How to Lower Your Car Insurance: 12 Ways That Actually Work
Practical, legitimate ways to cut your car insurance bill: comparing quotes the right way, deductibles, discounts, credit, coverage choices and more, with tips from insurance regulators.
The national average for full coverage is about $2,912 a year, according to Experian's September 2026 data. If you are paying that much or more, there is usually money to save without giving up the protection that matters. These are the methods that work, starting with the ones that save the most.
1. Compare quotes the right way
Insurers price the same driver very differently, so shopping is often the single biggest saving. The NAIC's buying tips include an important warning: the lowest quote isn't always the best one, because quotes may not cover the same things. To compare fairly:
- ask every insurer for the same coverages, limits and deductibles,
- ask for quotes by email so you have a written record, and
- check with your state insurance department that the company and agent are licensed, and look at complaint records.
2. Raise your deductible
The NAIC notes that, generally, the higher the deductible, the lower the premium. Moving from $250 or $500 to $1,000 can lower the cost of collision and comprehensive, as long as you could pay the higher amount after a claim. Use the break-even test in our deductible guide.
3. Drop collision or comprehensive on an older car
If your car is paid off and its value is low, you may be paying a lot to protect very little. The NAIC suggests comparing your car's value and repair or replacement cost against the savings before dropping either coverage. See full coverage vs. liability.
4. Claim every discount you qualify for
Start with your declarations page: the NAIC recommends reviewing the discounts already listed there. Then ask about the ones you don't have. Common discounts include:
- bundling auto with home or renters insurance,
- multiple cars on one policy,
- good driver or claim-free history,
- good student and driver training for young drivers,
- safety and anti-theft equipment,
- paperless billing, automatic payments and paying in full.
5. Don't pay twice for the same extras
The NAIC points out that memberships such as auto clubs may already include towing or rental car coverage. If yours does, remove the duplicate coverage from your policy.
6. Check your credit report
In most states, insurers are allowed to use credit-based insurance scores as one pricing factor. These scores are built from your credit report but predict insurance claims, not missed payments. Checking your reports for errors before you shop can help. The rules differ by state:
| State | How credit can be used in auto insurance |
|---|---|
| California | Insurers don't use credit for auto underwriting or rating |
| Hawaii | Credit can't be used to set underwriting standards or rating plans |
| Massachusetts | Credit can't be used to set rates, underwrite or renew |
| Michigan | Credit can't be used to set rates or to deny, cancel or refuse renewal |
| Maryland, Oregon, Utah | Use is allowed but restricted |
Source: Experian, March 2025. Rules can change; check your state insurance department.
If your credit has improved since you bought your policy, ask your insurer to re-rate you. Read more in our guide to car insurance with bad credit.
7. Tell your insurer where the car is parked
The NAIC notes that parking in a garage or off the street may lower your premium. Make sure your insurer has the right address and parking details.
8. Update your mileage and how you use the car
If you now work from home or drive much less, tell your insurer. Lower annual mileage can mean a lower rate. Low-mileage drivers can also look at usage-based or pay-per-mile programs.
9. Think about insurance before you buy a car
Repair costs, theft rates and safety ratings all affect the price of collision and comprehensive. Ask for quotes on the specific models you are considering before you buy.
10. Pay in full and avoid installment fees
Many insurers charge less for paying the whole term upfront, and paying in full means you can't be canceled for a missed monthly payment.
11. Let your record improve, then shop again
Tickets, accidents and DUIs affect your price for several years, but their effect fades. Put a reminder in your calendar for when each violation is scheduled to drop off your record, and shop again then. If you have a violation now, see how much a speeding ticket or a DUI can raise your rates.
12. Know what not to do
- Leaving a household driver off the policy. The NAIC warns this can lead to cancellation, nonrenewal or added premiums after an accident.
- Letting coverage lapse between policies. A gap can raise future prices and, in some states, bring fines and an SR-22 requirement. See car insurance after a lapse.
- Cutting liability limits to the bare minimum. It lowers the bill but exposes your savings to a lawsuit.
- Hiding ride-share or delivery driving. The NAIC says to disclose commercial use to your insurer.
Frequently asked questions
How often should I shop for car insurance?
A good habit is to compare quotes at every renewal where your price rises, and whenever something changes: you move, buy a car, add a driver, or a ticket or accident falls off your record.
Does paying in full lower car insurance?
Many insurers offer a lower total price for paying the full term upfront, and it removes the risk of a missed monthly payment that could cancel your policy. Ask your insurer how much you would save.
Will a telematics or usage-based program lower my rate?
It can if you drive safely and not too much. These programs track driving behavior such as mileage, braking and time of day. Ask how the program works and whether your rate can go up as well as down before you enroll.
Is it cheaper to choose the state minimum coverage?
It lowers your premium, but it leaves you exposed to costs above your limits. It is usually smarter to save money through deductibles, discounts and shopping than by cutting liability limits.
Sources
- Does your vehicle have the right protection? Best practices for buying auto insurance, NAIC
- What Does Auto Insurance Cover? (June 11, 2026), NAIC
- Which States Restrict the Use of Credit Scores in Determining Insurance Rates? (March 18, 2025), Experian
- Average Cost of Car Insurance (data as of September 2026), Experian
Sources were checked on October 14, 2026. Laws, fees and prices change; always confirm with your state agency or insurer.