It appears that American consumers have been spending a little more on everything lately. On auto insurance, they are spending a lot.
Auto insurance premiums increased by nearly two-thirds from April 2020 to April 2026, according to federal data. The average American motorist will pay $2,638 for full-coverage insurance in 2025, Bankrate reports. Thankfully, premiums have leveled off over the past year.
Insurance premiums are rising because cars and trucks have become much more expensive: They cost more to repair and replace.
Serious car accidents increased in the pandemic years, as did medical costs, sending premiums even higher.
“People’s driving behavior has become more risky during the pandemic,” said Matt Brannan, senior economic analyst at Insurify.
Luckily, there are several easy ways to lower your premiums – and some difficult ones. Here are 10 tips from the experts.
Shop for the best car insurance price
Finding a new insurance company takes time, but switching can lower your annual premiums dramatically.
Despite the endless barrage of TV commercials, some insurers cut better deals. An analysis by Bankrate found a swing of more than $1,000 between the cheapest and most expensive annual full-coverage premiums among the largest companies. Here are some averages:
- USAA: $2,059
- Geico: $2,167
- Progressive: $2,190
- State Farm: $2,686
- Allstate: $3,355
Insurers use different formulas to calculate premiums, usually taking into account your age, location, driving record and credit score, among other items.
Bankrate, Insurify and others offer online tools to compare quotes.
“I would say that comparing car insurance rates is the lowest-effort, high-reward way people can save on car insurance costs,” Brannon said.
You should also consider working with an independent insurance agent, said Keith Barry, senior auto reporter for Consumer Reports. An independent agent represents one insurer rather than several.
“Working with an independent broker can sometimes be the key to some hidden savings,” he said. “There are some top-rated insurers that work only with independent brokers.”
Increase your deductible amount
It’s a quick, easy and valuable solution, although it sounds scary: Increase your deductible, the cash amount you pay before your insurance kicks in.
Many policies come with a $500 deductible. According to Consumer Reports, doubling it to $1,000 could reduce annual premiums by 20% to 25%.
Experts say increasing the deductible amount is logical, as most motorists rarely file claims.
“As long as you’re not facing an accident with your deductible every year, you’ll be ahead,” Barry said.
Drop collision and comprehensive coverage
Are you running out of your collision coverage? This seems like another risky move. And this is if you have a really valuable car.
Collision insurance covers the damage caused to your car if you get into an accident. Covers comprehensive non-collision damage.
Experts say drivers should consider giving up both for a used car with declining value.
A general rule of thumb in the insurance industry says that if your annual premium is more than 10% of the vehicle’s value, you should consider collision termination and comprehensive coverage.
Reason: If your car is damaged you may have to pay more than the coverage you get from the insurance company.
“If your car is worth $3,000 and you have a $1,000 deductible, the maximum you’ll get for it is $2,000,” said Rod Bhatt, insurance analyst at LendingTree.
take a defensive driving course
Some insurers will give you a discount if you take an approved safe driving course.
For example, in New York, motorists can get a 10% discount on auto insurance if they take a state-approved course, which costs about $25, according to Consumer Reports. You can repeat this every three years.
“The rebate could be a little more than $100 per year,” Barry said. “But it depends on the state, and it depends on the insurer.”
look for discounts
Auto insurers typically offer a range of potential discounts. You may be able to reduce your premium in the following ways:
- insuring multiple vehicles
- Bundling multiple policies from the same insurer
- being a good student
- serving in the army
- drive fewer miles in a year
- Owning a car with advanced safety features
- becoming a safe driver
- Be loyal to your insurance company
- Paying your entire premium upfront
- Using Autopay for Your Premium
Insurers apply some discounts automatically. For others you will have to ask.
Consider a Safe-Driving App
One way to save money on car insurance is to enroll in a driver monitoring program.
According to Consumer Reports, the developing technology uses an app, plug-in device or electronic tag to monitor driving. The program measures speed, braking, and your tendency to drive and text, among other factors.
“If you’re a good driver, you can save 10% to 20%, sometimes 30%,” Bhatt said. “It varies by company. However, you have to read the fine print. Some companies, if you drive poorly, they will raise your rates.”
And there are privacy concerns, too.
Work on your credit score
Insurers often consider credit when setting insurance premiums. Drivers with weak credit pay more, although some states prevent insurers from using credit as a factor.
Good credit doesn’t happen overnight, but increasing your score can lead to lower premiums over time.
“Paying off debt and avoiding late payments over time will position you well for lower insurance rates,” Bhatt said.
become a better driver
Maintaining a clean driving record is a great way to lower your premiums.
This means avoiding accidents that could increase your premiums. The costlier ones include speeding tickets, accidents caused by your fault, and drunken driving convictions.
“Generally, a safe driving record is the most important factor in one’s auto insurance,” Brannon said.
“The biggest factors in serious crashes are speed, impairment and distraction,” Bhatt said. “And these are things you can control.”
buy a cheap car
The last time you bought a new car you probably noticed the impact on your pocketbook: the more valuable the car, the more you’ll pay to insure it.
Insurance premiums are lower on lower priced vehicles because they generally cost less to repair and replace.
Luxury cars and “performance” cars, which have powerful engines, cost more to insure.
“Depending on what type of car you drive, you can save several hundreds of dollars per year,” Barry said.
Review before upgrading
Experts recommend taking a close look at your insurance policy every six months. Make sure you’re not paying for coverage you don’t need, or missing out on potential savings.
You should also review your policy after a major life change: Step one. a new job. Changes in your commute. Marriage or divorce. Adding or losing drivers to your home. Retirement.
“Any of those times is a time to check your insurance policy,” Barry said. “Those are things that can change your premiums.”