How to Save Money on Auto Insurance (2022)

How to Save Money on Auto Insurance (2022)

There is no doubt that adequate auto insurance is a necessity, but you don’t have to pay an arm and a leg to get it. Knowing the factors that determine auto coverage rates and some shopping tips can help you find the most affordable auto insurance for your situation.

In this article, our Home Media review team will highlight some proven strategies for saving money on auto insurance. We also discuss the average cost of car coverage and what comes in the price you pay. If you’re ready to explore your options, check out our ranking of the best car insurance companies to further inform your decision.

Average auto insurance rates

It’s good to know what people typically pay for auto insurance before looking for the best possible rates. According to our cost estimates, the average 35-year-old American driver with good credit and a clean driving record pays about $1,730 per year or $144 per month for full coverage car insurance. When it comes to minimum liability coverage, the national average rate is: $635 per year or $53 a month.

It’s good to know what people typically pay for auto insurance before looking for the best possible rates. According to our cost estimates, the average 35-year-old American driver with good credit and a clean driving record pays about $1,730 per year or $144 per month for full coverage car insurance. When it comes to minimum liability coverage, the national average rate is: $635 per year or $53 a month.

Auto Insurance Companies Ranked by Annual Premium Estimates

Factors Affecting Auto Insurance Rates

There is a lot that goes into the price you pay for auto insurance, and knowing the factors in your control can help you find more affordable rates.

Here’s an overview of some of the key factors insurers consider when determining coverage rates:

  • Place: The cost of auto insurance varies depending on the state and even the city where you live. Drivers in more urban areas often have to deal with higher auto insurance rates, while drivers in more rural areas tend to find more affordable rates.
  • Age: Young drivers and older drivers generally pay higher auto insurance rates because they are considered higher risk. New drivers, regardless of age, will also have higher auto insurance costs.
  • Driving record: If you have a culpable accident, traffic violation or drink driving (DUI)/driving under the influence (DWI) on your record, car insurance will cost more.
  • Credit history: A high credit score is a sign of a reliable and financially responsible driver, leading to lower car insurance costs. A bad credit score can increase your rates, except in California, Hawaii, Massachusetts and Michigan.
  • Vehicle type:: Those who drive new cars and more expensive vehicles tend to pay higher insurance premiums because repairs are more expensive after an accident.
  • Own risk: You can usually choose the amount you pay out of pocket for a covered repair, but a lower deductible means a higher premium.

How much car insurance do you need?

You can choose the level of insurance coverage you want, as long as you meet your state’s minimum requirements. Most states require: liability car insurance for personal injury and property damage, which covers the costs of damage and injury due to accidents caused by you. Some states require underinsured or coverage for uninsured motoristswhich helps to cover medical expenses and repair costs when a defaulting driver is not adequately insured.

Full coverage car insurance including collision protection and comprehensive coverage in addition to liability coverage. Collision insurance covers damage to your vehicle due to collisions with other cars, objects or buildings. Comprehensive insurance protects your car against environmental damage, vandalism and collisions with animals or parked cars.

In our 2022 auto insurance survey, which surveyed 1,000 motorists, two-thirds of respondents said they usually buy full-coverage insurance. If you’re financing a vehicle, lenders typically require you to maintain full coverage until you’ve paid off the loan.

Our tips for saving money on car insurance

When it comes to finding cheap car insurance, comparing quotes from multiple providers is a proven strategy that is hard to beat. But that doesn’t mean it’s the only way to secure lower rates. Here are a few more ways you can lower your auto insurance bill without compromising the quality of vehicle protection:

  • do your homework: Make sure you understand how much coverage is needed in your country and how much is appropriate for your financial situation. Think about what you can realistically afford to pay out of pocket in the event that your vehicle is seriously damaged.
  • Consider local options: The largest insurers may not be able to offer you the lowest rates. Local insurance agents and smaller companies may be the right choice for your needs.
  • Look for discounts: Most providers offer discounts on car insurance. Among the most common policy discount opportunities are multi-vehicle, multi-policy, military, homeowners, good students, customer loyalty, and safe driver discounts. Inquire about discounts from potential new providers, but don’t forget to check with your existing insurer if you also qualify for savings.
  • Try usage-based programs: Many insurance companies offer mileage-based discounts and telematics insurance programs that can save you money. If your annual mileage is less than the average motorist or you consistently practice safe driving habits, tracking your driving through a company-provided app or telematics device can lower your premiums.
  • Increase your deductible: A higher deductible means lower premiums. Keep in mind that if you increase your deductible, you will be responsible for more out-of-pocket costs if you make a claim. You need to find the right balance between risk and savings to make this strategy work for you.
  • Take a driving safety course: Many insurance companies offer discounts to customers who take a safe driving course. Even if you have a clean driving record, taking a defensive driving course can put you in line for significant savings.
  • Install an anti-theft device: Insurers sometimes offer discounts for drivers who install anti-theft devices in their vehicles. Be sure to ask which devices are eligible.
  • Improve your credit score: This is more of a long-term strategy, but you can lower your insurance rates in most states if you check your credit report and then work to steadily improve your credit score.
  • Reduce the opacity if necessary: Comprehensive coverage and collision coverage aren’t as important if you’re driving an older car. Check your coverage regularly to make sure you’re not paying more than you need.

How to save money on car insurance: conclusion

While many factors affect how much you pay for coverage, you can find affordable auto insurance if you know where to look. One of the best ways to save is by: compare car insurance quotes from multiple providers to find the best choice for your needs.

Our car insurance recommendations

When looking for affordable auto insurance, we recommend checking out State Farm, Geico, and USAA.

State farm: editor’s choice

as the largest insurer in the US, State Farm has an excellent reputation in the industry and an excellent track record of customer service. It is typically one of the most affordable insurers and offers particularly low rates for student and teen drivers. State Farm policyholders can save with the company’s Drive Safe & Save™ utility program, which offers discounts for safe driving habits.

Keep reading: State Farm Insurance Review

Geico: affordable for most drivers

In our industry-wide rating, our team recognized Geico as one of the top picks for the average driver. Geico has some of the lowest average rates for a wide range of drivers, and policyholders can take advantage of numerous discounts. The company’s extensive selection of additional coverage options, including mechanical breakdown insurance, is also a major asset.

Keep reading: Geico Insurance Review

USAA: Low Fees for Military

While USAA coverage is limited to military members, veterans, and their immediate families, if you qualify for coverage, it’s an excellent choice. USAA members get the best of both worlds: cheap car insurance and quality customer service. Customer reviews consistently give the company high marks and the insurer scores well in many JD Power customer satisfaction surveys. It is usually the cheapest car insurance for those who qualify.

Keep reading: USAA Insurance Rating

How to Save Money on Auto Insurance: Frequently Asked Questions

Our methodology

Because consumers trust us to provide objective and accurate information, we have developed a comprehensive rating system to formulate our rankings of the best auto insurance companies. We collected data on dozens of auto insurers to rate the companies on a wide variety of ranking factors. The end result was an overall rating for each provider, with the insurers with the most points at the top of the list.

In this article, we’ve selected companies with high overall ratings and cost ratings. Cost classifications are based on auto insurance estimates generated by Quadrant Information Services and discount opportunities.

*Data correct at time of publication.