How to save money on car insurance

If you've renewed your car insurance policy lately, you know how expensive car insurance has become. Inflation, supply chain disruptions, labor shortages, and even natural disasters have driven up insurers’ costs. Today, the average premium for full coverage insurance is $1,897 per year.

However, there are ways to reduce your costs. Shop around for a cheaper car insurance rate, raise your deductible, bundle your auto and home insurance and more to lower car insurance premiums.

Key highlights

• The cost of car insurance increased by 12.7% from November 2023 to November 2024, based on the most recent data from the U.S. Bureau of Labor Statistics.
• Nearly half (49%) of drivers say they've actively shopped for car insurance, according to research and analysis firm J.D. Power.
• Rates are expected to increase through 2024.

Simple ways to save money on car insurance

Car insurance has gotten more expensive, and that trend is unlikely to change.

"We expect rates to slightly moderate in 2024, compared to the 20% average increases experienced in 2023, but double-digit increases will most likely be the norm in most markets across the U.S. this year," says Mark Friedlander, director of corporate communications with the Insurance Information Institute (Triple-I).

If your existing insurance policy is too expensive and you're trying to save on insurance premiums, these 10 tips can help slash your rate.

1. Shop around to find the best insurance deals

Premiums vary significantly between insurers for the same coverage. Switching to another auto insurer could reduce your premiums by hundreds of dollars each year without sacrificing coverage or increasing your deductible.

"Auto insurance is the most competitive insurance market in the U.S.," Friedlander says. "National and regional insurers are focused on growing market share and earning your business."

To demonstrate how much shopping around can help you save, we requested quotes from major insurers for full coverage policies with $100,000 of bodily injury coverage per person, $300,000 of bodily injury liability protection per incident and $100,000 of property damage coverage with $500 deductibles. Quotes were for drivers 40 years of age.

Rates vary by state, but we found that switching insurers could reduce your premiums by 50% or more. For example, the highest annual premium in Massachusetts was $4,092. By switching insurers and selecting the company with the lowest average premium, you could get a policy that costs just $528 per year — reducing your premiums by 87%.

The rates below were collected from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible. 

2. Raise your deductible, lower your premium

A car insurance deductible is how much you must pay out of pocket for repairs before your insurer starts paying for the claim. Depending on your insurance company, deductibles can usually range up to $2,500.

Generally, your premiums are higher if you have a low deductible since your insurer has to start paying losses sooner. To save money on your premiums, you can increase your deductible.

For example, we requested quotes and adjusted our deductibles. By increasing our deductible from $500 to $1,000, we reduced our annual premiums by about $170.

3. Bundle to save: Combine policies to get discounts

Whether you own your home or rent, you may be eligible for a multi-policy discount by bundling your property insurance with your car insurance policy.

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