# How to lower your car insurance costs > Source: https://www.coveragecat.com/insurance-types/auto/how-to-lower-car-insurance-premiums > Description: Learn practical strategies to reduce your car insurance premiums without sacrificing coverage. From comparison shopping to discounts, discover how our customers save hundreds annually. > Updated: 2026-08-13 [Car Insurance](/car-insurance) / [Cheapest Car Insurance](/cheapest-car-insurance) / How to lower your car insurance costs It's tempting to just ask " [what's the cheapest insurance I can get](/cheapest-car-insurance) " and do that. Unfortunately that's not always the right way to think about insurance. The purpose of insurance isn't to check a box on the list of "things we must do," it's to protect yourself from bankruptcy. In the case of car insurance, it's to protect you from bankruptcy following a car crash. Insurance companies are in the business of predicting risk. The more of a risk you are, the more you pay for your insurance (also a big factor is how expensive the things you're insuring actually are). Some risks come with a higher "premium penalty" than others. Reducing your risk factors reduces your bills. Here are some ideas about what you can do to reduce your [car insurance](/car-insurance) costs (and the things you can't change). ## What drives car insurance costs up? There are a lot of factors which go into your car insurance premium. That doesn't mean you need to pay attention to all of them. Here are a few factors to pay attention to and a few to skip. ### The biggest impacts **Insurance you don't need** A lot of car insurance policies come with extras you may not need and may not want to pay for. Be sure to check your policy (not just your declaration page), to see what you're paying for. Here are some examples of [additional car insurance coverages](/insurance-types/additional-coverage-options). Learn which coverage you actually need for your financial situation. A lot of people pay a lot of money for comprehensive and collision coverage even though they could easily afford to repair or replace their vehicle in a catastrophe. If you ask your broker for "full coverage" make sure you know what coverage you're buying. You can use our [car insurance calculator to rate your current coverage](https://www.coveragecat.com/blog/car-insurance-calculator-launch) and see where you might be overpaying. **Your credit score** In most states, and for most insurance companies, your credit score (FICO) is considered alongside your driving record and marital status when they assess what kind of risk you might be. "FICO estimates approximately 95% of auto insurers and 85% of homeowners' insurers use credit-based insurance scores in states where it is a legally allowed underwriting or risk classification factor." — [NAIC](https://content.naic.org/cipr-topics/credit-based-insurance-scores) While it takes time to improve your credit score, doing so has many benefits including reducing your insurance premiums. This effort will be most impactful for people with clean driving records but lower credit scores. **Your driving habits** While you can't change your driving record, you can definitely change your driving habits so that you can clear your record and enjoy lower rates as quickly as possible. Certain driving violations have a more expensive toll on your insurance premiums. Here are the factors driving the biggest percentage increases on car insurance premiums. - Add 20-25%: Driving too slowly, speeding in a school zone, cell phone violations, texting while driving, failure to stop at a red light, failure to yield, making an illegal turn, going the wrong way or driving in the wrong lane, following too closely (tailgating), and improper passing. - Add 25-30%: Operating a vehicle without permission, passing a school bus, having an open alcohol container in the car, getting in an at-fault accident, and speeding. - Add 50-70%: Driving with a suspended license, reckless driving, refusal to submit to a chemical test, DUI, racing, and hit and run. - Speeding tickets, at any amount more than 6 mph over the limit, adds 20-30% to your premiums. - Distracted driving adds 20% or more to your premiums. If you had a run of bad luck but you're generally a safe driver, consider an insurer who uses Telematics (the Big Brother device installed in your car to monitor your driving). They might forgive your past bad driving habits sooner than a traditional insurance company who can't monitor what you're doing all the time. **Bundling multiple insurance policies** Insurance companies have sold America on multi-policy discounts thanks to endless commercials from Progressive Insurance on the subject. While it's true you can sometimes get better rates by having all of your policies with one company (homeowners/renters, car, and liability coverage), the reality is sometimes your best prices come by "unbundling." Many smaller, well-priced car insurance companies don't offer other forms of insurance. Sometimes a big company offers great prices for homeowners or liability insurance but charges a lot for car insurance. Don't take your insurance company's word for it – shop around for your policies separately, too. **Drive less** If you don't need to drive your car as much as you currently do, you can save money on your insurance. Some companies offer reduced rates for "leisure" vehicles and some charge extra for long-haul commuters. If you only occasionally use your car, you can even explore pay-per-mile insurance policies. Bonus: your fuel costs will go down, too. Here are some things to consider: - If you commute five days a week and don't drive much on the weekend, changing your commuting habits just one day a week reduces your mileage by up to 20%. Consider carpooling once a week, biking to work once a week, or taking public transit once a week. - Combining your errands into a single trip can really add up. - Try to get your mileage under 7500 per year for maximum benefit (around 20 miles per day). This has the most impact in California where there's a 32% difference in premium costs between people who drive less than 7500 miles per year and those who drive 15000 or more. **Discount eligibility** Car insurance companies offer all kinds of discounts to get you to pick their service or stay with their service. Most of these discounts are provided by the well-known insurance companies like State Farm, Geico, Allstate, Travelers, and Nationwide. It's important to remember that just because an expensive insurance policy offers you a token discount doesn't mean you're getting best-priced insurance for you. A company may choose not to offer discounts because they've already priced your policy as cheaply as they can. Nonetheless, it's worthing knowing discounts are sometimes available for: - Safe drivers - Drivers who take a defensive driving class (as an adult) - Accident-free drivers - "Safe" and "good" drivers, which may require a monitoring system installed in your car - Low mileage drivers - Special groups - Good students - Students away at college - Military, veteran, and federal employees - Professional and academic organizations - Senior drivers - How much insurance you buy - Multiple cars - Bundled (multi-policy) insurance policies - Loyalty (how long you remain a policyholder) - How you pay for your insurance - Electronic billing - Early policy renewal - Buying / paying online - Prepaying six months or a whole year **Deductibles** [Liability coverage](/insurance-types/liability-car-insurance) (the part of your insurance that's required) doesn't have a deductible, but collision and comprehensive coverage do. So does [Personal Injury Protection](/insurance-types/personal-injury-protection-pip) (PIP). In general, when you choose your deductibles, choose higher ones. Depending on your insurer, there might be something a little unexpected going on with the relationship between [your deductible and your premiums](/insurance-types/collision-coverage#premiums). Our research suggests that if Progressive is your insurer, the sweet spot for lowest premium-deductible ratio is for a $750 deductible (even though you can set it higher). With many websites where you can get an online quote, you may be offered choices like "minimum", "better," and "best" without a lot of description of what goes into those quotes. Be sure you know what they're suggesting you're paying for, especially in terms of how they've set your deductibles. ### Things you can't control Each car insurance company sets their own rates (they vary wildly) There is no standard rate for any driver profile, which means you need to get multiple quotes in order to accurately compare insurance. They all use their own risk models and choose or exclude drivers to include in their insurance pool. **Where you live impacts the cost of your car insurance** Which city you live in definitely impacts how much you pay, but are you going to move to get cheaper car insurance? Probably not. If you're planning to move, are you going to pick where based on how much the car insurance costs? Probably not. Is the insurance company going to mistakenly give you an insurance policy that doesn't apply to the town you live in? Definitely not. Some people try to [skip telling their insurer they've moved](/blog/fraud-doesnt-payout) – that doesn't work out too well. **Your gender affects the cost of your car insurance** Again, no matter how it might impact your cost of car insurance, you're probably not going to change your gender to get cheaper car insurance. However, understanding [how gender affects your insurance premiums](https://www.coveragecat.com/blog/car-insurance-premiums-gender) can help you better evaluate whether you're getting a fair rate. **Your age affects the cost of your car insurance** Again, no matter how it might impact your cost of car insurance, you are as old as you are. And if you make a habit of lying about your age to your acquaintances, just remember that lying about your age when you apply for car insurance is considered insurance fraud. Along with your age, [your car's age also affects your premiums](https://www.coveragecat.com/blog/car-age-premiums) in ways that might surprise you. **Inflation affects the cost of your car insurance** I think we're probably all tired of inflation changing the cost of absolutely everything (at least it seems that way). Car insurance is not immune. Car insurance increased 46% from 2022 to 2024, then fell 6% in 2025. For 2026, the average annual car insurance cost for full coverage is projected to increase by about 1% to $2,158. Your car insurance reflects the cost to replace or repair your vehicle directly. Motor vehicle maintenance and repair rose 4.9% year-over-year through early 2026, and repair costs may continue to climb due to the complexity of modern vehicles and parts availability. ## Frequently Asked Questions ### Q: How much does credit score affect car insurance rates? Drivers with poor credit pay 40% to over 100% more for car insurance than those with excellent credit. [(Finhabits, "How Your Credit Score Affects Your Car Insurance Rate", 2026)](https://www.finhabits.com/how-credit-score-affects-car-insurance-rate/) reports that drivers with poor credit (below 580) pay an average of $2,602 per year for full coverage, while those with excellent credit (750+) pay $1,853. California, Hawaii, Massachusetts, and Michigan ban the use of credit scores in setting car insurance rates. ### Q: Does bundling home and auto insurance really save money? Bundling can save money, but not always. Typical bundle discounts range from 10% to 25%, with some customers saving $800 to $950 annually according to [(Liberty Mutual, "Insurance bundle home and auto", 2020)](https://www.libertymutual.com/bundling). However, smaller specialized car insurance companies sometimes offer better rates than bundled policies from larger insurers. Compare both bundled and separate quotes to find your best price. ### Q: How much can I save by reducing my annual mileage? Reducing your mileage below 7,500 miles per year can result in significant savings, especially in California where there's a 32% difference in premiums between low-mileage and high-mileage drivers. Cutting your commute by just one day per week can reduce your annual mileage by up to 20%, which means fewer miles driven translates directly to lower risk and reduced premiums with most insurers. ### Q: How long do driving violations affect my insurance rates? Most driving violations stay on your record and affect your rates for three to five years, depending on the violation and your state. Minor violations like speeding add 20-30% to premiums, while major violations like DUI or reckless driving can add 50-70%. Safe drivers may benefit from telematics programs that monitor current driving habits rather than past violations. ### Q: What's the best deductible to choose for lower premiums? Higher deductibles reduce your premiums, but the sweet spot varies by insurer. Research suggests that with Progressive, a [$750 deductible offers the best premium-to-deductible ratio](/insurance-types/collision-coverage#premiums). Choose a deductible you can afford to pay out of pocket in case of a claim, and compare how different deductible amounts affect your total annual cost. ---