How To Get The Best Car Insurance Rates

Don't Cut Coverage To Cut The Price

The cheapest policy is usually the one with state minimum limits, and that's the policy most likely to leave you paying out of pocket after a serious crash. Minimums are as low as 25/50/25 in many states, meaning $25,000 per person for injuries you cause. Anything above your limits can come from your savings, your home equity or your investment and crypto accounts.

Start by choosing coverage that protects what you own, then look for the lowest price on that coverage. Our page on how to read your auto insurance policy explains each coverage and what the numbers mean.

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Know What Sets Your Premium

Insurers weigh a long list of factors, and the rules vary by state:

• Driving record: tickets, accidents and DUIs.
• Claims history: your past insurance claims, which insurers see in a shared database.
• Credit-based insurance score: used in most states.
• Age and experience: teen and new drivers pay the most.
• Location: your ZIP code's theft, crash and repair costs.
• Vehicle: price, repair costs, safety ratings and theft rates.
• Annual mileage and use: commuting, pleasure or business.
• Coverage and deductible: higher limits cost more, higher deductibles cost less.
• Marital status and gender: allowed in some states, banned in others.

Your driving record carries the most weight. Keep it clean, and take a defensive driving course if your state gives a discount or lets it remove points.

How Credit Affects Car Insurance

A credit-based insurance score uses parts of your credit report to predict claims. California, Hawaii and Massachusetts ban its use in auto insurance, and Michigan bans using credit to set the base rate, according to the National Association of Insurance Commissioners. Several other states, including Maryland, Oregon and Utah, restrict how it's used.

In the rest of the US, Alexa found credit was the second-biggest rate factor she saw as an agent, after having a teen driver in the household. Paying bills on time and keeping card balances low can bring your rate down at renewal. Our page on how your credit rating can cost or save you thousands covers the steps.

Shop Around At Every Renewal

Rates for the same driver can vary widely between insurers, so get at least three quotes for identical coverage and deductibles. Do it at each renewal and after any life change: moving, marriage, a new car or a ticket dropping off your record.

You can shop three ways:

• An independent agent quotes several insurers at once and can help you build the right coverage. Alexa preferred this route because an agent can explain trade-offs most buyers don't know to ask about.
• A captive agent sells one company's policies.
• Online, directly with insurers is fast and works well once you know which coverages and limits you want.

Whichever you use, compare the same limits line by line. A cheaper quote with lower liability limits or no uninsured motorist coverage isn't a better deal.

Ask For Every Discount

Common discounts include multi-policy (bundling auto with home or renters), multi-car, good driver, good student, defensive driving course, safety features, paperless billing, paying in full, and low mileage. Ask your insurer for a full list. Many won't apply a discount unless you ask.

Consider Usage-Based Insurance

Usage-based or telematics programs track your driving through an app or device and reward low mileage, smooth braking and fewer late-night trips. They can save money for careful, low-mileage drivers. Read the terms first: some programs can raise your rate for risky driving, and the data includes where and when you drive.

Choose Your Deductible Wisely

Raising your deductible from $500 to $1,000 lowers your collision and comprehensive premiums. Only do it if you have the deductible in cash. Keep that money in an insured savings account, not in stocks or crypto that could be down the week you file a claim.

On an older car, compare the yearly cost of collision and comprehensive with the car's value. If you're paying hundreds a year to protect a car worth a couple of thousand dollars, dropping those coverages may make sense.

Getting Good Rates Outside The US

The same principles apply in other countries: compare quotes, ask about discounts and don't cut coverage below what protects you. In the UK, the Financial Conduct Authority has barred insurers since January 2022 from charging renewing customers more than new customers for the same cover, according to the FCA. Comparison websites are the usual starting point in the UK and Australia, and in Canada rules and rate factors differ by province.

What To Watch Out For

• State minimum limits. A low premium can mean a large bill after a serious crash.
• Coverage mismatches. Compare quotes with identical limits and deductibles.
• Lapses in coverage. Even a short lapse can raise your next premium.
• Telematics surprises. Know whether a program can raise your rate before you enroll.
• Not updating your insurer. A new job with a shorter commute or a move can lower your rate, but only if you tell them.

Update

Alexa's motto used to be "the cheaper the better," and she wrote in 2016 about buying Ohio's state minimum coverage before she knew the difference between comprehensive and collision. Becoming an insurance agent changed her mind: she saw how often people who went for the lowest price couldn't cover even a seemingly minor accident.

Her new motto, the best rates for the best coverage, still holds. Ohio's minimum is now 25/50/25. The Cult of Money editors added state credit-score rules, usage-based programs, the latest price trend and advice for readers outside the US.

FAQ

How Can I Lower My Car Insurance Rate Quickly?

Compare quotes from three to five insurers for the same coverage, ask about every discount, and consider a higher deductible if you have the cash to cover it. Those three steps can lower your premium within a day.

How Often Should I Shop For Car Insurance?

At every renewal, typically every six or twelve months, and after major life changes such as moving, marriage, buying a car or a ticket aging off your record.

Does Credit Score Affect Car Insurance?

In most US states, yes. California, Hawaii and Massachusetts ban using credit for auto rates, and Michigan limits it. Elsewhere, better credit usually means a lower premium.

Is It Better To Use An Agent Or Buy Online?

An independent agent can compare several insurers and help you choose coverage, which helps if you're unsure what you need. Buying online is faster once you know the limits you want. Either way, compare identical coverage.

Is Usage-Based Car Insurance Worth It?

It can be for safe, low-mileage drivers. Check whether the program can raise your rate for risky driving, and what data it collects, before you sign up.