How to Get Cheap Auto Insurance Without Cutting Coverage

Once you have it, it’s easy to not think about your car insurance. That is, until you’re rear ended on your way home from work while stopped at a red light. That insanely expensive fix would have fallen completely on your shoulders without it. We all need car insurance, and not as a just-in-case thing — it’s legally required in most states. But that doesn’t mean you have to overpay for it, which many of us do without even knowing it. 

So, how do you get the cheapest auto insurance without sacrificing the quality of said coverage? We’re glad you asked. We’ve outlined the best ways to save on car insurance while keeping you and your vehicle protected. 

Why Car Insurance Costs Vary So Much

If you’ve ever scoffed in jealousy —  or horror — at how much someone else pays for auto insurance compared to you, there are several reasons for that. 

Where you live is a big one, because densely populated urban areas tend to have more accidents. Certain kinds of cars come with more expensive insurance. Younger drivers cost more to insure because they’re statistically more likely to get into a crash. Your driving history also can really make or break you. If you have past tickets or accidents on your record (that mailbox came out of nowhere) you’ll be paying for that beyond eternal teasing from your family telling you to watch out every time you back out of the driveway. And, as with most things, the more coverage you have, the more it’s going to cost you. 

This is why it’s so important to do your homework and comparison shop. Even someone who drives a vehicle like yours and has a similar driving history could get a different quote than you.

Shop Around and Compare Auto Insurance Quotes

Different insurance companies will weigh these factors differently. So the only way to be sure you’re getting the best price for your needs is to do some serious research and compare prices. We have a few suggestions on how to make that way easier, however. 

Best Ways to Compare Rates:

• Use The Penny Hoarder Auto Insurance Tool to compare top insurance providers. On average, drivers who shop around tend to save $860 per year or more.
• Get quotes from at least three companies before choosing a policy.
• Check local and regional insurers — they often offer lower rates than big brands.

Another thing to consider: Some companies match competitors’ lower rates if you show them a better quote.

Look for Discounts and Bundling Options

Getting multiple policies, like home and auto insurance, with one insurer and bundling them can often shave off some of the cost. Companies also tend to offer discounts to entice people like you who are looking for lower car insurance costs. There might even be some that aren’t advertised, so ask the company directly to be sure. 

Some common car insurance discounts include:

• Safe Driver Discount – If you have no claims or tickets in three or more years.
• Good Student Discount – If you (or your teen) have a B average or higher.
• Low-Mileage Discount – If you drive less than 7,500 miles/year.
• Bundling Discount – Save by combining auto and home/renters insurance.
• Defensive Driving Course Discount – Some insurers offer 5-10% off for taking an approved course.

Adjust Your Coverage and Deductibles Smartly

If you do get in an accident, your deductible is how much you’ll have to pay before your insurance kicks in. That amount is typically $500 to $1,000. The higher you make your deductible, the lower your premiums will be. So changing your deductible from $500 to $1,000 will make your monthly costs more manageable, but you should only do this if you know you can pay the higher deductible if you have to.

Other Coverage Adjustments That Can Save Money:

• If your car is older than 10 years, consider dropping comprehensive and collision. It may not be worth it because of your car’s value.
• Keep liability coverage high — it protects against major accident costs.

Pro Tip: You shouldn’t drop uninsured/underinsured motorist coverage. That’s what protects you if another driver causes an accident and can’t pay.

Improve Your Credit Score to Lower Insurance Rates

Boosting your credit score probably won’t happen overnight, but it’s a good thing to do regardless of your need to lower car insurance costs. Many insurers factor in your credit score when they come up with your rate. In fact, a lower credit score can make premiums go up by 20-50%. However, there are some states that ban insurers from doing this. Check and see if that’s the case in your state (but we still stand by the idea that improving credit scores is good for anyone).

Ways to Improve Credit & Lower Insurance Costs:

• Pay bills on time and pay down your debt.
• Check your credit report for errors (get a free copy at AnnualCreditReport.com).
• Avoid opening new credit accounts right before renewing insurance.

Drive Safely and Maintain a Good Record

Even a minor blemish in your driving history can make your costs go up. If you’ve been in several accidents (whether they were your fault or not) have DUIs or speeding tickets, you’re going to pay higher premiums. These make you seem like you’re at a higher risk for future accidents. In fact, even minor violations like getting caught doing a rolling stop or driving with expired tags will be enough to affect prices. Most insurers will reward drivers with squeaky clean records with discounts or lower rates. Or, at the very least, rates that don’t go up. 

How to Keep Your Driving Record Clean:

• Avoid distracted and risky driving (texting, speeding, aggressive driving).
• Consider usage-based insurance (UBI), which rewards safe driving with discounts.
• Ask if your insurer offers “accident forgiveness” to prevent rate hikes after a single accident.

Final Tips to Save Money on Auto Insurance

Even after you find the insurer and policy of your dreams, there are even more savings tips out there. You might get a discount for signing up for autopay or paying in full instead of monthly. If your insurer offers a telematics program that tracks your driving in exchange for a discount, why not take advantage? And, your company may be your way into group or employer discounts.

But most importantly, don’t think you’re stuck paying an unaffordable price. Reevaluate your policy every six to 12 months to see if anything has changed for you. Then, do a quick comparison shop to see if changing insurers could save you money.