Car insurance prices are skyrocketing in 2025, and finding cheap car insurance has become a big question for every driver. According to the Bureau of Labor Statistics, the cost of car insurance in January 2025 increased by 11.8 percent compared to the previous year, and if we look back three years, prices have jumped by 55 percent. But the good news is that with the right information and a few smart steps, you can reduce your car insurance costs. No matter where you are in the United States, these six easy and effective ways will help you get cheap car insurance. We’ve prepared this guide in a way that is easy to understand and allows you to take action immediately.
Step 1: Decide How Much Car Insurance Coverage You Need
Finding cheap car insurance starts with knowing how much coverage you need. If you choose too little coverage, you could be in trouble in case of an accident. On the other hand, taking more coverage than you need can be a waste of your money. Therefore, it is important to first understand what is the right coverage for you.
- Minimum liability coverage is mandatory in every state, which covers damage or injury to others. But this coverage often does not fully protect your assets, such as home or savings. Therefore, you should decide the limit of liability coverage according to your financial situation.
- Collision coverage and comprehensive coverage are necessary if you want to protect your car from damage. Collision coverage pays for the repair or replacement of your car in an accident, while comprehensive coverage covers damages such as theft, storm, or vandalism. If your car is financed or leased, the lender may make both of these coverages mandatory.
- Choose the coverage according to your budget and needs. For example, if your car is old and its value is low, you can save premium by skipping comprehensive coverage. But if your car is new, it is wise to take full coverage.
For this, look at the insurance rules of your state and make the right balance according to your needs.
Step 2: Choose the Highest Deductible You Can Afford for Car Insurance
An easy way to reduce the premium of car insurance is to increase your deductible. The deductible is the amount you have to pay out of your pocket after an accident, before your insurance company starts paying. The higher the deductible, the lower the premium you will have to pay.
- Suppose, you choose a deductible of $1,000 instead of $500. This can significantly reduce your monthly or annual premium. But make sure that you can pay this amount in an emergency.
- Create an emergency savings account to cover the amount of the deductible. For example, if you have chosen a deductible of $1,000, then keep this amount in your savings account. This will save you money on premiums and be prepared when needed.
- If you drive carefully and avoid accidents, choosing a higher deductible can save you thousands of dollars in the long run.
So, look at your budget and choose the highest deductible you can comfortably afford.
Step 3: Compare Car Insurance Quotes from Multiple Companies
Each insurance company calculates premiums in its own way, and that is why comparison is the best way to find cheap car insurance. Factors such as your driving record, age, marital status, and credit score in some states affect the premium. So, it is important to get quotes from multiple companies and compare them.
- Use online comparison tools. Websites such as MoneyExpert or Insurify help you get quotes from multiple insurers at once. These tools eliminate the need to enter your details repeatedly and give you an easy way to compare prices for similar coverage.
- Some insurers, such as Geico, Progressive, and Esurance, offer direct quotes through their websites or apps. By visiting their websites, you can not only see the price of their policies but also compare quotes from their competitors. Direct insurers sell policies without an agent, which can reduce costs.
- If you want personalized advice, work with captive agents (such as State Farm, Allstate) or independent agents. Captive agents only sell their company policies, while independent agents can help you find cheap car insurance by bringing you quotes from multiple companies.
Get quotes from at least three to five insurers and make sure you’re comparing the same types of coverage. This will help you get the best deal.
Step 4: Maximize Discounts to Lower Your Car Insurance Costs
Car insurance companies offer a variety of discounts that can significantly lower your premium. But these discounts aren’t automatic—you’ll need to ask about them and see which ones you qualify for.
- If you buy your car insurance and home insurance or renters insurance from the same company, you may be able to get a bundling discount. This discount can reduce your total premium by 5 to 25 percent.
- If you drive little, such as less than 10,000 miles per year, a low mileage discount or pay-per-mile insurance may be beneficial. Many companies monitor your driving and offer discounts for low mileage.
- Completing a defensive driving course can provide a 10 to 15 percent discount, especially for young and senior drivers. Companies like State Farm and Progressive offer discounts for such courses.
- If you have a clean driving record, you may get a Good Driver Discount, which reduces your premium by 5 to 25 percent.
- Additionally, you may get additional discounts if you have a high GPA (for students), have served in the military, you set up autopay, or your car has an anti-theft device. Some companies also offer discounts if you pay the entire year premium in one lump sum or choose paperless billing.
Ask your insurance company for a list of all available discounts and see how much money you can save.
Step 5: Avoid Pitfalls When Choosing Cheap Car Insurance
It not a good idea to focus only on price when choosing cheap car insurance. Some cheap policies come with hidden limitations that can cost you later. Therefore, it important to understand the full details of the policy before choosing it.
- Some cheap policies don’t cover permissive drivers, i.e. people you allow to drive your car. Or, they may offer less coverage for these drivers. Make sure your policy includes this coverage, especially if you share your car with friends or family.
- Some policies may reduce coverage when you drive out of state. If you frequently drive in other states, read the policy terms carefully.
- Check the reputation of the insurance company. Check online reviews, surveys like J.D. Power, and customer complaints. A good company will not only offer cheap car insurance, but will also make the claim process easy.
- Read the specifics of the policy. For example, some cheap policies may delay the claim process or add unexpected fees.
So, pay attention to the quality of coverage and the reliability of the company, along with the price.
Step 6: Conduct an Annual Car Insurance Checkup
Your needs and circumstances change over time, so it important to review your car insurance every year. This can help ensure you’re getting the cheapest and best coverage.
- Check your current policy. Are you paying for coverages you no longer need? For example, if your car is old, you may not need comprehensive coverage.
- Get new quotes every year and compare them. Prices in the market keep changing, and you may find a better deal than before. According to MoneyExpert, comparing can save drivers an average of $523 per year.
- Ask your insurance company if you qualify for new discounts. For example, if you recently took a defensive driving course or had an anti-theft device installed in your car, you may get an additional discount.
- If you can find cheaper car insurance with a new company, consider switching. But first, check to see if you’re losing loyalty discounts or bundling discounts from your current company. For example, if you’re getting your home and car insurance from the same company, switching could increase your overall cost.
Take some time each year to review your policy and make changes if needed.
Why Car Insurance Costs Are Skyrocketing in 2025
Why are car insurance prices rising in 2025? There are several reasons for this, and understanding them can help you find cheap car insurance.
- Repair costs are rising due to high-tech features and expensive parts in modern cars. For example, cars with sensors and cameras are much more expensive to repair than older cars.
- Due to increased traffic congestion and changes in driving habits, the number of accidents is increasing. This is causing insurance companies to pay out more claims.
- Vehicle thefts are also on the rise, increasing the risk for insurers. This is a big problem, especially in urban areas.
- The increasing number of storms, floods, and other natural disasters has also increased the cost of claims, which affects your premium.
Despite all this, by following the six steps mentioned above, you can find cheap car insurance and control your expenses.
Conclusion
Finding cheap car insurance in 2025 is not easy, but it is not impossible either. By understanding your coverage needs, choosing a high deductible, comparing quotes from multiple insurers, taking advantage of discounts, you can get cheap car insurance.
