5 Ways to Lower Your Car Insurance Costs

Your auto insurance deductible is the amount of money you pay before insurance pays for covered damages. The higher your deductible, the lower your insurance premium. However, having a higher deductible means you need to pay more out of pocket in the event of an accident.

Most car insurance policies only include deductibles on collision and comprehensive coverage. Collision coverage pays for any property damage from an accident; comprehensive coverage pays for damage from any event aside from a collision, like theft, weather, or vandalism.

You can choose different deductibles for collision and comprehensive, also known as a split deductible. If you live in an area prone to natural disasters, consider a lower comprehensive coverage deductible. Conversely, if you’re a safe driver with a clean record, a higher collision coverage deductible will keep your premium low.

When you purchase your policy, you’ll choose between $0 to $2,000 for your car insurance deductible. The average deductible for collision coverage is $500.¹ When choosing a deductible, select an amount you feel comfortable paying within 24 hours. Small, unexpected expenses can be challenging for many. According to the Federal Reserve, more than 35 percent of adults were one $400 financial setback away from being unable to pay their bills in full in 2025.²

Run the numbers on your auto insurance deductibles with your car insurance provider. If your savings account has a sizable cushion, consider a higher deductible to save money on your premium.

Many companies give car insurance discounts for bundling your auto insurance with another policy from the same provider, like homeowners insurance. This is also known as a multi-policy discount.

Major providers like Liberty Mutual, for example, allow you to bundle auto insurance with homeowners or condo insurance—the company states customers save an average of $950 annually.³ Meanwhile, State Farm mentions that drivers save up to $1,429 for combining car and home insurance policies.⁴ Additionally, Allstate’s multi-policy discount provides up to 25 percent off and extends to homeowners and renters insurance.

You may also find bigger bundling discounts from smaller or regional providers. Country Financial, which offers policies in 19 states, offers up to 30 percent off for bundling home and auto insurance. Mid-sized provider Amica also gives 30 percent off for home and auto policies.

You can often lower your car insurance premium by dropping coverage you don’t need. Most states require basic liability protections, including bodily injury and property damage, and may also require medical payments (MedPay) or personal injury protection (PIP), and uninsured/underinsured motorist coverage.

Collision and comprehensive coverage are optional if your car is paid off (your lender likely requires them if not), and usually worth it for newer cars. These coverages pay up to your car’s actual cash value, which accounts for depreciation. If you total an older vehicle, your payout may be low. In some cases, it may be less than what you’ve paid in premiums. A common rule of thumb: If your car is worth less than 10 times your annual premium, dropping these coverages may make sense.⁵

You can also reduce your premium by lowering your coverage limits. Coverage limits are the maximum amount your insurer will pay for a claim. While states set minimum liability requirements, you can choose higher or lower limits. Keep in mind that lower limits mean higher out-of-pocket costs after an accident. 100/300/100 limits are likely worth it.

Review your auto insurance policy carefully when renewing or shopping for a new provider; it may include coverage you don’t need. If you spot add-ons that you can do without — like rental reimbursement or roadside assistance — consider removing them to lower your premium.

One of the easiest ways to reduce car insurance costs is to take advantage of auto insurance discounts. Some of the most common include:

• Installing anti-theft devices
• Having safety features like airbags, daytime running lights, and antilock brakes
• Taking a defensive driving course
• Avoiding accidents and traffic violations
• Being a longtime customer (loyalty)
• Insuring more than one car

Certain auto insurance providers offer discounts based on affiliation, such as senior driver and military discounts. Driving habits shift, so it’s important to rethink coverage during life changes — like no longer having a commute after retirement. Here are some discounts based on customer profile:

• Military: Drivers in unique circumstances, like active duty military and veterans, should shop around for affordable and personalized coverage. For example, USAA serves only the military community and offers discounts geared toward service members, like for garaging your car while deployed or on a military installation.
• Young driver: Parents of teen drivers should be on the lookout for discounts like:
  • Defensive driving or driver training
  • Good student
  • Multi-car/family
  • Teen driver monitoring (GPS)
  • Young driver
  • College students may also be eligible for good student or student away from home discounts. College or university students who leave their insured cars at home while attending school more than 100 miles away could qualify for a lower rate.
• Group rates: You can get discounted insurance rates by insuring your car through your employer, a professional organization, or an alumni group. Group insurance reduces costs due to the higher negotiating power of a large group versus an individual.

Some auto insurance providers offer a garage discount if you park in a secure lot, which reduces the chances of car theft or vandalism. That makes sense, since U.S. car theft rates rose in recent years — in 2024, a motor vehicle was stolen every 37 seconds.⁶

Low-mileage drivers can save money with usage-based insurance and pay for coverage based on how much they drive. There are a couple of types of usage-based insurance discounts:

• Mileage: Pay-per-mile programs offer better prices if you drive fewer miles. Your insurer will check your odometer at each renewal period.
• Safe driving behaviors: Some usage-based programs offer discounts for safe driving. Typically, insurers install a device in your car or require you to use a mobile app that tracks how you drive. Certain behaviors, including how sharply you turn, how hard you brake, and how fast you accelerate, determine an adjusted discount at renewal time.

To find the lowest rate, compare quotes from at least three insurers before each renewal. Car insurance companies use different pricing models, so shopping around can help you find cheaper options. Be sure to use the same coverage for every quote so you can make an accurate comparison.

Additionally, you can speed up the shopping process by using a broker or comparison site. Online comparison sites let you review quotes from multiple insurers after entering your information once. You can also work with a brokerage agency, where an agent shops on your behalf to find affordable coverage. Keep in mind that some brokers charge fees, so ask about any costs before purchasing a policy.

Price isn’t everything. Check third-party ratings for customer and claims satisfaction as well. Some regional insurers, like Erie, are known for competitive rates and strong service. Depending on where you live, different providers will offer affordable rates and solid service — which is why it’s important to do your research.

Lowering your car insurance costs doesn’t have to mean sacrificing the protection you need. By raising your deductible, bundling policies, dropping unnecessary coverages, taking advantage of available discounts, and regularly comparing quotes, you can meaningfully reduce your premiums without leaving yourself exposed. The key is to review your policy regularly — especially after major life changes — and stay proactive about finding savings. A little research goes a long way toward keeping both you and your wallet protected on the road.