10 Proven Ways to Pay Less for Car Insurance

Rates are going up — and could rise even higher due to tariffs. Use these strategies to lower your premium.

David Rodeck,

Updated June 11, 2025

AARP

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Published May 27, 2025

/ Updated June 11, 2025

a car leaving tracks behind in the shape of the dollar sign symbol

Car insurance has gone up and could continue to climb. Here's how to get a more affordable rate.

Rob Dobi

You aren’t alone if you’re frustrated about your car insurance bill. Rates spiked after the COVID-19 pandemic created high inflation and drove up the price of vehicles, parts and repairs. They’ve only gone up from there, with full-coverage premiums increasing an average of 42 percent (from $1,633 to $2,313) from 2022 to 2024, according to a report from Insurify, an insurance comparison website.

An ongoing trade war with other countries could push insurance rates even higher, “especially for foreign or electric vehicles,” says Laura Longero, executive editor at CarInsurance.com, an auto insurance comparison website, as these vehicles rely on more parts and batteries from overseas.

It’s a frustrating time for car owners, but there are ways to take action. Implementing these proven strategies can help you pay less for car insurance in today’s market.

1. Review your coverage

Take the time to assess your policy with your insurance agent annually, recommends Longero. Your agent may find opportunities for discounts or ways to adjust your plan’s coverage levels to save you money.

“Life changes, and so should your coverage,” says Longero. “If you’re driving less, have paid off your car or moved, updating your policy to reflect your current situation can lower your premium.” If your adult children have moved out and no longer regularly drive your vehicles, you can save by removing them from your policies.

2. Explore discounts

Insurance companies offer a wide range of discounts. “You should ask your agent about what’s available, as many aren’t applied automatically,” says Erika Tortorici, owner of Optimum Insurance Solutions in Hamilton, Massachusetts.

Many insurers offer the following:

Electronic- and automated-payment discounts. You might qualify for a lower premium simply by enrolling in electronic billing statements, with savings typically anywhere from 4 percent to 10 percent, depending on the carrier.

Some insurance companies also offer a discount of about 5 percent for setting up automated payments depending on the carrier. “Carriers offer these discounts because automatic recurring payments can help you avoid missed or late payments,” says Katie Ekstrom, assistant vice president of auto product development at Travelers. If you have the cash, you might also be able to save money by paying premiums annually instead of in monthly installments.

Anti-theft device discounts. Adding anti-theft features and devices, like a car alarm or a stolen vehicle recovery system, could save you anywhere from 5 percent to over 20 percent of your premium, depending on the carrier and where you live.

Policy bundle discounts. Some insurers will give you a lower rate if you insure multiple vehicles with them, reducing premiums by about 10 percent to 25 percent. This includes cars, boats, RVs and motorcycles.

You can also save by buying several types of insurance from the same company, a setup known as bundling. For example, Progressive says new customers save more than 20 percent, on average, by bundling home and auto insurance; Nationwide says it offers discounts of up to 15 percent for bundling those policies; and State Farm reports that customers who bundle save, on average, $1,273 annually.

Low-mileage discounts. Retired or work from home? That probably means you drive less. Check whether your insurer offers a low-mileage discount.

Some insurers also offer pay-per-mile policies, where they charge a monthly base rate and a couple of cents for every mile driven.

Retired military discount. Your insurer might offer a discount, typically 10 percent to 15 percent, to thank you for your service in the armed forces.

Membership discounts. AARP members may qualify for up to 10 percent off auto insurance premiums from The Hartford. AAA members save 5 percent on premiums for buying AAA car insurance. Costco members receive a discount for buying insurance through its CONNECT program, supported by American Family Insurance. Insurers may also offer discounts to members of other groups, like professional organizations, unions and alumni associations.

3. Compare quotes

If you haven’t tested the insurance market in a while, it could be worth shopping around for a new policy. “Not all insurers rate risk the same way. Rates can vary hundreds of dollars per year for the same driver, so getting quotes from at least three companies can help you find the best deal,” says Longero. Car owners who switched insurers in the past five years saved a median of $461 in annual costs, a 2024 Consumer Reports survey found.

You can obtain free quotes directly from major insurers by phone or online. Another option is to use a no-fee independent agent that sells policies from multiple insurers, allowing you to compare your options quickly.

There are also insurance comparison websites like CarInsurance.com, Insurify and The Zebra. After you fill out a short questionnaire, these websites provide free quotes from multiple insurers.

4. Improve your credit score

One factor that auto insurers use to determine your rate is your credit score. “If you have a low credit score with the three major credit bureaus — Equifax, Experian and TransUnion — that could adversely impact your rate,” says Ekstrom.

Americans with clean driving records and excellent credit (commonly scores of 800 or higher) paid 49 percent less in premiums for the same insurance coverage as those with fair credit (scores of 580-669), according to a 2023 Consumer Federation of America study. Those with poor scores (below 580) paid 115 percent more than those with top credit scores and 44 percent more than those with fair credit scores.

Consider working on boosting your score in the months before applying for a new car insurance policy to get a better offer. You can raise your credit score by making credit card payments on time, reducing your credit utilization ratio and reviewing your credit report for errors.

5. Raise your deductible

Your policy’s deductible is what you’d pay out of pocket when filing a claim before your insurance kicks in. For example, if you have a $500 deductible and your car requires $2,000 worth of repairs after an accident, you’d pay the first $500 and your insurance company would cover the remaining $1,500.

Increasing your deductible from $200 to $500 can lower your collision and comprehensive coverage insurance costs by 15 percent to 30 percent, according to the Insurance Information Institute.

6. Think twice before filing a claim

If you get into a fender bender, consider covering the damage yourself rather than submitting a claim to your insurer. Doing so can prevent your insurance company from raising your rate. “Your agent can help you evaluate whether filing is the right move, especially for smaller incidents, to avoid rate hikes from unnecessary claims,” says Tortorici.

7. Stay safe on the road

Many insurers offer discounts for customers with clean driving records, so drive cautiously. Geico, Nationwide and State Farm offer discounts for being accident-free for a set period of time, typically three to five years.

Moreover, consider enrolling in a defensive driving course. In 34 states and Washington, D.C., taking an approved defensive driving or driving education course earns motorists a discount of up to 15 percent. (Some insurers apply this discount to eligible older drivers regardless of where they live.)

AARP offers its own defensive driving program, the Smart Driver™ course. The class teaches proven techniques to help keep you and your loved ones safe on the road.

8. Let your insurer monitor your driving

Some insurance companies will, upon your request, use a system called telematics to track how you drive and, depending on your habits — whether you follow the speed limit, brake and accelerate smoothly, or refrain from checking your phone — may lower your premium.

“These programs offer you a more personalized auto rate based on your safe driving,” says Katie Irey, senior vice president of insurance product design and life cycle management at Allstate. “They encourage drivers to make the everyday smart decisions that can help prevent accidents.”

Before enrolling, check with your insurer to see whether risky driving performance could negatively affect your rates. Some companies raise a customer’s premium after tracking unsafe driving behavior.

9. Skip coverage for older vehicles

There are four main types of car insurance:

Liability coverage pays for damage and injuries you cause others in an accident where you’re found at fault.
Collision coverage pays for damage done to your vehicle in an accident regardless of who is at fault.
Comprehensive coverage pays for non-accident damage, like vandalism, theft and certain natural disasters.
Uninsured motorist coverage pays to repair your car when the other driver is uninsured or underinsured.

If you have an older vehicle that isn’t worth very much, it may make sense to drop your comprehensive and collision coverage to save money.

10. Factor in insurance when car shopping

Insurance costs should be part of your car buying criteria when you go looking for your next vehicle. Generally, the more expensive the car, the more expensive your insurance will be, since it costs more to repair or replace the vehicle.

The type of vehicle you purchase also matters for insurance rates. Cars with built-in safety features, such as airbags, antilock brakes and security features like anti-theft technology, may qualify for lower premiums. “Vehicles with these types of features are less likely to be in an accident or stolen than those without them,” says Allstate’s Irey.

Keep tariff taxes in mind too. Generally, vehicles with domestic parts are cheaper to repair and, therefore, cheaper to insure, says Longero.

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David Rodeck is a writer based in New York City. He has written for Kiplinger’s Personal Finance, Forbes Advisor and Investopedia. Before becoming a full-time writer, Rodeck was a financial advisor.