How to Lower Your Car Insurance Rate and Save Money

By Justin Yoshizawa and the Mercury Team

Owning a car comes with its fair share of expenses, from gas and repairs to registration fees and auto insurance. While gas prices shift and repairs depend on parts and labor, your car insurance can change based on the type of vehicle you own, your driving record, and where you live.

“You may not be in total control of how much you pay in insurance,” says Justin Yoshizawa, Director, Product Management. “But there are ways to balance your premiums with the coverage you need.” In the guide below, we’ll walk you through how to get cheaper car insurance that balances affordable protection with your lifestyle and budget.

Start With the Biggest Ways to Lower Car Insurance

“The fastest way to lower your car insurance cost isn’t one single change,” Justin Yoshizawa, Director, Product Management, adds. “It’s stacking smart decisions like safe driving, right-sizing coverage, and taking advantage of every discount you qualify for.”

Review Available Auto Insurance Discounts

Some of the most common auto insurance discounts that are worth exploring include:

Bundling policies: Combine your auto insurance with another policy, like homeowners or renters insurance, and you could enjoy big savings. Bundling also makes managing your policies simpler since one insurer handles everything.
Multi-car discounts: Insuring more than one vehicle on the same policy is another easy way to lower your premium, especially for families or households with multiple drivers.
Good driver discounts: If you maintain a clean record with no recent accidents or violations, you can qualify for lower rates and keep those savings year after year.
Good student discounts: Young drivers who keep their grades up can earn a good student discount. Most insurers reward students who maintain a B average (3.0 GPA) or higher, because good academic habits typically reflect responsibility behind the wheel.
Safety feature discounts: Cars with safety and anti-theft features, like anti-lock brakes and alarm systems, are less likely to be involved in accidents or stolen. That means insurers usually pass those savings on to you.

Paying your insurance premium yearly versus monthly can also save you a small percentage on your bill.

Choose a Car That Costs Less to Insure

What you drive can also affect your insurance premiums. Here are some things to consider when purchasing a car:

Sedans, minivans, and small SUVs are typically cheaper to insure than high-performance or specialty vehicles.
Safety features can help lower costs. Cars equipped with automatic emergency braking, lane departure warnings, and anti-lock brakes may qualify for lower premiums.
High-end vehicles usually have higher repair costs and replacement values, increasing overall risk for insurers.
Vehicles with expensive parts, specialized materials, or limited availability can drive up insurance costs due to higher claim payouts.
Faster cars like sports cars are statistically more likely to be involved in accidents, which typically results in higher insurance rates.
Cars that are frequently stolen or lack anti-theft features often come with higher premiums.

Adjust Your Coverage Without Creating Gaps

Here are some smart adjustments you can make to help you lower car insurance without sacrificing coverage:

Raise your deductible: Your deductible is what you pay out of pocket before your insurance kicks in after a claim. Choosing a higher deductible (like $1,000 instead of $500) usually lowers your monthly premium. Just make sure you have enough saved to cover that amount if you ever need to file a claim.
Review your coverage levels: Make sure you’re not paying for more coverage than you need. For example, if you drive an older car that’s worth less than your deductible and premium combined, it might make sense to scale back on comprehensive or collision coverage.
Remove any unused add-ons: Extras on your policy, like roadside assistance or rental car reimbursement, can be helpful, but if you rarely use them, removing one or two could help reduce car insurance costs.

Understand How Credit Can Affect Insurance Rates

Your credit score affects things like loan approvals and interest rates, but it also impacts what you pay for car insurance in many states. Why? Drivers with higher scores are statistically less likely to file claims, so they may qualify for lower premiums. Note that California, Hawaii, Maryland, Massachusetts, Michigan, Oregon, and Utah all currently restrict or prohibit homeowners and car insurance rates based on credit scores.

Compare Quotes Before Your Renewal

Your insurance premium can change from year to year, which is why it’s important to review your policy and shop around before your renewal date. Rates vary widely between insurers, and even small life changes can affect what you pay.

Review your current policy: Take a close look at your coverage limits, deductibles, and any add-ons to make sure they still fit your needs and budget.
Compare quotes from multiple insurers: Getting quotes from several providers can help you spot better pricing or more competitive coverage options.
Re-shop after major life changes: Moving, buying a new car, adding or removing a driver, or changes in your driving habits can all impact your rate.
Check for new discounts: You may qualify for new savings, such as safe driving programs, bundling, or loyalty perks.
Avoid auto-renewing without checking: Letting your policy roll over automatically could mean missing out on potential savings elsewhere.

How to Get Cheaper Car Insurance Without Sacrificing Protection

Lowering your car insurance premium doesn’t mean choosing the bare minimum coverage. The goal is to reduce car insurance costs that are unnecessary while keeping enough protection in place to avoid major out-of-pocket expenses after an accident.

Focus on value, not just price: The cheapest policy isn’t always the best. Look for coverage that protects your finances in a worst-case scenario. Adjust your deductibles strategically: Just make sure you can comfortably afford that amount if you need to file a claim.
Right-size your coverage: Keep strong liability limits, but consider dropping or adjusting comprehensive and collision coverage on older, lower-value vehicles.
Avoid gaps in protection: Skimping on coverage like uninsured/underinsured motorist protection can lead to high costs if you’re in an accident with the wrong driver.

Why Choose Mercury Insurance for Savings

Finding ways to lower car insurance shouldn’t be complicated. Mercury makes it easy to save money and stay protected with affordable coverage, personalized support, and smart discounts that fit your lifestyle. Mercury offers:

Affordable coverage that fits your life without cutting corners on protection
Service that feels personal, whether you like working with a local agent or prefer managing everything online
Experience you can trust with decades of proven reliability and top industry ratings

“There’s no universal formula to save on car insurance,” says Justin Yoshizawa, Director of Product Management, State, at Mercury Insurance. “It’s about finding the right mix of coverage, discounts, and good driving habits. Our job is to make that easy and help drivers get the best value possible.”

Save on Car Insurance with Mercury

Car insurance is a necessary part of driving, but that doesn’t mean it has to strain your budget. Taking advantage of lower car insurance by finding discounts, maintaining good driving habits, and reviewing your coverage regularly.

And if you’re looking for a new policy, Mercury makes it easy to find affordable coverage thanks to our wide range of discounts, personalized support, and reliable protection.

Improve Your Driving Habits

How you drive has a big impact on how much you pay for car insurance. The safer you are behind the wheel, the less risk you pose to your insurer, which can lead to lower rates over time. These driving habits include:

Step 1: Maintaining a Clean Driving Record

Follow the speed limit, avoid distractions, and avoid accidents.

Step 2: Minimizing Insurance Claims

Every time you file a claim, it affects your insurance rate. The fewer accidents you have, the fewer claims you’ll need to make.

Step 3: Driving Less to Save More

If you don’t spend much time on the road, you have less risk of accidents, and you might qualify for a low-mileage discount depending on factors like your state and auto insurer.

Step 4: Trying a Mileage Verification Program

Many insurers offer programs to reward safe driving. Programs like MercuryGO track habits ranging from braking to mileage.

FAQs

How can I lower my car insurance premiums?

You can lower car insurance premiums by maintaining a clean driving record, increasing your deductible, taking advantage of discounts, and regularly reviewing your coverage. It’s also smart to compare quotes from multiple insurers to make sure you’re getting the best rate for the coverage you need.

What is the best way to lower my car insurance premium in California?

The most effective ways to lower your premium in California include safe driving, shopping around for quotes, and qualifying for discounts such as good driver or low-mileage programs. Because rates are heavily regulated, comparing insurers and keeping a strong driving record tend to have the biggest impact in California.

Is the cheapest car insurance always the best option?

No, the cheapest car insurance policy may come with low coverage limits, high deductibles, or gaps that leave you financially exposed after an accident. The best option balances affordability with enough protection to cover major expenses and protect your long-term financial security.

Justin Yoshizawa

Director of Product Management at Mercury Insurance

Justin Yoshizawa is Director of Product Management for Mercury Insurance, overseeing California’s personal lines, including auto, homeowners, landlord, and umbrella. He has led major initiatives such as the rollout of the aligned umbrella product across all Mercury territories and serves as a company spokesperson on auto-related topics. Yoshizawa holds dual Bachelor of Science degrees in Applied Mathematics and Applied Statistics from UC Santa Barbara.