7 Proven Ways to Lower Your Auto Insurance Premium

Auto insurance is one of those expenses that most drivers accept without question. You get your renewal notice, wince at the number, and pay it. But here's the thing: the average American overpays for auto insurance by hundreds of dollars per year simply because they don't know what levers they can pull to lower their rate.

Whether you're a new driver looking for your first policy or a seasoned motorist tired of watching your premiums creep up, there are concrete, proven strategies to reduce your auto insurance costs. In this guide, we'll walk through seven of the most effective ways to lower your premium — starting today.

1. Bundle Your Insurance Policies

One of the easiest ways to save on auto insurance is to bundle it with other insurance products. Most major carriers offer multi-policy discounts when you combine your auto insurance with homeowners, renters, or even life insurance under the same provider.

These discounts typically range from 5% to 25%, depending on the insurer and the types of policies you bundle. For example, if your auto insurance costs $1,500 per year and you qualify for a 15% bundling discount, that's $225 back in your pocket annually.

Even if you're currently happy with your home insurance provider, it's worth asking them for an auto insurance quote — or asking your auto insurer for a home insurance quote. You might be surprised at how much you can save by consolidating.

2. Take a Defensive Driving Course

Completing a state-approved defensive driving course can earn you a discount of 5% to 15% on your auto insurance premium. These courses teach safe driving techniques, accident avoidance, and traffic law awareness — and many insurers reward drivers who complete them.

Most courses take between 4 and 8 hours and can be completed online at your convenience. The cost is typically $25 to $100, which is easily offset by the insurance savings over a year or two. Some states even allow you to dismiss a traffic ticket by completing a defensive driving course, which can prevent your insurance from going up in the first place.

Check with your insurance provider to confirm which courses they accept and how long the discount lasts. Most companies require you to retake the course every 2 to 3 years to maintain the discount.

3. Raise Your Deductible

Your deductible is the amount you pay out of pocket before your insurance kicks in after a claim. Choosing a higher deductible — say, $1,000 instead of $500 — means you're taking on more financial risk in the event of a claim, but your monthly premium will be significantly lower.

According to industry data, raising your deductible from $500 to $1,000 can reduce your collision and comprehensive premiums by 15% to 40%. That's a substantial saving, especially if you're a safe driver who rarely files claims.

Before raising your deductible, make sure you have enough savings to cover the higher amount in case of an accident. A good rule of thumb: keep at least your deductible amount in an emergency fund so you're not caught off guard.

4. Maintain Good Credit

In most states, your credit score plays a significant role in determining your auto insurance premium. Insurers use a credit-based insurance score to predict the likelihood that you'll file a claim, and studies show a strong correlation between lower credit scores and higher claim frequency.

Drivers with excellent credit typically pay 40% to 60% less for auto insurance compared to those with poor credit. That's a difference of hundreds — sometimes thousands — of dollars per year.

To improve your credit-based insurance score, focus on the fundamentals: pay bills on time, keep credit card balances low, avoid opening unnecessary accounts, and check your credit report regularly for errors. Even small improvements in your credit score can lead to noticeable premium reductions at your next renewal.

Note: California, Hawaii, Massachusetts, and Michigan prohibit insurers from using credit scores to set auto insurance rates. If you live in one of these states, this tip won't apply — but the other six strategies will still help.

5. Compare Quotes from Multiple Carriers

This is arguably the single most impactful thing you can do to lower your auto insurance premium. Insurance rates vary dramatically from carrier to carrier — it's not uncommon to see differences of 50% or more for the exact same coverage from two different companies.

Why? Each insurer uses its own proprietary formula to calculate risk. One company might penalize you heavily for a minor speeding ticket, while another barely notices it. One might offer a steep discount for your vehicle's safety features, while another doesn't factor that in.

The takeaway: shop around every 6 to 12 months, or whenever you have a major life change (new car, new address, marriage, etc.). Services like Apex Coverage Group make this easy by connecting you with multiple carriers at once, so you can compare rates without filling out a dozen separate forms.

6. Take Advantage of Low Mileage Discounts

If you don't drive much, you might qualify for a low mileage discount. The logic is simple: the less you drive, the lower your risk of being in an accident. Many insurers offer discounts for drivers who log fewer than 7,500 to 10,000 miles per year.

Some carriers have also introduced usage-based insurance (UBI) programs that track your driving habits through a mobile app or a device plugged into your car's OBD-II port. These programs monitor factors like mileage, speed, braking patterns, and time of day you drive. If you're a safe, low-mileage driver, UBI programs can save you 10% to 40% on your premium.

If you work from home, are retired, or use public transportation for your commute, ask your insurer about low mileage and pay-per-mile options. You could be leaving significant savings on the table.

7. Ask About Every Available Discount

Insurance companies offer a surprisingly long list of discounts, but they don't always volunteer this information. You often have to ask. Here are some common discounts you might qualify for:

Safe driver discount: For drivers with no accidents or violations over a certain period (typically 3-5 years)
Good student discount: For full-time students under 25 with a B average or higher
Multi-vehicle discount: For insuring two or more vehicles on the same policy
Paperless/autopay discount: For enrolling in electronic billing and automatic payments
Military/veteran discount: For active-duty service members, veterans, and their families
Professional/alumni discount: Some insurers offer group rates through employers or alumni associations
Vehicle safety discount: For cars equipped with anti-theft devices, airbags, anti-lock brakes, or other safety features
Loyalty discount: For staying with the same carrier for multiple years
Paid-in-full discount: For paying your entire premium upfront instead of monthly

Don't assume your insurer has applied every discount you're eligible for. Call them, go through the list, and make sure you're getting every dollar of savings available to you. If they can't match what competitors are offering, it might be time to switch.

The Bottom Line

Lowering your auto insurance premium doesn't require sacrificing coverage. By bundling policies, completing a defensive driving course, raising your deductible, maintaining good credit, comparing quotes, leveraging low mileage discounts, and asking about every available discount, most drivers can save $300 to $800+ per year.

The most important step is also the simplest: compare quotes from multiple carriers. Insurance is a competitive market, and companies are constantly adjusting their rates. What was the cheapest option two years ago might not be the cheapest today.

If you haven't compared rates recently, now is the time. A few minutes of your time could mean hundreds of dollars in savings.

Related articles: