How to Save on Auto Insurance in 2025: Smart Ways to Cut Costs

1. Shop Around for the Best Rates

One of the most effective ways to lower your auto insurance costs is by comparing quotes from multiple insurers. Each company evaluates risk differently, meaning prices for identical coverage can vary widely. According to a recent J.D. Power study, drivers who switched insurers saved an average of $388 per year. Websites like NerdWallet, The Zebra, and Policygenius make it easy to compare rates side by side, helping you find the most affordable option that fits your needs.

2. Bundle Your Insurance Policies

Bundling—combining your auto insurance with other policies like home, renters, or life insurance—can result in substantial savings. Many insurance providers offer multi-policy discounts of up to 25%. If you already have homeowners or renters coverage, ask your insurer about adding your auto policy under the same umbrella. This not only reduces your premium but simplifies billing and customer service, too.

3. Raise Your Deductible

Your deductible is the amount you pay out of pocket before your insurance kicks in. Choosing a higher deductible can significantly reduce your monthly premium. The Insurance Information Institute notes that increasing your deductible from $500 to $1,000 could lower your collision and comprehensive premiums by as much as 15% or more. Just ensure that you have enough savings set aside to cover that higher amount if you need to file a claim.

4. Maintain a Strong Credit Score

A good credit score doesn’t just help with loans—it can also lower your auto insurance rate. Insurers often use credit-based scores to predict a driver’s likelihood of filing claims. Maintaining solid credit signals financial responsibility and can translate to better pricing. Experian recommends checking your credit report regularly, paying bills on time, and disputing any inaccuracies to maintain or improve your score.

5. Try Usage-Based or Pay-Per-Mile Programs

Usage-based insurance (UBI) programs, which rely on telematics devices or smartphone apps, are gaining popularity. These programs monitor driving habits—such as acceleration, braking, mileage, and speed—and reward safe or low-mileage drivers with discounts of up to 30%. Progressive’s Snapshot, Allstate’s Drivewise, and State Farm’s Drive Safe & Save are prime examples of how personalized driving data can lead to lower rates for careful drivers.

6. Ask About Available Discounts

Many drivers miss out on savings simply because they don’t ask. Insurance companies offer numerous discounts—some automatic, others by request. Common ones include:

Safe driver discounts for those with clean records.

Good student discounts for young drivers maintaining a “B” average or higher.

Military and veteran discounts.

Loyalty or full-payment discounts for long-term customers or those who pay premiums upfront.

Taking a few minutes to ask about these options can translate into hundreds of dollars in annual savings.

7. Review and Update Your Coverage Regularly

Your insurance needs can change over time. Reviewing your policy annually—or after major life events such as buying a new car, moving, or getting married—ensures you’re not overpaying for unnecessary coverage. For instance, if you drive an older vehicle, dropping optional coverages like comprehensive or collision might make financial sense. Conversely, adding roadside assistance or gap insurance could be beneficial for newer cars.

8. Reduce How Much You Drive

Driving fewer miles each year lowers your risk of accidents, which insurers reward with lower premiums. Many companies offer low-mileage discounts if you drive below a certain annual threshold—often around 7,500 to 10,000 miles. Consider carpooling, working remotely when possible, or using public transportation to reduce mileage and qualify for these savings.

Common Questions About Auto Insurance Savings

How does my car’s make and model affect insurance costs?

Generally, vehicles that are more expensive to repair or have higher theft rates tend to cost more to insure. Sports cars and luxury models usually come with higher premiums, while vehicles with strong safety records and affordable replacement parts typically cost less to cover.

Can I negotiate my auto insurance rate?

While direct negotiation isn’t standard in the insurance industry, discussing your situation with your insurer can still pay off. Ask about discounts, loyalty rewards, or policy adjustments that could reduce your premium. Being proactive and informed can often lead to unadvertised savings.

What should I do if I can’t afford my premium?

If your premium becomes unaffordable, contact your insurer before missing a payment. Many companies offer flexible payment plans or can suggest ways to reduce your coverage temporarily. Switching to a more budget-friendly insurer or opting for a usage-based program may also help lower costs without losing essential protection.

The Bottom Line

Saving on auto insurance in 2025 is about more than chasing the lowest quote—it’s about optimizing your policy to fit your lifestyle and driving habits. By shopping around, bundling policies, maintaining good credit, and exploring modern usage-based options, you can enjoy quality protection while keeping costs manageable. With a bit of research and a proactive mindset, it’s entirely possible to protect your vehicle and your wallet at the same time.