If you’re currently paying expensive car insurance rates, you’re not alone. Car insurance rates will increase by 7% in 2024 — nearly double the median year-over-year hike — according to Insurify data, and are likely to continue increasing.
But you still have ways to find cheap car insurance, including maintaining a good driving record, comparing car insurance quotes, and opting for high-deductible car insurance.
Here’s what you need to know about finding cheap coverage and the best ways to go about doing so.
Finding the cheapest car insurance rates requires strategy, not luck. Learn the best ways to secure affordable rates without compromising quality coverage below.
A clean driving record is like a gold star in the insurance world. Insurers will view you as a low-risk driver if you don’t have any moving violations on your record, like speeding tickets, at-fault accidents, and DUIs. The lower the risk you pose, the lower the rates insurers can offer you. Drivers with a clean history typically pay the lowest car insurance rates.
The table below shows average monthly liability-only rates for drivers with different incidents on their record.
Comparing car insurance quotes is a top strategy used to save on premiums because it works. The Insurance Information Institute recommends drivers get at least three free car insurance quotes from different auto insurers to find the cheapest companies.1
Companies like State Farm, GEICO, and Progressive advertise savings of up to $650 for drivers who switch from a different insurer.
Bundling insurance coverage is a reliable way to save money on all your insurance policies. Auto insurers offer significant savings when you buy more than one policy, like auto and home or renters insurance. If you purchase two or more coverages from one insurer, the company will often provide a sizable discount on both policies that brings down your overall insurance costs.
For example, State Farm customers can save $1,273 per year if they bundle their home (or condo) and auto insurance. And USAA offers savings of up to 10% when active military members, veterans, and their families bundle home and auto insurance.
A deductible is how much you need to pay when filing a claim for certain types of coverage, like collision and comprehensive insurance, before your auto insurance kicks in. Deductibles don't apply for liability claims.
When you set a higher deductible for collision and comprehensive coverage, you reduce the insurer’s risk. In exchange for a higher deductible, your insurer will typically lower your premiums. But don’t increase your deductible unless you can pay it in the event of vehicle damage or loss.
Insurance companies consider the type of car you drive when determining your premium. Driving a vehicle recognized for safety, with lower repair costs and a low theft rate, can lead to lower premiums.
If you’re in the market for a new car, consider selecting a car from the Insurance Institute for Highway Safety’s 2023 Top Safety Picks.2 You can also explore vehicle safety ratings from the National Highway Traffic Safety Administration.3
Here’s a closer look at some of the cheapest vehicle makes and models to insure:
If you’re a low-mileage driver, you shouldn’t have to pay the same car insurance rates as more frequent drivers. With pay-as-you-drive car insurance, you can unlock long-term savings. Companies like Metromile, Allstate, Hugo, and Nationwide offer usage-based insurance for people who drive less. It’s a great option to save money if you drive fewer miles than most.
Insurance discounts come in many forms, and they can help reduce your premium by 25% or more. Depending on your situation, you may earn savings for safe driving, installing anti-theft devices, and paying for coverage in full.
Students can benefit from good student and away-at-college discounts, and many insurers offer discounts for military members and senior citizens. It’s worth asking your insurance agent or company about savings opportunities when shopping for coverage.
The national average cost of car insurance is $143 per month, or $1,712 per year. Insurance costs can vary by driver, but how much you ultimately pay for coverage isn’t random. Insurers consider several factors when assessing your risk level as a driver.4
Here’s a look at the factors that influence insurance costs.
Auto insurance companies typically look at your marital status, gender, age, credit history, and driving history before offering you an insurance quote. Young drivers have some of the highest rates.
If you have a spouse, are older than 30, and have fewer traffic violations, insurers see you as a safer driver and often offer lower rates. Driving frequency is another factor insurers consider. Daily commuters might pay higher rates than occasional drivers.
Every car is different, so rates can vary by vehicle type and model. New luxury models or sports cars have a higher value, which typically means more expensive repair costs and higher premiums.
Vehicle models equipped with safety features suggest a reduced risk of accidents and injuries, potentially leading to more affordable car insurance policies and extra discounts for policyholders.
Like real estate, car insurance costs vary based on location. Living in a city with a high cost of living, population density, or crime rate — especially car theft — can increase base premiums in the area.
Parking on busy city streets can also increase expenses because leaving your vehicle out in the open exposes you to more risk of theft and vandalism than keeping it in a locked garage. Drivers in rural and suburban areas typically pay less for coverage than people in highly populated urban areas.
Though it may seem unrelated, your financial stability influences auto insurance rates. In most states, insurers can use a driver’s credit history to generate a credit-based insurance score. Most insurance companies view that score as a good indicator of risk, according to the National Conference of State Legislatures.5
A good credit history can suggest that you’re less likely to file a claim, so drivers with good credit pay lower rates than people with poor credit. But some states prohibit or restrict how insurers can consider credit. Insurers can’t use credit history to set rates in California, Hawaii, Massachusetts, and Michigan. And Oregon and Utah limit how insurers can use it.6
Whether you live in a no-fault or at-fault state can affect your car insurance costs. Drivers in no-fault states typically pay higher average rates because, in the event of an accident, each involved party needs to file a claim for any medical costs with their own auto insurer. In at-fault states, the responsible driver must cover the other driver’s vehicle damage and bodily injury.7
The type of car insurance policy and coverage limits you choose can affect your overall insurance cost. For instance, liability coverage that meets state-minimum auto insurance requirements tends to be more affordable, but full-coverage policies come at a higher price because they offer more financial protection.
Your choice of coverage is one of the most significant factors that affect your cost. Generally, the more coverage you buy, the more you’ll pay for premiums. For example, a minimum-coverage auto policy doesn’t include the same amount of vehicle protection that full coverage does, which is why it’s cheaper.8
Here’s what to know about your different coverage options.
Liability insurance pays for damage you cause to others during an accident — like bodily injury or property damage. Full-coverage insurance, on the other hand, includes liability insurance, comprehensive coverage, and collision coverage.
Most states typically only require a liability-only policy, which covers damage and injuries you cause to other people or property. Opting for full coverage is typically more expensive, but you’ll get more robust financial protection, like coverage for non-collision incidents such as fire, theft, or severe weather. Full coverage also helps pay for vehicle repairs and replacement.
If you finance or lease your vehicle, your lender will probably require you to carry full coverage.
The information below should answer any of your remaining questions about finding cheap insurance coverage that meets your insurance needs.
COUNTRY Financial, Auto-Owners, and USAA have the cheapest liability-only car insurance. They have respective monthly rates of $34, $43, and $51.
Certain cars cost less to insure, including vehicles with good safety features, low rates of theft, and solid industry rankings. Less expensive cars that require less money to repair can also lead to cheaper auto insurance premiums since insurers want to avoid hefty insurance claims payouts.
You can potentially get cheaper car insurance premiums by increasing your deductible, bundling multiple insurance policies together with the same company, or taking advantage of various discounts your insurance company may offer.
Yes. Car insurance companies typically provide a number of discount opportunities that can help you get the cheapest rates. Savings vary by company, but most insurers offer good driver, good student, pay in full, and safety feature discounts.
Buying car insurance online might be quicker. Buying coverage through an agent can take longer, but agents can give you personalized advice on coverage and policy limits. But whether you purchase a policy online or through an agent, the best way to find the cheapest car insurance company for you is by shopping around and comparing rates.
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
)
7+ years in content creation and management
5+ years in insurance and personal finance content
Featured in
){kind=logo}
){kind=small}
){kind=small}
){kind=small}
)
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
)
)
)
)