10 Ways to Reduce Your Auto Insurance Rate

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Updated: 27 July 2023
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Insuranceopedia Staff
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Key Takeaways

  • Car insurance is a necessity, but it doesn’t need to be a costly one. These 10 proven methods will help you reduce your auto insurance rate.

No one wants to pay more than they have to for auto insurance, but everyone wants the best coverage possible for their money. Keep these ten factors in mind when comparing quotes to make sure you get the best value and coverage on your auto insurance policy.

1. Keep Your Driving Record Clean

Insurance companies consider violations and accidents indicators of high risk. If you’ve got a record of speeding tickets and other driving offenses, insurers will take this as evidence of your bad driving habits and increase your premiums accordingly. In fact, if you’ve been convicted of a serious violation, such as driving under the influence of alcohol (DUI), your premiums will hit the roof. Plus, your insurance company may refuse to insure you and others may not want to take the risk either (see A Look at Uninsurable Risk to learn more).

On the other hand, if you keep your driving record clean for three years, your premiums should go down. Now, this doesn’t mean that you can just go crazy again because insurance keep their own records as well. If you get another ticket or have another accident, your rates will be even higher the second time around.

The good news is, most insurance companies won’t penalize you for an accident that wasn’t your fault. But some do, so check before you buy.

2. Own a Less Expensive Vehicle

The general rule of thumb is: the less expensive the car, the less expensive it is to insure. Of course, exceptions apply for certain cars, such as sporty models or imports. These cars have to be serviced at dealerships or have parts replacement parts ordered from overseas factories. So, if you want to pay less for insurance, get a car that is easily serviceable in your area. Buying a luxury vehicle will mean paying higher premiums.

3. Buy a Used Vehicle

The repair costs of an older vehicle are around the same as the costs of repairing a newer one, but older vehicles are often written off when they get in a serious accident. In such cases, the costs to fix an old vehicle are higher than the vehicle’s worth.

The actual cash value (ACV) on older vehicles is lower, so even if you are in an accident that totals it, insurance companies pay out less. Newer cars are treated differently. They usually get repaired and need much higher coverage than older vehicles, which increases premiums (see Insurance Options for Your Vintage Car for one exception).

4. Buy a Vehicle with Safety Features

Insurance companies do consider the safety features available on the particular model you drive. Driving a safer vehicle lowers the chances of a driver getting into an accident and decreases the likelihood of anyone becoming injured. If your vehicle has anti-theft devices, air bags, automatic seat belts, anti-lock brakes, or daytime running lights, your premiums will probably be lower.

Other features that rate well with insurance companies include rear-view cameras, blind spot detectors, tire-pressure monitoring systems, vehicle recovery systems, and emergency response systems. Certain vehicle models also have a superior safety record, which insurers will likely take into account.

5. Buy A Larger Vehicle

Larger vehicles are safer and win you lower insurance rates. But avoid those with large engines. Choose V4 or V6 engines, as opposed to V8, for lower rates. If you’re worried about the environmental impact of driving an SUV, opt for a hybrid or electric model.

6. Watch Your Credit

Laws vary state to state, and some still allow an auto insurance company to factor in your credit rating when calculating your insurance premiums. Some ask for your social security number when you apply and send it to the credit bureau. If you have bad credit, it can substantially increase your premiums.

Even if you have good credit, this can be a concern. Inquiries show on your credit file, and multiple inquiries may trigger a red flag on your credit report. Either way, research the company’s policy, and avoid ones that require a credit check (learn more about How Your Credit Score Affects Your Insurance Rates).

7. Reduce Your Mileage

Reducing your mileage not only saves gas, it also reduces auto insurance premiums. Insurance companies charge policyholders who drive more, since it increases the risk of an incident.

Many companies offer usage-based insurance. Responsible drivers may see substantial savings if they don’t rack up too many miles annually (see An Intro to Usage-Based Auto Insurance and Telematics to find out more).

8. Live in a Better Neighborhood

Companies determine rates by predicting the likelihood of a claim and base premiums on the crime rate and number of accidents associated with an area, usually sorted by zip codes. While no one is suggesting that you move for a lower auto insurance rate, if you are moving anyway, choosing a location away from the hustle and bustle can save you money.

For this reason, people who live in rural areas pay less because of the reduced traffic and lower risk of accidents or theft. If moving to the country is impossible or undesirable, consider a safer area of the city with a low crime rate. Densely populated urban areas logically have more crime and accidents, and vehicles cost more to repair in some areas than others. Generally, living in a bigger city costs you more.

Some companies offer discounts if you have secured parking, so ask when you get a quote.

9. Don’t Buy Vehicles Thieves Steal

Some cars are magnets for thieves, and owning one can increase your rates. In fact, vehicle theft is not as unusual as you may think. The FBI reports that a vehicle is stolen every 28.8 seconds in the United States, and insurance companies keep close tabs on which vehicles are the most enticing to thieves.

Surprisingly, the most stolen vehicles aren’t high-end luxury models. The bigger targets are those that are easily stripped for parts. According to the National Insurance Crime Bureau, these include the Honda Accord and Civic, pickup trucks, and the Toyota Corolla and Camry, among others. If you buy a car that thieves prefer, you will pay more for auto insurance (for a related discussion, see 9 Ways to Keep Your Car From Being Stolen).

10. Get Married

Your marital status factors into your auto insurance rate. Married people tend to have fewer accidents than single people. Consequently, while it might not be the best reason to tie the knot, your insurance premiums could drop by almost half if you decide to wed.


As you can see, insurance companies take into account a lot of nuances when calculating your auto insurance rate. Companies offer many discounts, and they don’t always broadcast them so it pays to ask.

The insurance market is becoming highly competitive. By taking the time to find a policy that suits your needs and your budget, you could see substantial savings (for more advice, see Experts Share Top Tips for Saving on Auto Insurance).

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