll be on the way to cheap car insurance by avoiding surcharges and receiving a good driver discount. For more on how a ticket affects rates, see our traffic ticket calculator.

7. Don't carry unnecessary insurance coverage

If you have an old beater, you can get cheaper car insurance by dropping comprehensive and collision coverage.

Don’t drop that coverage without giving it some thought, however. When should you make this move toward cheaper auto insurance? Many experts say it's time to drop these coverages when the actual cash value you'd receive for your vehicle doesn't justify the insurance expense.

Another type of coverage that could be unneeded is rental reimbursement coverage. You can skip that if you have an extra car in the household that you can use if yours is in the shop after an auto accident, or if you have easy access to public transportation.

Also, you may want to forgo personal injury protection or medical payment insurance (if your state doesn’t require it). Consider taking this step if your family already has an excellent health insurance plan.

8. Consider buying only the state-required minimum liability coverage

One way to get the cheapest car insurance rates available is to buy "bare-bones" coverage. This protection typically is liability insurance at the lowest legal limits required by your state to legally drive a car.

If you cause an accident, it pays for others' property damage and medical bills; that's it.

Liability limits are usually written like this: 30/60/25. In this example, the numbers show coverage that would pay:

  • Medical expenses of up to $30,000 per person
  • Medical expenses up to $60,000 per accident
  • Up to $25,000 for property damage

Here are average annual rates for the cheapest car insurance coverage in every state.

It’s usually not wise to go with state minimums, because you might be underinsured and unable to cover serious claims. That could leave you on the hook for paying thousands or even hundreds of thousands of dollars in damages out of your own pocket.

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.

9. Consider usage-based insurance or pay-per-mile insurance

Policyholders who drive less than a specified number of miles each year, usually 7,500 to 10,000 miles, can get a reduction in their base rates. The rate cut is applied to bodily injury liabilities, PIP, property damage liability, and collision premiums, depending on the policy.

To monitor mileage, car insurance companies often require that you install a small device in your vehicle that transmits data to the company. Keep it under a certain amount, and you score discounts. Usage-based programs may also monitor driving habits like braking and speed.

Actual pay-per-mile insurance allows you to pay based on the actual miles you drive, rather than just giving a discount for driving less, and doesn’t consider driving habits.

"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."

Passmore notes that many insurance companies will offer you a discount simply for signing up for this type of program, and that price breaks can grow even larger if the device shows that you engage in good driving behaviors.

“These programs are increasing in popularity as more people work remotely and drive less,” he says.

10. Ask about group insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, professional, business and alumni groups, and other associations or schools. Experts from the Insurance Information Institute suggest checking with your affiliated organizations to see what they offer.

Employers, of course, often offer health insurance group plans, but a lesser-known option is group car insurance. Larger companies are more apt to provide this option to their employees because the sheer volume of employees allows the company to secure a group rate.

Large colleges or trade schools sometimes offer the benefit of buying into group insurance not only to their students but also to alums.

There are many ways to get cheap car insurance. By doing your research and finding the right plan for you, you can find an auto insurance policy at the right price.

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