10 Ways To Save Money on Car Insurance

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If it’s time to renew your auto insurance policy and you’re facing a case of sticker shock, you’re not alone. Insurance companies have struggled to keep up with the increased costs to repair or replace vehicles since the pandemic.

As money expert Clark Howard explains, “The math is not working for them. So that’s why people are getting these very large increases in costs at renewal time for auto insurance.” J.D. Power reports that insurers are facing the worst losses they’ve seen in over 20 years, which has led to at least one-third of insurance premiums increasing across the nation over the last year.

So, how can you get a lower rate on car insurance? This article will cover ten ways to save, including:

  1. Ask About Discounts
  2. Avoid Unnecessary Claims
  3. Consider a Pay-Per-Mile Policy
  4. Drive Safely and Drive Less
  5. Drive With an Insurance Tracker
  6. Drop Uneconomical Coverages
  7. Improve Your Credit Score
  8. Increase Your Deductible
  9. Maintain Continuous Coverage
  10. Shop Around for Coverage

This article was updated in December 2023 and I review it annually. 

1. Ask About Discounts

Insurance companies typically offer a variety of discounts. You probably know about some of the most common ones — like discounts for paying your policy in full, setting automatic payments, and going paperless. But that’s the beginning of the list. Other discounts I’ve seen include:

  • Accident and/or ticket free: savings for being accident free and/or ticket free for a set period of time
  • Anti-theft devices/safety features: savings for having anti-theft and/or security features — such as an alarm system or anti-lock brakes — on your vehicle(s)
  • Bundling/multiple policies: savings for having multiple lines of insurance — such as homeowners, car, life, etc. — with the same company
  • Defensive driving course completion: savings for completing a course on defensive driving
  • Loyalty/long-time customer: savings for being continuously insured with the same company for a set period of time
  • Low mileage: savings for low usage of vehicle(s)
  • Military drivers: savings for current or former military members
  • Multiple vehicles: savings for having multiple cars insured
  • Professionals and/or alumni: savings for being part of a professional organization or company, serving in a specific profession, or being an alumni of a participating university
  • Seniors/mature drivers: savings for drivers of a certain age group
  • Student drivers with good grades: savings for student drivers who maintain good grades (typically a B average or higher) in school

Call your insurance company to ask what discounts are available that you might not be getting yet. Or, if you’re shopping for new insurance, be sure to ask about discounts when you get quotes. That way you’ll have the most accurate quotes to compare.

2. Avoid Unnecessary Claims

Filing an insurance claim will most likely cause your insurance to go up. The amount will depend on the type and severity of each individual claim. A claim for an at-fault accident with property damages and bodily injury will lead to a much higher increase than a claim for a cracked windshield. But any claim you file makes you riskier to your insurer, and the greater the risk to protect you, the more you pay for protection.

So, always remember money expert Clark Howard’s rule for insurance.

“We all need to think of auto insurance as going back to its original purpose: For catastrophic circumstances only!”

Before you file a claim, check out Clark’s advice on how to determine if it’s worth it to file a car insurance claim.

3. Consider a Pay-Per-Mile Policy

Pay-per-mile insurance is pretty much what it sounds like: your premium is determined by how many miles you drive. So you can get a full-coverage insurance policy, but the less you drive, the less you pay. If you drive less than 10,000 miles annually, this policy might be right for you.


How does it work? You can plug a device into your car that records your daily mileage. Or simply download an app to your phone that will track your driving. Then, your premium is adjusted monthly based on your mileage.

It’s worth noting that this is not the same as driving with an insurance safety monitor, which I cover below. For pay-per-mile insurance, how you drive is not being assessed — just how much you drive.

4. Drive Safely and Drive Less

There’s no shortage of things to distract us these days. And when we’re on the road, distractions are incredibly dangerous. While more and more vehicles are equipped with a variety of safety features, many features still depend on the driver to observe them.

Driving while distracted can lead to many events that will not only raise your premiums, but can compromise your safety and the safety of everyone else around you. From speeding tickets to causing a collision with extensive property damage — even if nobody is harmed, the actions scream “risky driver” to insurance companies. And anything that tells your insurer you’re unsafe also says they need to charge you more — just in case!

When you drive safely, you are less likely to experience events that cause damages, injuries or loss. This is also true with decreasing your driving time and/or distances when possible. The less you’re on the road, the less likely you are to get into car trouble. From not needing to file a claim to getting discounts for low mileage and being accident-free, claims-free and ticket-free, each of these things can lead to savings!

5. Drive With an Insurance Tracker

Some insurance companies offer a discount if you use a tracker to monitor how you drive. Similar to pay-per-mile insurance, you’ll have to either install a device into your car or download an app to your phone that tracks your driving. But unlike pay-per-mile insurance, this time the tracker really is assessing how you drive in addition to how much you drive. This is known as usage-based insurance.

With your permission, some of the things your insurer might monitor include:

  • Driving speed
  • Cellphone use while driving
  • Sudden acceleration
  • Rapid lane changes
  • Hard braking/sudden stops

Your insurer will also track driving patterns like what time of day you typically drive, how often you’re on the road and how far you typically travel. The data collected from your driving is used to assess how safe of a driver you are and predict your riskiness.

If you’re okay with having data collected, an insurance tracker can save you big bucks on insurance — some companies offer up to 30% in discounts for participants in their insurance tracker program! And it might incentivize you to be a safer driver, which can lead to even more breaks in your premiums.

6. Drop Uneconomical Coverages

If you drive an older vehicle, a full-coverage policy might not be worth it. When a car’s value is lower than what you’re paying to protect it, your coverage isn’t economical.


The general rule is this: When the cost of comprehensive and collision coverage exceeds 10% of your car’s value, it’s time to drop comprehensive and collision and carry only liability coverage.

When To Drop Comprehensive & Collision Coverage
Coverage Cost ≥ 10% of Car’s Value = Drop Comprehensive and Collision

There’s one exception to this rule though. If — in the event of an accident — you know you can’t afford to cover the costs of replacing or repairing the car, forget the math and keep full coverage.

7. Improve Your Credit Score

Did you know that most states allow insurance companies to consider your credit score when determining how much they’ll charge you? And according to data collected by ValuePenguin, “The difference between a good and poor credit score can change premiums by 80%.

Of course, there are many other factors that insurance companies look at in combination with your credit score to determine your rates. But a lower credit score is associated with higher risk. So, one way to tell insurance companies you’re less risky is by having a higher credit score.

How can you do this? There are many easy ways to improve your credit score, but one way is to pay every bill on time without fail.

8. Increase Your Deductible

You should aim for at least a $1,000 deductible to get the best savings on your car insurance policy. The Insurance Information Institute (III) reports that, “Going to a $1,000 deductible can save you 40 percent or more.” But if that’s too much, consider this data from III: “increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent.”

So, if you’re willing to take on a higher deductible that’s still affordable for you, your premiums will likely go down. Increasing your deductible will also help prevent you from filing smaller or unnecessary claims — and that’s a double win!

9. Maintain Continuous Coverage

Although car insurance isn’t technically required in every state, there’s no place in the country you can drive to escape financial responsibility laws. Any time you’re on the road — if you cause an accident — you’re liable for the cost of any resulting damages, loss, or injuries. In most states, car insurance serves as proof that you can afford to pay for accidents you cause.

Continuous coverage simply means that as a driver, you have never had a lapse in (or period of time without) coverage. Why does this matter? To insurance companies, maintaining coverage demonstrates responsibility and makes you seem less risky. You’ve probably noticed by now that insurance companies adjust your premiums based on your perceived riskiness: More risky behavior equals higher premiums and less risky behavior equals lower premiums.

How much can a lapse in coverage cost you? According to ValuePenguin, if you go 30 days or less without coverage, you’re looking at, “an 8% average car insurance rate increase.” Going more than 30 days without coverage costs drivers, “an average premium increase of 35%.”


We haven’t even gotten to state penalties for failing to maintain continuous coverage. So, to keep your rates low, keep your cars covered!

10. Shop Around for Coverage

We’ve saved this tip for last because it’s the only one you can’t do if you want to stay with your current insurer. Yes, many insurance companies offer loyalty discounts if you stay with them for a set period of time. But, there’s a good chance this discount doesn’t outweigh the savings you’ll get shopping around.

“The cost of insuring your vehicle right now has a bigger disparity from one insurer to another than it normally would,” says Clark. You can read about what’s causing this disparity and why Clark recommends re-shopping your car insurance at least every three years here.

To shop around, you’ll want to compare rates for the same types and amounts of coverage from different companies. If you can, choose at least three different car insurance companies to compare. Then, get a quote from each of them for identical coverages. Check out this article for more detailed steps on how to compare auto insurance quotes.

The process can take a bit of time. But shopping around guarantees you’re getting the best — or at least a fair — price for your coverage.

Final Thoughts

Don’t overpay for your auto insurance! There are many ways you can save money on your premiums. Even knocking a few dollars off each month adds up.

Many of the ways to save apply whether you’re shopping around or just checking with your current insurer for new deals. You’ll likely see some of the biggest savings if you’re willing to shop around though. I’ve written about how to re-shop your car insurance if you want tips, and we have a guide on some of the best car insurance companies to consider.

But again, even if you don’t want to re-shop, you can always call your insurer and ask what offers are available to help you save.