MW Hate paying so much for car insurance? Now is the time to switch.

Andrew Keshner

More people may be able to find a lower premium today than a year ago. Here's how to do it.

After approximately two years of steep car-insurance premium hikes with few deals in sight, drivers may finally be in luck.

Comparing policy quotes has long been the go-to advice for drivers trying to save money. But in the midst of red-hot inflation, many shoppers couldn't find substantial enough savings to justify the hassle of switching.

That's changing, automobile-insurance experts say. Drivers are finally seeing noticeable differences as industrywide premium increases come down from their eye-watering heights.

Inflation data over the past week showed motor-vehicle insurance costs were up 0.7% from April to May and up 7% from last May. Those were elevated numbers in a report showing the overall cost of living increased 0.1% in May and 2.4% on a yearly basis, according to the Bureau of Labor Statistics. But it's a long way from May 2024, when the consumer-price index showed a more than 20% year-over-year increase in car-insurance premiums.

In other words, it's become a "buyer's market," according to Stephen Crewdson, managing director of insurance intelligence at J.D. Power.

Rate increases are less severe, which means insurers may be offering deals for more customer segments, he said. Companies are spending a lot more on advertising right now, which is also leading to deals, he added. "There's more consumers who can find a lower premium now than, let's say, a year ago," Crewdson said.

Just over 4% of people polled in May by J.D. Power said they had switched their car insurance in the last 30 days. That's approaching the record high of 4.7% last October, and the share of switchers has stayed above 4% in recent months, Crewdson said.

'[T]hings are stabilizing and giving drivers more choices, [but] insurers are still cautious about cutting rates too much right now.'Joshua Damico, Jerry Services Inc.

Joshua Damico, vice president of insurance operations at Jerry Services Inc., whose Jerry app allows drivers to shop for insurance and compare other car-related costs, has seen signs of a shift to a buyer's market.

Florida and Texas are two states in which drivers may start finding more deals, he said. Insurance carriers in both states have struggled to insure against extreme-weather-related damages, but some companies are adjusting. Damico said he has seen "several carriers lowering prices and offering more flexible payment terms."

On the whole, however, tariff uncertainty may be holding back bigger savings for drivers, he added. Tariffs could raise prices on auto parts, and repair costs are an important factor in a premium's price tag. "So while things are stabilizing and giving drivers more choices, insurers are still cautious about cutting rates too much right now," Damico said.

To be clear, car insurance is still a burdensome expense for a lot of people - reflecting the wider reality that many forms of insurance are becoming more costly.

Drivers are paying an average of $2,680 a year for full coverage and just over $800 for minimal coverage, according to Bankrate data as of June. That's up from $2,311 and $640 in June 2024, respectively, Bankrate's data showed.

Are cheaper car-insurance deals now just up the road? It's an open question how tariffs will impact policy prices, said Crewdson. But, if current conditions hold, the emerging buyer's market could endure for "many months still."

'It's worth shopping around basically once a year.'Chuck Bell, Consumer Report

Most drivers who switched insurers in the past five years saved money, with a median yearly savings of $461, according to a Consumer Reports survey. "It's worth shopping around basically once a year," and there's "more incentive when premiums go up dramatically," said Chuck Bell, programs director for advocacy at Consumer Reports.

Shopping smarter, not harder

The best way to get a car-insurance quote: Automobile insurers use several factors to price their premiums, said Bell, including the car's make and model and how frequently it's driven. Their calculation also includes characteristics about the driver, such as driving record and credit history.

Bell and other consumer advocates think credit scores shouldn't play a part. The practice is banned in several states - including California, Michigan and Utah - but it's allowed in most, he noted. People can check their scores with Equifax $(EFX)$, Experian (EXPGY) and TransUnion $(TRU.UK)$ at no cost using sites like AnnualCreditReport.com, he said.

When shopping for quotes, beware of online aggregators that offer a single quote, Bell said. It may not be the best quote and may only be generating a sales lead for an insurance company. The better option is to check directly with insurers by either using an independent agent or finding a website with head-to-head comparisons, he said.

Many car-insurance shoppers last year gathered just over three quotes on average, according to Crewdson, and that could be enough to spot savings. But if a shopper has six or seven quotes and isn't seeing a big price difference, it might not be the right time to change, he said.

Less-conventional ways to save on car insurance - including taking on a higher deductible: Drivers can go further to cut costs even after they find a new provider.

Taking a defensive-driving course is one way to get a discount on car insurance, Bell said. So are "telematics" programs, which allow the insurer to track driving behavior and offer policy discounts in exchange for evidence of safe driving.

Some drivers may be creeped out by the tracking, Bell acknowledged. Still, he views that as a fairer way to assess safe driving than credit history.

Cutting comprehensive and collision coverage might be an option, Bell said, but people should proceed carefully. Collision coverage pays for the damage to a policyholder's car in a crash, while comprehensive coverage pays for damage caused by something other than a crash, like a storm, vandalism or a fallen tree limb. These are different from liability coverage, which Bell said drivers need to keep.

The longer a car is on the road, the more value it loses. It may get to a point where insurance coverage is structured such that it would pay more than the vehicle's value. A post-accident repair may not be worth the cost, and the insurance company will cut a check for a total loss. That's the vehicle's market value minus the deductible and any fees.

After seven or eight years, a vehicle's value may have depreciated to the point where the coverage isn't worth its cost, said Bell. One guidepost in deciding whether that's your situation could be if the premium is over 10% of the vehicle's value, he said. People who have an outstanding car loan should also be aware of how much they still owe before cutting the coverage, Bell added.

Another option is increasing the deductible, which is the amount a driver with an insurance claim is required to pay before the insurer steps in. In a Jerry poll conducted in April, three in 10 drivers said they had increased their deductibles to save money.

But drivers should be cognizant how much more they'd be responsible to pay out of pocket in the event of an accident, said Bell. "It's the equivalent of self-insuring. ... If you are really risk-averse, you need to think twice about that."

-Andrew Keshner

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June 15, 2025 13:00 ET (17:00 GMT)

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