Owning or leasing a car can be a costly venture. Between fuel and ongoing maintenance, a vehicle’s cost extends beyond its sticker price. And before you can drive your car, you need to insure it.
The average cost of car insurance is $103 monthly for liability-only coverage and $182 monthly for full coverage in the U.S., according to Insurify data. Insurance costs can vary depending on where you live, your car, your age, your driving history, and more.1
Understanding what affects your insurance costs can help you make adjustments to lower your monthly insurance premiums.
Insurance companies rely on data to set insurance premium rates. But the cost you’re paying now doesn’t have to be what you’ll always pay. Here’s what can help lower your car insurance costs.
Some insurance companies offer a discount on insurance premiums if you attend a safe driving course. These courses are also known as defensive driving courses and are different from a driver’s education course taken before getting a license. Safe driving courses are designed to improve your driving skills and prepare you for various driving scenarios.
Courses may be available through your insurance provider or an approved third-party organization. For example, AARP offers online and in-person versions of its Smart Driver course. Ask your insurance agent for a list of qualifying courses and requirements.
Another way to cut costs is by bundling multiple insurance policies through the same insurer.
Insurance companies may offer a discount if you carry two or more types of insurance with them, like auto and homeowners insurance.2 Bundling your insurance also means you have only one payment to manage and one account login.
A deductible is your out-of-pocket cost before your insurance kicks in. By requesting a higher deductible, you can lower your monthly premiums. Raising your deductible from $200 to $500 could reduce your monthly insurance costs by 15% to 30%.2
Boosting your deductible increases your out-of-pocket cost when filing insurance claims. Before increasing your deductible, make sure you have money set aside to cover potential insurance claims.
If you don’t drive very often, switching to a pay-per-mile car insurance program could help you save money. These programs are geared toward low-mileage drivers and are available through some insurance providers.
With pay-per-mile programs, you pay a base monthly rate, plus a per-mile rate. A pay-per-mile program could save you significantly if you work from home, rely on rideshares, use public transportation, or have a short commute. Check with an insurance agent to see if pay-per-mile car insurance is available where you live.
One of the best ways to save money is to shop around for the best rates.2 Even if you’re satisfied with your insurance company, it’s worth looking at competitors to see whether you can save money.
Compare multiple insurance quotes to find out whether you’re getting a good deal or whether you can save money by switching insurance providers.
Maintaining a good driving record can also lead to additional discounts from your insurance provider. As a safe driver, you not only qualify for discounts, but you also better protect yourself and others.
A history of driving the speed limit, avoiding accidents, and no driving infractions can help show your insurance company that you’re a responsible driver. Many insurance companies offer discounts for staying claim-free or traffic violation-free for a specific time.
Adding safety equipment to your vehicle can also help you score valuable discounts to reduce your monthly auto insurance premiums. By purchasing a vehicle with specific safety features, like airbags, antilock brakes, and daytime running lights, you may qualify for additional discounts.
Adding safety features after purchasing your car can also net discounts to lower insurance costs. Installing an anti-theft device can also earn you a discount with many insurance companies.
Insuring more than one vehicle through the same insurance company could earn you an additional discount to lower your costs. Multi-car insurance requires having two or more vehicles at the same address on one policy. Generally, every vehicle on the policy has the same coverage, but some coverages may be customizable for individual cars.
Insurance providers offer discounts for various reasons. Beyond the common discounts, you may be able to score other discounts like:
Early bird discount
Loyalty discount
Automatic payment discount
Paperless statement discount
Usage-based discount
Smart driver discount
Away at school discount
Paid in full discount
Homeowner discount
Online quote discount
Some insurance companies may offer discounts for customers who drive a hybrid or electric car. Check rates to ensure you’re saving money by driving an electric car. Some insurance companies may charge more to insure an electric car, depending on where you live.
Call an insurance agent if you’re looking for ways to reduce your car insurance monthly premiums. They can look over your policy to see whether you can make any changes to save money. Insurance agents may also advise you on what discounts are available and what you need to do to qualify for them.
Several factors can affect the insurance rates you receive from your provider from the start. While you may have control over some of these, most may not be something you can immediately change to lower your premiums.
Insurance company: Auto insurance rates vary among insurers. Shopping around can help you find the best rates for the coverage you need.
Age: Younger drivers with less experience often pay more for auto insurance than older, more experienced drivers.
Location: Insurance requirements vary between states. Where you live significantly affects the type of coverage required and the cost. Living in areas with higher crime rates can also mean paying more to insure your car.
Coverage type: The coverage you carry also affects monthly premiums. Most states require some level of liability protection or more. Your policy may also include other coverages like comprehensive coverage, collision coverage, uninsured/underinsured motorist coverage, and personal injury protection.
Driving record: Drivers with multiple accidents or moving violations typically pay more for auto insurance than those with clean driving records.
Vehicle: The type of vehicle you drive can also affect insurance premiums. Insurance companies consider the vehicle’s cost, the likelihood of theft, repair costs, safety records, and even how much potential damage it can inflict if it’s involved in an accident.
Insurance score: Insurance companies often look at your insurance score to determine the likelihood of future claims. This score is largely based on your credit history, and a low score could mean paying more for auto insurance.
Gender: Women statistically get in fewer accidents than men, making them less of a risk for companies to insure. Women typically pay less for car insurance than men.1
Comparing quotes online from multiple providers ensures you know where you stand and can help you find the lowest premiums. Insurance-comparison websites help drivers get quotes from hundreds of insurance companies quickly and easily.
Generally, you’ll need to enter some basic personal information and details about your vehicle and driving habits. You’ll have quotes from multiple companies in minutes.
Some insurance companies have lower premiums than others. COUNTRY Financial, Auto-Owners, and USAA offer the lowest liability-only car insurance quotes on average, starting at $34 a month.
Here’s a look at some of the best cheap car insurance companies to consider when looking for auto insurance coverage.
Where you live plays a significant role in how much you’ll pay for car insurance. States like North Carolina, Iowa, and Alabama have some of the cheapest average rates compared to other states.
Here’s a look at average monthly liability-only quotes from the cheapest car insurance company in each state, based on Insurify data.
Here are answers to some commonly asked questions about how insurance works and how to save money on car insurance.
Several factors affect insurance premiums, including age, gender, driving record, credit-based insurance score, vehicle, and coverage type. Shopping around can help you find the best rates for the type of coverage you need.
Insurance companies typically charge higher premiums for younger, less experienced drivers under 25. You may see a drop in insurance costs in your mid-20s, but your premiums may decrease before or after this time, depending on your insurance company. Once you reach age 75, insurance rates begin to increase again.
Negotiating lower rates with your insurance company is impossible, but you can take steps to qualify for discounts that could lead to paying less each month. Many insurance companies offer discounts, including multi-car, multi-policy, safe driver, good student, paperless, auto payment, anti-theft, and defensive driving course discounts.
If your auto coverage includes accident forgiveness, you may not see your premiums increase. If not, and you’ve been in an accident, some insurance companies may lower your rates after you complete a safe driving course. Other ways to lower your cost are to increase your deductible, change your coverage type, and look for other available discounts.
DUI violations cause your rates to increase. You can sometimes lower your rates by completing a safe driving course, increasing your deductible, installing safety features in your vehicle, and keeping a clean driving record for several years following the incident.
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.
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Over 3 years of experience producing content on insurance and personal finance.
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