Car insurance rates continue to climb in 2025. Is there anything you can do to reduce the amount you spend on car insurance?
Over the past few years, the prices of insurance have gone up. It costs an average of 7.5% more for insurance on your vehicle than it did last year, but that increase is less than it was for 2024 and 2023, which saw 16.5% and 12.0% increases, respectively. If you want to lower your insurance rates, there are some things you can do; here are some of them.
Shop around for the best rate
Company loyalty is wonderful, but if your insurance company has increased your rates significantly over the past few years, you might consider looking into another company to cover your vehicle. There’s nothing wrong with shopping around to get the best rates, but ensure you’re getting the same coverage when you compare them. There are some companies that will provide you with rates from several companies compared together, giving you the savings you need along with the right coverage for your vehicle.
What should you do when buying a car?
Part of your car shopping experience is understanding how much you’ll spend on car insurance for that vehicle. Before you buy your next vehicle, compare the insurance costs and find the savings you’re looking for. It’s possible the sweet spot for you could be an older model vehicle with fewer electronics, or a vehicle with a stellar safety record. These models could provide you with the lowered insurance costs you desire, giving you the savings you need on this necessary expense.
Compare higher deductibles
If you want to lower your costs each month, increase your deductibles. Before you do this, ensure you have at least the amount of the deductible saved as an emergency fund. If you’re in an accident, you will pay that amount out of pocket. Still, going from $200 to $500 could reduce your coverage by 15 to 30 percent, and going to a $1,000 deductible could mean a savings of 40 percent on your premium. These savings could be beneficial to you every month and allow you to keep more of your money.
Reduce coverage where you can
If you have a car payment, you have to carry full-coverage car insurance, but if you own the vehicle outright, that is up to you. Older cars could be dropped to liability coverage only, especially when they are worth less in an accident than they are to you on the road. You can look up the value of your vehicle and learn how much your insurance company will pay if you wreck it. If it’s not worth it, drop your coverage to liability, which means if you’re at fault, the insurance company doesn’t pay.
Bundle your insurances
Most insurance companies offer discounts for customers who buy their insurance for various items from them. This could mean buying your homeowners policy from the same place you have your car covered. This allows you to receive a break on the costs. This reduction can result in significant savings and growth as you become a long-time customer. When shopping around, find out how much savings you’ll get from a multipolicy program.
Your credit history matters
Car insurance doesn’t seem to be something that should require a credit score, but it does. Customers who show a strong history of paying bills on time receive better insurance rates than those with poor credit scores. The insurance company is taking a chance on any customer, and research shows that people who manage their credit well tend to have fewer insurance claims. If you haven’t looked at your credit score recently, you should do so and understand everything that appears on this report.
Get discounts for not driving
It might sound counterintuitive to pay for insurance when you don’t drive often, but driving at all requires insurance. Some companies offer discounts for drivers who drive fewer than the average miles per year. The less you are on the road, the less likely you’ll be in an accident, making you a good candidate for discounted insurance rates. This can also apply to drivers who carpool to work, which means everyone in your carpool group could enjoy savings and discounts, especially if you take turns driving.
Investigate group rates
Some employers offer discount programs associated with specific insurance companies. This means you could get more than your health and dental insurance through your work; you could also get your car insurance and savings as well. Ask your employer and check on groups and clubs that you’re a member of to see if they also offer discounted rates. One of the largest groups in the country is military veterans, who can get discounted rates from some insurance companies or utilize veteran programs for various insurance needs.
Participate in safe driving programs
Some insurance companies will allow you to install a device in your vehicle and track your driving history, and others will offer discounts for driving courses you’ve taken. This is especially true if you want to get coverage for a motorcycle. Ask your insurance company about discounts associated with these programs before spending money on them.
Your car insurance is an expense you have to deal with, but using these tips can help you reduce your costs and help you save some money.
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