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Cheap Car Insurance: How to Lower Your Premium Without Sacrificing Important Coverage

Eight ways to pay less for car insurance, ranked by how much protection each one costs you, with worked examples for deductibles and older cars.

By
Help Insurance Editorial Team
Published
Updated
Reading time
5 min read

Key takeaways

  • The safest savings come from comparing companies, claiming discounts and avoiding installment fees. None of them reduces your coverage.
  • Raising a deductible lowers your premium, but only makes sense if you could pay the higher amount tomorrow.
  • Dropping collision and comprehensive can be reasonable for a low-value car you own outright.
  • Cutting liability limits or uninsured motorist coverage saves the least relative to the risk it adds.
In this guide
  1. Every option at a glance
  2. 1. Compare companies
  3. 2. Ask about discounts
  4. 3. Watch the fees
  5. 4. Raise your deductibles carefully
  6. 5. Consider a usage-based program
  7. 6. Rethink collision and comprehensive on an older car
  8. 7. Factor insurance into your next car
  9. 8. Look after your credit, where it is used
  10. What not to cut
  11. If you cannot afford the minimum
  12. The bottom line
  13. Frequently asked questions
  14. Sources

The reliable way to get cheaper car insurance is to cut cost in the places that do not cut protection first, and to touch your core coverage last. Some savings are free. Others quietly move risk from the insurer to you.

This guide ranks the options in that order.

Every option at a glance

Move What you give up Risk to you
Compare quotes from several companies An hour of your time None
Claim every discount you qualify for A few questions to your insurer None
Pay in full and avoid fees Cash flow None
Raise your deductibles More out of pocket per claim Low, if you have the savings
Join a usage-based program Driving data. The price can also rise in some programs Low to moderate
Drop collision and comprehensive on a low-value car The insurer no longer pays for your car Moderate
Lower your liability limits Protection if you injure someone or damage property High
Drop uninsured motorist coverage Protection from drivers with no insurance High

1. Compare companies

Insurers weigh the same facts differently, so the same driver with the same coverage can be offered very different prices. Comparing is the only saving that can be large and costs you no protection at all. The key is to compare identical coverage. Our guide to car insurance quotes has a checklist.

Good moments to compare: when your renewal price jumps, after a move, when you change cars and when an old accident or ticket ages off your record.

2. Ask about discounts

Discounts differ by company and state, and insurers do not always apply them automatically. Common ones include:

  • Multi-policy, for insuring your car and home or renters policy with the same company
  • Multi-car, for more than one vehicle on a policy
  • Safe driver, for a record free of accidents and violations
  • Good student, for young drivers with strong grades
  • Defensive driving course, where the state or insurer recognizes one
  • Low mileage, if you drive less than average
  • Vehicle safety and anti-theft equipment
  • Paperless billing, automatic payment or paying in full

Ask your insurer for its full list. A discount is only a saving if the final price is lower than a competitor's, so compare the totals.

3. Watch the fees

Paying monthly often adds an installment fee to each payment. If you can pay for the full term at once, you avoid those fees, and many companies add a discount. Check the price for both a six-month and a twelve-month term.

4. Raise your deductibles carefully

A higher deductible on collision or comprehensive lowers the premium, because you take on more of each claim. The question is whether the saving is worth the extra exposure.

Example

Suppose your insurer tells you that moving your collision deductible from $500 to $1,000 saves $90 a year. You would be accepting $500 more risk per claim to save $90 a year, so it takes more than five claim-free years to come out ahead. The $90 is an illustration. Ask your insurer for the real figure, because the saving varies widely.

Two rules keep this safe. Choose a deductible you could pay tomorrow without borrowing. And if you have a loan or lease, check whether the lender sets a maximum deductible.

5. Consider a usage-based program

Many insurers offer programs that track how you drive, through a phone app or a device, and price accordingly. The NAIC lists the use of telematics among the factors that affect what drivers pay 1. These programs tend to favor people who drive few miles, brake gently and avoid late-night trips.

Before enrolling, find out exactly what is recorded, whether the data can raise your price as well as lower it, and how the information is stored and shared.

6. Rethink collision and comprehensive on an older car

These two coverages pay to repair or replace your own car, and the most they will pay is tied to what the car is worth 2. As a car ages, the possible payout shrinks while the premium may not shrink as fast. Nationally, the two together averaged about $800 a year in 2024 1.

A simple test:

  1. Look up your car's current market value.
  2. Subtract your deductible. That is the most you could receive.
  3. Compare the result with what you pay each year for collision and comprehensive.

Example

Your car is worth $4,000 and your deductible is $1,000, so the most a claim could pay is $3,000. If the two coverages cost you $750 a year, you are paying a quarter of the maximum payout every year. If you could replace the car from savings, dropping them may be reasonable. If losing the car would leave you unable to get to work, keeping them may be worth it.

You cannot drop them while a lender or leasing company requires them 2. And you do not have to drop both. Comprehensive is usually the cheaper of the two and covers theft and weather. See collision and comprehensive for what each one does.

7. Factor insurance into your next car

The vehicle itself moves the price. The Texas Department of Insurance notes that collision and comprehensive rates are highest for luxury, high-performance and sports cars 3. Before you buy, ask for quotes on the specific models you are considering.

8. Look after your credit, where it is used

In most states, insurers may use a credit-based insurance score as one pricing factor 4. Paying bills on time and keeping balances low can help over time. Some states restrict or prohibit this practice, so its effect depends on where you live.

What not to cut

Liability limits. Lowering them saves relatively little and exposes your savings and future income if you cause a serious crash. See liability car insurance.

Uninsured and underinsured motorist coverage. The Insurance Research Council estimates that 15.4 percent of drivers were uninsured in 2023 and a further 18.0 percent were underinsured 5. Together that is about one driver in three. This coverage is what pays for your injuries when one of them hits you.

If you cannot afford the minimum

Some states run programs for drivers with low incomes. California, for example, has a Low Cost Automobile Insurance Program for people who cannot afford standard liability insurance 6. Your state insurance department can tell you what is available where you live.

The bottom line

Work down the list in order. Compare, claim discounts and trim fees first. Adjust deductibles and physical damage coverage on older cars with the numbers in front of you. Leave liability and uninsured motorist coverage for last, and ideally leave them alone. For what to check before choosing the lowest price, see cheapest car insurance, or return to the main car insurance guide.

Frequently asked questions

What is the fastest way to get cheaper car insurance?
Compare quotes for the same coverage from several companies. Prices for the same driver vary between insurers, and switching does not require you to give up any protection.
Does a higher deductible always save money?
It lowers the premium, but whether it saves money overall depends on how often you claim. Ask your insurer for the exact premium at each deductible and work out how many claim-free years it takes for the savings to cover the extra amount you would pay after a loss.
Should I drop full coverage on an older car?
Consider it when the most the insurer could pay, which is the car's value minus your deductible, is small compared with what collision and comprehensive cost each year, and you could afford to replace the car yourself. If you have a loan or lease, the lender will generally require you to keep both.
Do usage-based insurance programs really lower rates?
They can for people who drive few miles and avoid hard braking, late-night driving and phone use. Some programs can also raise your price based on the data, and all of them involve sharing driving information, so read the terms first.
Is the state minimum the cheapest option?
It is usually the lowest premium, but it leaves you personally responsible for any damage above low limits and does nothing for your own car. For many drivers the extra cost of higher liability limits is small compared with the protection.

Sources

Numbers in the text point to these publications. Links open the original source.

  1. National Association of Insurance Commissioners (NAIC). 2024 Auto Insurance Database Average Premium Supplement (published September 2026)
  2. Texas Department of Insurance. Auto insurance guide
  3. Texas Department of Insurance. Shopping smart: Tips for buying auto and home insurance
  4. National Association of Insurance Commissioners (NAIC). Credit-Based Insurance Scores
  5. Insurance Research Council (IRC). Uninsured and Underinsured Motorists: 2017-2023, news release of February 20, 2025
  6. California Department of Motor Vehicles. Insurance Requirements

Back to the main car insurance guide

This guide is general educational information, not insurance, legal or financial advice. Insurance rules and prices vary by state, company and personal circumstances. Confirm anything important with your state insurance department or a licensed professional. Read the full disclaimer.