How To Save Money on Car Insurance (2022)
There’s no question that proper auto insurance is a necessity, but you shouldn’t have to pay an arm and a leg to get it. Knowing what factors determine auto coverage rates and some shopping tips can help you find the cheapest auto insurance for your situation.
In this article, our Home Media Review team will highlight some proven strategies for saving money on car insurance. We also discuss the average cost of car insurance and what goes into the price you pay. Once you’re ready to explore your options, check out our ranking of the The best car insurance to further inform your decision.
Average car insurance rates
It’s good to know what people typically pay for car insurance before you start looking for the best possible rates. According to our cost estimates, the average 35-year-old US driver with good credit and a clean driver’s license pays about $1,730 per year or $144 per month for comprehensive vehicle insurance. The national average rate applies to minimum liability coverage $635 per year or $53 per month.
It’s good to know what people typically pay for car insurance before you start looking for the best possible rates. According to our cost estimates, the average 35-year-old US driver with good credit and a clean driver’s license pays about $1,730 per year or $144 per month for comprehensive vehicle insurance. The national average rate applies to minimum liability coverage $635 per year or $53 per month.
Factors influencing car insurance rates
There are many factors that go into the price you pay for car insurance, and knowing which factors are within your control can help you find cheaper rates.
Here’s a look at some of the key factors insurance providers consider when setting coverage rates:
- location: The cost of car insurance varies by state and even the city where you live. Drivers in more urban areas often face higher car insurance rates, while those in more rural areas tend to find cheaper rates.
- Age: Young drivers and older drivers generally pay higher car insurance rates as they are considered to be at higher risk. New drivers, regardless of age, also have higher car insurance costs.
- drive recording: If you have a culpable accident, traffic violations, or a drunk driving (DUI)/driving while intoxicated (DWI) conviction on your record, auto insurance will cost more.
- credit history: A good credit score is a sign of a reliable and financially responsible driver, which translates into lower car insurance costs. Bad credit can increase your rates — except in California, Hawaii, Massachusetts, and Michigan.
- vehicle type: Those who drive new cars and more expensive vehicles tend to pay higher insurance premiums because repairs after an accident are more expensive.
- deductible: You can usually choose the amount you pay out of pocket for an insured repair, but a lower deductible will result in a higher premium.
How much car insurance do you need?
You can choose the level of coverage you want, as long as you meet your state’s minimum requirements. Most states require liability car insurance for personal injury and property damage, which covers the cost of damage and injury from accidents caused by you. Some states require underinsured or uninsured driver insurancewhich helps cover medical expenses and repair costs when a culpable driver does not have adequate insurance.
Comprehensive insurance included collision protection and comprehensive coverage in addition to liability insurance. Comprehensive insurance covers damage to your vehicle caused by collisions with other cars, objects or buildings. Comprehensive insurance protects your car from environmental damage, vandalism and collisions with animals or parked cars.
In our 2022 auto insurance survey of 1,000 drivers, two-thirds of respondents said they typically buy comprehensive insurance. When you finance a vehicle, lenders typically require you to maintain full coverage until you repay the loan.
Our tips for saving on car insurance
When it comes to finding cheap car insuranceComparing offers from multiple vendors is a proven strategy that’s hard to beat. But that doesn’t mean it’s the only way to secure lower interest rates. Here are a few more ways you can reduce your auto insurance bill without sacrificing quality vehicle protection:
- Do your homework: Make sure you understand how much coverage is required in your state and how much is appropriate for your financial situation. Think about what you can realistically afford to pay out of pocket if your vehicle is seriously damaged.
- Consider local options: You may find that the largest insurance providers cannot offer you the lowest rates. Local insurance agents and smaller companies could prove to be the right solution for your needs.
- Look for discounts: Most providers offer car insurance discounts. Some of the most common policy discount options include multi-vehicle, multi-policy, military, homeowner, good student, customer loyalty, and safe driver discounts. Check with potential new providers for discounts, but don’t forget to ask your existing insurer if you’re also eligible for savings.
- Try usage-based programs: Many insurance companies offer discounts based on mileage and telematics insurance Programs to help you save money. If the number of miles you drive annually is less than the average driver, or you consistently practice safe driving habits, tracking your journey via a company-provided app or telematics device could lower your premiums.
- Increase your deductible: A higher deductible means lower premiums. Note that by increasing your deductible you will be responsible for more expenses if you make a claim. You need to find the right balance between risk and savings for this strategy to work for you.
- do driver safety training: Many insurance companies offer discounts to customers who take safety driving courses. Even if you have a clean driving record, taking a defensive driving course could net you significant savings.
- Install an anti-theft device: Insurance providers sometimes offer discounts to drivers who install anti-theft devices in their vehicles. Be sure to ask which devices are eligible.
- Improve your credit score: This is more of a long-term strategy, but you can lower your insurance premiums in most states if you check your credit report and then work to steadily improve your credit score.
- If necessary, reduce the coverage: Comprehensive insurance and collision protection are not so important if you drive an older car. Check your insurance coverage regularly to make sure you’re not paying more than you need to.
How to save money on car insurance: conclusion
While many factors affect how much you pay for coverage, you can find affordable auto insurance if you know where to look. One of the best ways to save is Compare car insurance Offers from multiple providers to find the best choice for your needs.
Our recommendations for car insurance
When you start looking for affordable auto insurance, we recommend checking out State Farm, Geico, and USAA.
State Farm: Editor’s Choice
As the largest insurer in the United States, State Farm has an excellent reputation in the industry and outstanding customer service. It is usually one of the cheapest insurers and offers particularly low rates for learner drivers and young drivers. State Farm policyholders can save with the company’s Drive Safe & Save™ usage-based program, which offers rebates for safe driving habits.
Continue reading: State farm insurance review
Geico: Affordable for most drivers
In our industry-wide review, our team recognized Geico as one of the top choices for the average rider. Geico has some of the lowest average rates for a wide range of drivers, and policyholders can take advantage of numerous discounts. The company’s extensive range of additional coverage options, including machinery breakdown insurance, is also a significant draw.
Continue reading: Geico insurance review
USAA: Low tariffs for the military
Although limited to military members, veterans and their immediate families, USAA insurance is an excellent choice if you qualify for coverage. USAA members get the best of both worlds: cheap car insurance and quality customer service. Customer reviews consistently give the company high marks, and the insurer scores well in many of JD Power’s customer satisfaction surveys. It’s usually the cheapest auto insurance provider for those who qualify.
Continue reading: USAA Insurance Review
How to save money on car insurance: FAQ
Our methodology
Because consumers rely on us to provide objective and accurate information, we have developed a comprehensive rating system to formulate our ranking of the best auto insurance companies. We collected data on dozens of auto insurance providers to rank the companies based on a variety of ranking factors. The end result was an overall rating for each provider, with the insurers with the most points topping the list.
In this article, we have selected companies with high overall ratings and cost ratings. The cost assessments were informed by estimates of auto insurance rates prepared by Quadrant Information Services and discount opportunities.
*Data correct at time of publication.