10 Ways to Save Money on Car Insurance in 2026 (Data)

The average American leaves $284 per year on the table by not switching car insurance carriers [1]. That's money lost to inertia, not loyalty.

And the problem is getting worse. Car insurance premiums rose 17.8% between 2023 and 2024, according to the Bureau of Labor Statistics [2]. The national average for full coverage now sits at $1,803 per year ($150 per month), based on NAIC data analyzed by QuoteFii [3][4].

Say you're paying $200 a month and haven't shopped in two years. That's $600 per year more than the national average. Even half of that gap is real money.

The good news: most of the biggest savings don't require changing your coverage or driving habits. Below are 10 ways to pay less for car insurance in 2026, starting with the one that saves drivers the most.

Already know you're overpaying? Compare quotes from top carriers in about 2 minutes. It's free, with no obligation.

1. Compare Quotes From Multiple Carriers

Drivers who compare quotes and switch carriers save a median of $461 per year, according to a Consumer Reports survey of more than 40,000 drivers [5]. This is the single most effective way to save money on car insurance.

The reason is simple: every insurer uses its own formula for calculating premiums. The same driver, same car, same coverage can get quotes that differ by hundreds of dollars. The only way to know if you're overpaying is to compare.

You don't need to switch every year. But if you haven't compared in 12 months or more, the odds are strong that a better rate exists. Here's a step-by-step guide to comparing quotes effectively, or you can compare quotes from top carriers right now.

2. Raise Your Deductible (When the Math Works)

Increasing your deductible from $500 to $1,000 typically saves 8% to 10% on the collision and comprehensive portion of your premium [6]. That's roughly $72 to $120 per year on an average policy. Going from $200 to $1,000 can save 40% or more [6].

The trade-off: you pay more out of pocket if you file a claim. So this strategy makes sense when your emergency fund can cover the higher deductible comfortably. If you'd struggle to pay $1,000 out of pocket after an accident, keep your deductible where it is.

For a deeper breakdown of the math, including when each deductible level makes sense, see our deductible comparison guide.

3. Improve Your Credit Score

A credit-based insurance score is a numerical rating that insurers use to predict how likely you are to file a claim, based on factors in your credit history. In 46 states plus D.C., insurers use these scores when setting your rate, and the gap is massive.

Drivers with excellent credit pay an average of $120 per month. Drivers with poor credit pay $212 per month for the same coverage [7]. That's a $92 per month difference, or $1,104 per year.

You don't need perfect credit to benefit. Even moving from "poor" to "fair" can produce a meaningful rate drop. If your credit has improved since you last shopped for insurance, comparing quotes could reveal a lower rate immediately. See our credit score impact data for full benchmarks.

4. Bundle Your Policies

Combining your auto insurance with homeowners or renters insurance from the same carrier typically saves 5% to 25% on your premiums [8]. Some insurers extend bundling discounts to other policy types (life, umbrella, motorcycle).

This is one of the easiest savings to claim. If you already have renters or homeowners insurance, ask your auto insurer about a multi-policy discount, or check whether your home insurer offers a better auto rate than your current carrier.

5. Ask About Every Available Discount

Most insurers offer a dozen or more discounts, but they don't always apply them automatically. You often have to ask. The most common ones:

• Safe driver / accident-free: Up to 10% off for a clean driving record [8]
• Defensive driving course: 5% to 15% off, and at least 34 states require insurers to offer this discount [9]
• Good student: 10% to 25% off for students with a B average or better [9]
• Low mileage: Varies, but drivers under 7,500 miles per year often qualify [6]
• Safety features: Up to 30% off for vehicles with anti-theft devices, airbags, and advanced safety tech [8]

Say you stack a safe driver discount (10%), a defensive driving course (10%), and a safety features discount (10%). On a $150 per month base rate, those savings could add up to roughly $540 per year.

For a full list of discounts and a 5-minute policy audit checklist, see our car insurance discounts guide.

6. Drop Coverage You Don't Need

If you drive an older car, you may be paying for coverage that costs more than it's worth. A widely used rule of thumb: if your annual collision and comprehensive premium equals 10% or more of your car's current value, it's time to reconsider those coverages [6].

For example, if your car is worth $5,000 and you're paying $600 per year for collision and comprehensive, that $600 is 12% of the car's value. Dropping those coverages and relying on your emergency fund could save you that full amount each year.

This doesn't mean you should drop liability coverage. That protects you if you cause an accident, and every state except New Hampshire requires it. See our state requirements data for your state's minimums.

7. Try Usage-Based or Pay-Per-Mile Insurance

Usage-based insurance (UBI) is a pricing model where your premium is calculated based on your actual driving behavior rather than broad demographic factors. If you don't drive much, UBI or pay-per-mile programs could lower your rate. These programs use a device or app to track your driving habits (mileage, braking, speed) and adjust your premium accordingly.

The average monitoring discount is about 7% [1]. That's modest. But pay-per-mile programs can save significantly more for drivers who put fewer than 7,500 miles on their car each year.

One thing to know: there's a privacy trade-off. Research from UC Berkeley and the FTC estimated the average driver values their driving privacy at about $93 per year [1]. Whether the savings outweigh that is a personal call.

8. Re-Shop After Major Life Changes

Your insurance rate is based on a snapshot of your life at the time you bought the policy. When that snapshot changes, your rate should too. But your insurer won't always adjust it automatically.

Events that often trigger rate changes:

• Moving to a new state (rates vary dramatically by location; see our state cost data)
• Turning 25 (rates typically drop significantly at this age)
• Getting married (married drivers often pay less)
• Paying off a car loan (you may no longer need full coverage)
• Starting to work from home (lower mileage = lower risk)

If any of these apply to you in the last year or two, it's worth comparing fresh quotes. You might find a rate that reflects your current situation, not the one from two years ago.

9. Check What You Should Actually Be Paying

Most articles tell you to "save money" without telling you what a reasonable rate looks like. Here are the benchmarks, according to QuoteFii's analysis of NAIC and BLS data:

• National average (full coverage): $1,803 per year, or $150 per month [3][4]
• National average (minimum coverage): $866 per year, or $72 per month [3][4]
• By age: Drivers under 25 pay about $297 per month; drivers 25 to 64 pay about $150 per month [10]
• By state: Ranges from $101 per month in Vermont to $280 per month in Nevada [11]

If your rate is significantly above the average for your age and state, that's a strong signal you're overpaying. See our national averages, rates by state, and rates by age pages for full tables.

Not sure where you stand? Our full guide on how to tell if you're paying too much walks through the benchmarking process step by step.

10. Pay Your Premium Annually

This one takes 5 minutes and saves 5% to 10% on most policies [8]. Insurers charge a fee for monthly billing, so paying your full premium upfront (every 6 or 12 months) eliminates that cost.

On a $1,803 annual premium, a 5% savings is about $90. Not life-changing on its own, but combined with other strategies on this list, it adds up.

Frequently Asked Questions

How much can you save by switching car insurance?

The median savings for drivers who compare quotes and switch is $461 per year, based on a Consumer Reports survey of more than 40,000 drivers [5]. Individual savings vary based on your profile, location, and how long it's been since you last shopped.

Why does my car insurance keep going up even with no accidents?

Insurance rates are driven partly by market-wide factors you can't control: rising repair costs, more expensive vehicles, and increased claim severity. The BLS reports that motor vehicle insurance prices rose 17.8% between 2023 and 2024 alone [2]. Even safe drivers are affected. The best response is to compare quotes regularly. See why car insurance is so expensive for a deeper look.

Does credit score really affect car insurance that much?

Yes. In most states, drivers with poor credit pay roughly $193 more per month than drivers with excellent credit for the same coverage [7]. That's over $2,300 per year. California, Hawaii, Massachusetts, and Michigan ban credit-based insurance scoring.

Is it worth switching car insurance every year?

You don't need to switch every year, but you should compare at least once a year. Insurers count on customers staying put. Research shows the average driver forgoes $284 per year in savings by not shopping [1]. If you find a better rate, switch. If your current rate is competitive, stay.

When should I drop full coverage on my car?

A common guideline: when your annual collision and comprehensive premium reaches 10% or more of your vehicle's value, those coverages may cost more than they're worth [6]. At that point, you're better off self-insuring with an emergency fund and keeping only liability.

Start With the Biggest Lever

You don't need to do all 10 of these at once. If you only do one thing, make it this: compare quotes. It's the fastest way to find out if you're overpaying, and the median savings ($461 per year) makes it worth the few minutes it takes.

Compare quotes from top carriers now. Enter your zip code, see rates from multiple carriers, and find out in about 2 minutes whether you could be paying less. It's 100% free with no obligation.

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