Factors that impact your cost of car insurance

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How to lower car insurance premiums

Understanding your rate factors may help you best determine how to lower car insurance premiums. However, there are some other strategies you can employ to help you get the best deals.

• Ask about discounts: Most insurance companies offer a range of auto insurance discounts. Some are based on driver behavior, such as student training discounts or safe driving discounts, while others may be based on policy selections or payment behavior, like paperless billing discounts or paid-in-full discounts.
• Bundle your insurance: When you bundle your home and auto insurance policy with the same company, you can typically earn cheaper premiums on both. You may be able to bundle other types of insurance with your auto policy, like condo, renters, boat, life or motorcycle insurance.
• Opt for a higher deductible: When you select a higher deductible, you are assuming more of the financial risk, which allows insurance companies to offer you a lower rate. However, speak with your insurance agent to ensure the higher deductible is worth the decrease and that you aren’t putting yourself in a financially uncomfortable position if you were to have a loss.
• Consider claims carefully: Your car insurance contract or state may require you to report accidents, but this usually doesn’t apply to comprehensive losses. Having several small comprehensive claims can increase the cost of your policy, so paying out-of-pocket for smaller, insignificant claims may help you get cheaper car insurance.
• Add safety and security features: If your vehicle doesn’t have blind spot detection, rear-view cameras, anti-theft devices, alarms, adaptive headlights or anti-lock brakes, your insurance company may offer a discount if you install them. Just be sure to check with your agent before making any changes, as eligibility requirements vary by company.
• Enroll in telematics: Most auto insurers offer a telematics program that allows drivers to earn potential discounts by tracking their driving in real time using a mobile app or plug-in device. In most cases, just signing up earns an automatic discount of 5 to 10 percent, but higher discounts are available if you avoid bad driving habits like hard braking, speeding and phone use. Keep in mind that some of these programs can also send your insurance premium up if you exhibit unsafe behaviors behind the wheel.
• Shop around: It might pay to shop around for car insurance at least once a year to ensure you are paying the best price for your coverage. You may find that you can get better rates by switching carriers, which might be useful information to have before your policy renewal date.

Frequently asked questions

• How does carrying higher state minimum liability limits affect car insurance rates?

  Carrying only the state minimum required liability limits may result in the cheapest car insurance premiums, but it could also put you at a major financial risk. If you are involved in an at-fault accident and the costs exceed your car insurance limits, you will be responsible for paying the excess out of pocket. This is more likely to happen with lower insurance limits. Raising your liability limits typically has a minimal impact on your insurance rates — around a few dollars more each month — while adding collision and comprehensive is usually more expensive. However, both policy options may save you money in the long run if you need to file a claim.

• Can your annual mileage make a difference in car insurance rates?

  Most auto insurance companies consider annual mileage when setting premiums. If you use your car to commute to work or school, insurers may ask how many days a week and how many miles each way you commute to determine your annual mileage. Drivers who use their cars less may qualify for low-mileage or reduced use discounts if they meet certain thresholds of eligibility. Although it might not be possible for most, cutting back your annual mileage is one way to find cheaper car insurance.

• How does marriage affect car insurance premiums?

  Since most insurance companies require spouses and other licensed household members to be included in your car insurance policy, marriage could impact your rates. However, whether your premium increases or decreases is largely dependent on your unique situation. If your spouse has multiple moving violations on their record or drives a higher-risk vehicle, you may see your rates increase. Some insurers offer savings that married policyholders may be able to benefit from, such as multi-car discounts for insuring more than one vehicle.

• How long will you pay higher premiums for a poor driving record?

  When you have been convicted of a moving violation, the increase in your premium may be significant depending on the severity of the infraction. Not only may a surcharge apply to your premium, but you might lose existing good driving discounts. Generally, a speeding ticket or accident will stay on your record from three to five years, whereas a DUI may stay on your record five to 10 years or permanently. However, the length of time a poor driving record will impact your premium depends on both your state’s department of motor vehicle laws and your insurance company.

• Does my education level factor into car insurance rates?

  Your education level is one of the factors that impacts car insurance rates in most states and with most carriers. The higher your education level, the less you typically pay for auto insurance. However, the cost difference can vary by carrier. Rating formulas are proprietary, so it may be difficult to determine which companies use education to determine premiums. If a company does not ask about education, it may not factor it into your final cost. Getting several quotes from different carriers may help you find the best price for your coverage needs and driving profile.

Methodology

Bankrate utilizes Quadrant Information Services to analyze March 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket and single DUI conviction.

Model: To determine cost by vehicle type, we evaluated our base profile with the following vehicles applied: Audi Q5, BMW 330i, Ford F-150, Honda Odyssey, Jeep Wrangler, Nissan Altima, Subaru Outback, Tesla Model 3, Toyota Camry (base), Toyota Prius and Toyota RAV4.

Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.