Shopping for cheap car insurance can feel like hunting for Black Friday deals. You know what you want, but you have to compare different prices from different companies. And with each insurer using a unique pricing model, how can you really know when you’ve found the best deal?
Car insurance costs continue going up year after year, so you may be looking for ways to find cheaper coverage. A 2024 J.D. Power study revealed that nearly half of American car insurance customers have shopped for a new policy within the past year.
But while rates may be at an all-time high, it’s still possible to get cheaper car insurance if you consider these steps.
1. Work with an agent
The best way to get cheap car insurance is to compare insurance quotes from several insurers at least once a year, but this process can be time consuming. An independent agent can shop from multiple insurers for you, including smaller, regional insurers that may offer cheaper coverage than the large companies advertised on TV. An agent can also identify available discounts and help you choose appropriate coverage limits.
You can find an independent agent by asking friends or family for a referral, searching online and checking on insurer websites or a national network of independent agents.
2. Ask about discounts
Don’t assume you’re getting every discount you qualify for. Ask your insurer or agent about potential discounts to be sure you’re maximizing your savings.
You may not qualify for every discount offered by your insurer, but some of the most common ways to save include:
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Bundling multiple policies together with the same insurer.
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Being a safe driver by maintaining a clean driving record or taking a defensive driving course.
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Signing up for paperless billing or setting up automatic payments.
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Driving a vehicle with anti-theft or specific safety features, like air bags or anti-lock brakes.
3. Increase your deductible
If your policy includes a deductible — which is the dollar amount you’re responsible for in the event of a claim — increasing your deductible amount will lower the cost of car insurance.
Ryan Andrew, president of the Andrew Agency, an independent insurance agency in Richmond, Virginia, has seen more and more customers raise their deductible to keep their auto policy affordable. “Our standard deductible today is $1,000. It’s the highest that it’s ever been,” Andrew says.
If you do decide to raise your deductible, be sure you have enough cash on hand to cover the amount. Typically, the deductible will be subtracted from a claim payout. So if your insurer approves a claim of $10,000 and you have a $1,000 deductible, you’d receive a claim check of $9,000.
4. Confirm whether you need full coverage
If your policy includes comprehensive and collision coverage (two of the three types of insurance that make up a “full coverage” policy), then you may be able to drop them if you drive an older vehicle that’s not worth much. That’s because these types of coverage only pay out up to the current market value of your car, minus your deductible. So if you’d be able to afford repairs on your older car after a bad crash, it may be worth dropping these coverage types to save on your auto insurance premium.
While comprehensive and collision coverage aren’t required to drive legally, you may still be required to have them if you have an auto loan or lease your vehicle.
5. Build your credit
Most states allow insurers to use a credit-based insurance score to price auto insurance, and having poor credit can dramatically increase the cost of your policy. In fact, drivers with poor credit pay an average of 60% more for car insurance than those with good credit, according to NerdWallet’s July 2024 auto insurance rates analysis of 35-year-old drivers with a clean driving history.
Building your credit may significantly decrease how much you pay for car insurance. Some steps to build your credit include paying all your bills on time and using less than 30% of your total credit card limit.
