7 Proven Ways to Lower Your Car Insurance Premium in 2025

Why Your Car Insurance Costs More Than It Should

Most drivers are overpaying for car insurance simply because they have not reviewed their policy in years. Insurance companies count on customer inertia. The truth is, rates vary dramatically between providers, and a few simple changes can save you hundreds annually.

1. Shop Around Every 6-12 Months

The single most effective way to lower your premium is to compare rates from multiple insurers. Insurance companies use different algorithms to calculate risk, which means the same driver can get wildly different quotes.

2. Bundle Your Policies

If you have homeowners or renters insurance, bundling it with your auto insurance can save you 10-25% on both policies. Most major insurers offer multi-policy discounts.

3. Increase Your Deductible

Raising your deductible from $500 to $1,000 can reduce your premium by 15-30%. This strategy works best if you have an emergency fund to cover the higher deductible.

4. Ask About All Available Discounts

Insurance companies offer dozens of discounts that they do not always advertise. Ask about good driver, low mileage, good student, defensive driving, anti-theft, and paperless billing discounts.

5. Maintain a Clean Driving Record

A clean driving record for 3-5 years can dramatically lower your rates. If you have a violation, ask about defensive driving courses to remove surcharges.

6. Review Your Coverage Annually

If you are driving an older car, you might be paying for comprehensive and collision coverage that exceeds the car value. If the cost is more than 10% of your car value, consider dropping them.

7. Improve Your Credit Score

In most states, insurance companies use credit-based insurance scores. Improving your credit by paying bills on time and reducing debt can lead to meaningful savings.