How to save money on car insurance (2022)

There’s no question that adequate auto insurance is a necessity, but you shouldn’t have to pay through the nose to get it. By knowing what factors determine auto coverage rates and a few tips for comparing prices, you can find the most affordable auto insurance policy for your situation.

In this article, our Home Media review team will highlight some proven strategies to save money on auto insurance. We’ll also look at the average costs of auto coverage and what’s included in the price you pay. Once you’re ready to explore your options, check out our rankings of the best car insurance companies to better inform your decision.

Average auto insurance rates

It’s good to know what people typically pay for auto insurance before you start looking for the best possible rates. According to our cost estimates, the average 35-year-old American driver with good credit and a clean driving record pays about $1,730 per year either $144 per month for full coverage car insurance. When it comes to minimum liability coverage, the national average rate is $635 per year either $53 per month.

US map showing the average annual cost of car insurance in each state

It’s good to know what people typically pay for auto insurance before you start looking for the best possible rates. According to our cost estimates, the average 35-year-old American driver with good credit and a clean driving record pays about $1,730 per year either $144 per month for full coverage car insurance. When it comes to minimum liability coverage, the national average rate is $635 per year either $53 per month.

Auto Insurance Companies Ranked By Annual Premium Estimates

Factors Affecting Auto Insurance Rates

The price you pay for car insurance makes a big difference, and knowing what factors are within your control can help you find more affordable 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 depending on the state and even the city where you live. Drivers in more urban areas often face higher auto insurance rates, while those in more rural areas tend to find prices more affordable.
  • Years: Young drivers and older drivers generally pay higher auto insurance rates as they are considered higher risk. New drivers, regardless of their age, will also have higher car insurance costs.
  • driving record: If you have an at-fault accident, moving violations, or a DUI/DWI conviction on your record, an auto insurance policy will cost more.
  • credit history: A high credit score is a sign of a reliable and financially responsible driver, leading to lower auto insurance policy costs. Having a low credit score 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 are more expensive after an accident.
  • Deductible: Generally, you can choose the amount you pay out-of-pocket for a covered repair, but a lower deductible leads to a higher premium.

How much car insurance do you need?

You can choose the level of insurance coverage you want as long as you meet the minimum requirements for your state. Most states require liability insurance for personal injury and property damage, which covers the cost of damages for accidents you cause. Some states require underinsured or uninsured motorist coveragewhich helps cover medical bills and repair costs when the at-fault driver does not have enough insurance.

Full coverage car insurance includes collision protection Y full coverage in addition to liability coverage. Collision insurance covers damage to your vehicle from 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 purchase full coverage insurance. If you finance a vehicle, lenders generally require that you maintain full coverage until you pay off the loan.

Our tips for saving money on car insurance

when it comes to finding cheap car insuranceComparing quotes 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 rates. Here are a few more ways you can lower your car insurance bill without compromising 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 really afford to pay out of pocket in the event your vehicle is seriously damaged.
  • Consider local options: Major insurance providers may not be able to offer you the lowest rates. Local insurance agents and smaller companies may be a good fit for your needs.
  • Find discounts: Most providers offer car insurance discounts. Among the most common policy discount opportunities are multi-vehicle, multi-policy, military, homeowner, good student, customer loyalty and safe driver discounts. Learn about discounts with potential new providers, but don’t forget to ask your existing insurer if you qualify for savings as well.
  • Try Usage-Based Programs: Many insurance companies offer discounts based on mileage and telematics insurance programs to help you save money. If you drive fewer miles annually than the average motorist or if you consistently practice safe driving habits, tracking your driving through a company-provided app or telematics device could lower your premiums.
  • Increase your deductible: A higher deductible means lower premiums. Keep in mind that raising your deductible will make you responsible for more out-of-pocket costs if you file a claim. You will need to find the right balance between risk and savings for this strategy to work for you.
  • Take a road safety course: Many insurance companies offer discounts to customers who take safe driving courses. Even if you have a clean driving record, taking a defensive driving course could put you online for significant savings.
  • Install an anti-theft device: Insurance providers sometimes offer discounts for drivers who install anti-theft devices in their vehicles. Be sure to ask which devices qualify.
  • Improve your credit score: This is more of a long-term strategy, but you can lower your insurance rates in most states by reviewing your credit report and then working to improve your credit score on a consistent basis.
  • Reduce coverage if applicable: Comprehensive and collision coverage isn’t as important if you drive an older car. Review your coverage periodically to make sure you’re not paying more than you need to.

How to save money on car insurance: conclusion

Although many factors influence how much you pay for coverage, you can find an affordable auto insurance policy if you know where to look. One of the best ways to save is compare car insurance quotes from multiple providers to find the best option for your needs.

Our recommendations for car insurance

As you begin your search for affordable auto insurance, we recommend checking out State Farm, Geico, and USAA.

State Farm: Editor’s Choice

As the largest insurer in the US, State Farm has an excellent reputation in the industry and a great track record of customer service. It is generally one of the most affordable insurers and offers especially low rates for student and teen drivers. State Farm policyholders can save with the company’s usage-based Drive Safe & Saveā„¢ program, which offers discounts for safe driving habits.

Keep reading: State Farm Insurance Review

Geico – Affordable for Most Drivers

In our industry-wide review, our team recognized Geico as one of the best options for the average driver. 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 wide selection of additional coverage options, including mechanical breakdown insurance, is also a major draw.

Keep reading: geico insurance review

USAA: Low Rates for Military

Although USAA coverage is limited to military members, veterans, and their immediate families, it is an excellent option 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 JD Power customer satisfaction studies. It tends to be the cheapest auto insurance provider for those who qualify.

Keep reading: USAA Insurance Review

How to save money on car insurance: frequently asked questions

Our Methodology

Because consumers trust us to provide factual and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto insurance companies. We collect data on dozens of auto insurance providers to rate companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

In this article, we select companies with high overall ratings and cost ratings. Cost ratings were based on auto insurance rate estimates generated by Quadrant Information Services and discount opportunities.

*Accurate data at the time of publication.

Leave a Comment