If you're like most families, car insurance is one of your biggest expenses — especially if you have a teenager on your policy. But there are several ways you can lower your car insurance costs.
In this article, top insurance experts provide tips, facts and statistics on how to get family car insurance that fits just about any budget.
Factors that can affect the cost of family car insurance
Buying a new home, changing your living arrangements, marrying, divorcing, adding a teen or new driver to your policy can affect the cost of your family's car insurance.
Espenschied says your credit score is one of the biggest factors that determine your family car insurance cost. The lower your score, the more you’ll pay.
- The year, make and model of vehicles
- Tickets or accidents
- What state you reside
- Age of drivers
- Gender
- A student’s achievement
- Whether a family has multiple policies with the same company
TIP"There are so many variables when it comes to car insurance, especially with multiple drivers in the household," said John Espenschied, owner of the Insurance Brokers Group, with more than 22 years of personal and commercial insurance industry experience. "I would estimate the average family is paying $300 to $500 for car insurance per month, assuming this includes young drivers and multiple vehicles.
Now, let's explore some ways to get savings so you can find the cheapest car insurance for your family.
How much is car insurance for families?
The price of car insurance varies widely from company to company. The average cost of a car insurance policy in 2021 was $1,839. But rates can swing wildly depending on many factors.
Each year, Insurance.com’s runs the numbers for car insurance rates as compared by each state between roughly 3,000 different vehicle models, resulting in a list of the cheapest to insure and the most expensive to insure.
Insurance.com pulls insurance quotes from six of the major insurance companies and averages them. For 2021, the Chrysler Voyager was the victor as the cheapest new vehicle to insure, stealing that top spot from the Honda CR-V LX, which came in second. The Voyager costs $1,272 to insure on average. That's $156 less than the national average.
The Mazda CX-3 Sport came in third in the Top 20 that is solidly dominated by SUVs and crossovers.
What are the most expensive cars to insure as a family?
Not surprisingly, the most expensive cars are usually the most costly to insure. These cars are often high-powered and sporty. They aren't always the safest, and also cost more to repair.
Car insurance companies may consider these vehicles a risk, so you're going to pay for it. That said, the Maserati Quattroporte is probably not the best option for the happy, money-conscious family, and certainly shouldn't be the one that your teen is assigned to should you have one (the teen or the car).
Your teenagers are expensive. They eat a lot, most of them are on a traveling sports or dance team, and they always want the coolest sneakers. They'll affect your insurance rate in a big way, too. Good luck finding the cheapest car insurance if you have a teen on your policy.
Teens drivers can increase the cost of a family’s auto plan anywhere from 50% and 100%, according to the Insurance Information Institute. And it’s been estimated that teens who get their own car insurance policy can expect it to cost more than $6,000, depending on the state.
“It's generally less expensive for parents to add teenagers to their auto insurance policy than it is for teens to purchase one on their own,” says Loretta Worters, vice president of media relations at the Insurance Information Institute. “Rates can increase anywhere from 45% to 60%. By insuring your teenager’s car with your insurer, you may qualify for a multi-vehicle discount, which can offset that amount slightly. That said, insurance companies differ in how they price policies for young drivers, so do some research into prices to be sure to find the best fit for you and your teen.”
If a young driver is currently on the policy, adding another vehicle won't have the same massive jump in premium more than adding a third vehicle with two adult drivers, Espenschied says. "The most significant impact is going to be merely adding a young driver, even if there are two adult drivers and one or two vehicles. It'll be an estimated cost of $3,442 annually for a 16-year-old driver, being added to an existing car insurance policy."
Espenschied understands the pain of adding a teenager to your car insurance policy. He has a 21-year-old son and an 18-year-old daughter.
When Espenschied's son got his driver's license, the family added a 16-year-old Honda with liability coverage to the family fleet. That added only $150 per month to the coverage. If Espenschied had purchased a new car for his teen son that required collision and comprehensive coverage, he says that cost would have easily doubled. “If you go out and buy your teen a new BMW, you may pay $3,000 to $4,000 extra per year in insurance premiums. That’s quite the sticker shock,” he says.
Espenschied also notes that you’ll always pay more for teenage boys than you will for teenage girls. “Statistically women are known to be safer drivers than men, so premiums are always a little less when you add a teenage girl to your policy,” he says.
This is exactly what happened when Espenschied’s daughter turned 16. She got a 2016 Nissan Versa with full coverage. They were initially paying $150 per month when she turned 16 (the same price they paid for just liability coverage on their son). And now that she’s 18, that rate has already come down to $118 per month (a savings of almost $400 a year). And as she gets older, Espenschied says it’ll continue to go down.
How to get the cheapest car insurance for families
Discounts are one of the easiest ways to reduce your family car insurance cost. And the good news is several car insurance offer discounts that should interest families. It's important that you ask your agent or insurance company about these.
So, what family car insurance discounts are there?
Multi-car discount
Families with a multi-car insurance plan typically save anywhere from 10% to 25% on their premiums compared to separate policies. You can also stack a home and auto insurance bundle discount on top of a multi-car discount, saving around 15% more on average.
Good student discount
If you've got a student in your family with good grades, you'll likely get a decent discount on your insurance. Most car insurance companies offer a good student discount, both for high school students and college students. A "good student" generally translates into maintaining a "B" (3.0) or better average to qualify for this discount, and typically applies to students under 25.
Homeschooled teen drivers may also be eligible but must achieve a certain score on standardized tests. The discount normally applies to bodily injury liability, property damage liability, personal injury protection, medical payments, collision, and comprehensive coverages.
Your good student away at college is still a member of the family, too, of course, even in the eyes of your car insurance company. Most insurance companies offer a discount for college students still on their parents' policy. Many 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, and whether or not the student's permanent address is still the parent(s)' home.
Loyalty discounts
Even sticking with your company can help you save money. Nationwide, Farmers, Geico, USAA, and Allstate are among those who have handed out loyalty discounts. It'll usually get you about a 10% discount.
Good driver and safe driver discounts
Good driver and safe driver discounts can get you between 5% and 25% in savings, depending on your carrier. Speeding tickets, accidents, drunk driving citations -- all can drive your insurance rates higher. Insurers will check your record to see if you present a risk.
To get the cheapest rates, an 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.
“The best way to keep prices down is to make sure your teen maintains a clean driving record,” Worters says. “From the outset, it's important to talk to your kid about the relationship between driving a car and the associated responsibilities, including insurance costs. Explain and reinforce driving safety tips and the serious consequences of driving infractions or accidents, including increasing the cost of insurance.”
Speaking of "safe," if you've got a security system or anti-theft device installed on your vehicles, that could bring your family car insurance plan down up to 30% in some cases.
(See "How much will a ticket affect my insurance rates?")
Paid-in-full discount
Grab another small discount by paying the annual car insurance bill in full, if you can. That can get you about a 10% savings, in some cases.
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 add up.
Ways to get the cheapest family car insurance
Family car insurance rates fluctuate based on numerous factors — your credit score, the state you live in, your driving history, your age, your vehicle. Because of this, there isn’t one specific company that has the best car insurance for families.
However, here are six ways to get the cheapest family car insurance:
Get as many discounts as you can
As explained above, there are many discounts available. "Ask for any and all discounts like a good student, multiple car discount, multiple policy discount, drivers education, advance quote discount, and tracking programs that you plug-in your car or download on an app," Espenschied says.
Shop around for rates
You can dig up some cheap, or cheaper, car insurance rates by taking the time to comparison shop and ask about established insurance companies' discounts. Or you can also uncover a new company that has crept up or a company that has dropped its rates.
You may also want to look into a low-income car insurance program for families if you’re struggling to pay premiums now.
Experts suggest checking auto quotes each year when your policy comes up for renewal.
However, you definitely should also take a look at the rates if any of these circumstances arise:
- Purchasing a new or different car
- Combining cars on a multi-car insurance policy
- Adding or removing a driver
- Marriage
- Divorce
- Moving
- Adding a teen driver
- Home purchase
- DUI or major violation (more on DUI insurance)
- Accident
- Change in credit score
For more information, see "16 reasons your car insurance rates drop."
Take your age into consideration
Espenschied added that several auto insurance companies focus on the 50+ community, such as The Hartford and its AARP partnership. Alternatively, some insurers are better for younger drivers, such as Progressive, which is very competitive in that demographic, especially if you package it with the home policy.
Choose a vehicle that’s cheap to insure
Remember that getting that sweet ride you've always coveted likely won't be the best family choice. It definitely won't get you the cheapest insurance.
Keep in mind that the vehicles you choose factor heavily in the amount you'll pay for your premium. Just because a car is cheap doesn't mean that it'll be cheap to insure. On the flip side, an expensive luxury car often requires that you've got the luxury of dishing out a lot in insurance, and repairs should they arise.
"Teenage drivers are four times more likely to be involved in an accident within the first three years of driving," Espenschied says. "We advise parents to buy a used, beater car you know will get used and abused, regardless of how good a student they are. Accidents will happen in a 4,000-pound vehicle, and it takes time to learn how to handle driving by yourself."
Bundle policies when you can
Homeowners and married folks tend to file fewer claims, and that translates into lower rates on car insurance for those two groups. That's an advantage for families in getting a cheaper rate. Putting your homeowners' or renters' insurance with the same company as your car insurance (often called “bundling”) almost always gets you a better price. In some cases, you can save more than 25% on your liability, collision, and comprehensive coverages.
National averages show that getting multi-policy with auto and homeowners insurance at a savings of 17% (or about $730 annually). The savings is a bit lower with a condo, life, and renters’ policy.
Moreover, of course, having multiple vehicles on the same policy will get you cheaper insurance than separate policies on each.
Increase your deductible
Another way to save is to increase your dollar deductible from $250 to $500. That can lower the collision or comprehensive portion of your premium, saving between 15% and 30% with some companies, according to the Insurance Information Institute.
A higher deductible will mean more money out of your pocket if you need to make a claim, and that savings on the front end can become expensive should you cause an accident. (See "How much can I save by raising deductibles?")
With some savvy shopping, excellent driving skills, and good grades, your family can find the cheapest car insurance for your family.
FAQ's about cheapest car insurance for families
How do family auto insurance plans work?
Family car insurance, also known as multi-car insurance, is where you bundle anywhere from two to five vehicles together into one package. Usually, the only rule is that all the vehicles must reside at the same address.
Generally, family car insurance costs less than what you’d pay if you bought separate plans for each vehicle. You also get the added benefit of having one deductible and renewal date, which can save you even more money. So, if you’re looking for the best car insurance for families, a multi-car insurance plan is a good place to start.
What happens to my family insurance rate if I get into an accident?
Contrary to popular belief, Espenschied says insurance companies don’t raise rates when you get into an accident; they take away discounts. And that’s why you pay more overall.
“If you have incidents (tickets or accidents) on your driving record, opt for a six-month policy instead of an annual policy,” says Espenschied. Then, your rate can adjust down every six months as long as you keep a clean driving record. If you do a 12-month policy, it will be at least a year before you see any rate decrease.”
On the flip side, Espenschied says you should go for a 12-month policy if you have a clean driving record because it locks you into that rate.
Do car insurance rates go down when you have a baby?
Sometimes. Car insurance companies typically see parents as safer drivers. And because safer drivers carry less risk and will likely get into fewer accidents, your car insurance company could lower your insurance premium as a result.
Does car insurance get cheaper after you buy a home?
Generally, yes. Your car insurance can get cheaper after buying a home. Car insurance companies see homeowners as more stable than renters and will often discount your rate even if you don’t have home insurance with them. This rate is small and usually averages out to about 1.5%.
What are the different types of auto insurance coverages for families?
There are five major types of auto insurance for families:
- Liability insurance protects you if you’re legally at fault for an accident
- Comprehensive and collision insurance covers repairs for your vehicle after an accident or non-collision incident
- Gap insurance pays off your lease or loan if your car is totaled and you owe more than it’s worth
- Uninsured/underinsured motorist insurance pays your medical expenses if you get into an accident with someone who’s uninsured
- Personal injury protection and medical payments insurance help you cover the cost of treatments after an accident.
In addition to these five main types, you can also take advantage of add-ons like rental reimbursement insurance, emergency roadside assistance, and mechanical breakdown insurance, depending on your needs.
