Cheap car insurance is not about buying the thinnest policy you can find. It is about paying a fair price for the protection you actually need. Most drivers can cut their premium noticeably without dropping important coverage, simply by changing a few settings on their policy and shopping at the right time.
Below are ten practical moves that work for most drivers in the United States, plus the mistakes that make “cheap” insurance expensive later.
Shopping around at every renewal is the single most reliable way to save.
Raising your deductible and dropping collision on an older car can lower your bill, but only if you could afford the out-of-pocket cost.
Never go below your state’s legal minimum, and think twice before choosing only the minimum.
1. Compare at least three quotes every renewal
Insurers price the same driver very differently, because each company weighs risk factors in its own way. A company that was cheapest for you three years ago may not be cheapest today. Get quotes from at least three insurers, including one large national company and one regional insurer. Our guide to comparing auto insurance online shows how to make sure the quotes you compare are truly like-for-like.
2. Raise your deductible (carefully)
Your deductible is what you pay before collision or comprehensive coverage kicks in. Moving from a $500 to a $1,000 deductible usually lowers the premium. The catch: you must be able to pay that $1,000 on short notice after an accident. If you could not, the saving is not worth it.
3. Reconsider collision and comprehensive on an older car
Collision and comprehensive pay up to your car’s actual cash value, minus the deductible. If your car is worth only a few thousand dollars, the yearly cost of these coverages can approach what you would ever collect. A common rule of thumb is to review them when the yearly premium for both is more than about 10% of the car’s value. If you have a loan or lease, your lender will usually require them.
4. Bundle home or renters insurance with auto
Most large insurers give a multi-policy discount when you buy auto together with homeowners, renters or condo insurance. Always price the bundle against separate policies, though; occasionally two different companies are still cheaper.
5. Ask for every discount you qualify for
Discounts are rarely applied automatically. Common ones include safe driver, good student, defensive driving course, low mileage, anti-theft devices, paperless billing and paying in full. See our full list of car insurance discounts to know what to ask for.
6. Try a usage-based (telematics) program
Many insurers offer an app or plug-in device that tracks braking, speed, phone use and time of day. Careful drivers who do not drive late at night often earn a discount. If you drive aggressively or a lot at night, it may not help, so read the program rules first.
7. Keep your driving record clean
Tickets and at-fault accidents typically raise rates for three to five years. In some states a defensive driving course can remove points or earn a discount, which helps you recover faster.
8. Improve your credit-based insurance score
In most states insurers use a credit-based insurance score when setting prices. A few states, including California, Hawaii and Massachusetts, ban or heavily limit this. Where it is allowed, paying bills on time and keeping card balances low can lower your premium over time.
9. Choose your next car with insurance in mind
Insurance costs vary widely between models because of repair costs, theft rates and safety ratings. Before you buy, get a quote for the specific model you are considering.
10. Pay in full if you can
Many insurers add installment fees to monthly plans. Paying the six- or twelve-month premium upfront often removes those fees. If monthly payments suit you better, read our guide to low monthly car insurance.
Mistakes that make cheap insurance expensive
Buying only the state minimum liability. Minimum limits can be far lower than the cost of a serious accident. If damages exceed your limits, you can be personally responsible for the rest.
Letting coverage lapse. Even a short gap can raise future quotes.
Giving inaccurate information. A cheap quote based on wrong mileage or a missing driver can be corrected later, or a claim may be disputed.
Start about three to four weeks before your policy renews. Some insurers also offer an “early shopper” discount for buying in advance.
Is the cheapest policy always a bad idea?
Not necessarily. A low price is fine as long as the limits and deductibles fit your situation and the company has a solid claims record.
Will getting quotes hurt my credit?
Insurance quotes generally use a “soft” credit check, which does not affect your credit score.
This article is general information, not insurance advice. Coverage rules and prices vary by state and insurer, so confirm details with a licensed agent or the insurer before you buy.
