--- title: "How to save money on car insurance while prices are falling" description: "How to save money on car insurance: why 2026 is a good year to shop around, the changes that lower a premium, and how to budget a yearly bill." author: "Wealtie Team" published: 2026-11-03 updated: 2026-11-03 category: "Budgeting" canonical: https://wealtie.com/blog/save-money-on-car-insurance --- # How to save money on car insurance while prices are falling The best way to save money on car insurance in 2026 is to compare quotes at every renewal: prices fell 5.0% in the year to September, according to the BLS, so last year's premium may now be above the market. Then raise your deductible if your savings can cover it, and check every discount. ## Key takeaways - Motor vehicle insurance prices fell 5.0% in the 12 months to September 2026, according to the Bureau of Labor Statistics' Consumer Price Index. - Falling prices don't reach you automatically; comparing quotes at renewal is how you get them. - US households spent an average of $2,153 on vehicle insurance in 2025, about $179 a month, in the BLS Consumer Expenditure Survey. - A higher deductible lowers the premium, but only makes sense if your emergency fund can pay it. - Paying the yearly premium in one go often costs less than monthly instalments; a sinking fund makes that possible. ## How do you save money on car insurance? Compare quotes at every renewal, raise your deductible if your savings can cover it, ask for every discount, and drop cover you no longer need. Then pay the year upfront if you can. The first one matters most in 2026. Car insurance prices fell 5.0% in the 12 months to September 2026, according to the Bureau of Labor Statistics' [Consumer Price Index](https://www.bls.gov/news.release/archives/cpi_10142026.htm). Falling prices don't arrive by themselves, though. Insurers often keep renewal prices for existing customers higher than what they'll offer a new one. Shopping around is how the fall reaches your bill. ## How much does car insurance cost? US households spent an average of $2,153 on vehicle insurance in 2025, about $179 a month, according to the BLS [Consumer Expenditure Survey](https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-size-2025.xlsx). People living alone spent $1,243, about $104 a month. Those are averages across households with one car, several cars, or none. Your own premium depends on your car, where you live, your age, your driving record and the cover you choose, which is why two quotes for the same driver can be far apart. ## Why compare quotes at renewal? Because your current insurer's renewal price is one quote among many, and it's often not the lowest. Start four to six weeks before renewal. Get at least three quotes for the same cover: the same deductible, limits and extras, so you're comparing like with like. Then call your current insurer with the best one. Many will match or come close to keep you. Do it every year. A habit of comparing at renewal is worth more than any single trick. ## Does a higher deductible save money? Yes, the premium goes down when you agree to pay more of any claim yourself. It only makes sense if your emergency fund can cover the deductible without a credit card. Here's a worked example with illustrative numbers. Raising the deductible from 500 to 1,000 might lower a 1,800 yearly premium to about 1,620. That's 180 a year saved, in exchange for paying 500 more if you claim. If you go three years without a claim, you're ahead. If you can't find 1,000 at short notice, the lower deductible is safer. [How much should be in an emergency fund](https://wealtie.com/blog/how-much-emergency-fund) covers the first target. ## Which other changes lower the premium? - **Discounts:** ask about bundling home and car, safe-driver, low-mileage, multi-car, good-student and paperless discounts. Ask; they're not always applied automatically. - **Cover you no longer need:** collision and comprehensive cover on an old car can cost more each year than the car is worth. Consider dropping them when that happens, if you could replace the car yourself. - **Mileage:** if you now work from home, update your estimated yearly miles. - **Telematics:** some insurers offer lower prices for a driving-tracking app or device. Worth it only if you drive gently and are comfortable with the tracking. - **Your credit and record:** in many US states, insurers use credit-based scores. Paying bills on time helps at the next renewal. - **The car itself:** before you buy, get insurance quotes for the models you're considering. The same driver can pay very different amounts for two cars at the same price. ## Is it cheaper to pay car insurance annually? Often, yes. Many insurers add a charge or interest for monthly instalments. Paying the year upfront avoids it. To do that without one painful month, put a monthly amount into a [sinking fund](https://wealtie.com/blog/sinking-fund): the yearly premium divided by 12. When the renewal arrives, the money is already there, and you can switch insurers without waiting for a better month. ## How do you budget for car insurance? As a monthly cost, even if you pay yearly. 1,800 a year is 150 a month, set aside or paid in instalments. It's one of several costs that sit around a car: fuel, maintenance and repairs, parking and the loan payment. Repair prices rose 5.8% over the same year, according to the BLS, so the money saved on insurance may be needed there. Budget the car as one total, not just the bits that arrive monthly. In Wealtie, set the premium or the monthly sinking-fund transfer as a [recurring transaction](https://wealtie.com/features/recurring) that logs itself on the due date (the Free plan includes one), and give the car its own line in your monthly [budget](https://wealtie.com/features/budgets). Put the renewal date in your calendar six weeks ahead, so comparing quotes happens before the old price rolls over. ## Questions people ask ### How can I lower my car insurance? Compare quotes at every renewal, raise your deductible if your savings can cover it, ask for every discount you qualify for, and drop optional cover you no longer need, like collision on an old car. ### Are car insurance prices going down? Yes, on average. The BLS motor vehicle insurance index fell 5.0% in the 12 months to September 2026. Your own premium depends on your insurer and situation, so compare quotes to see the fall. ### How much is car insurance per month on average? US households spent $2,153 a year on vehicle insurance in 2025, about $179 a month, according to the BLS. People living alone spent $1,243, about $104 a month. Many households insure more than one car. ### Is it cheaper to pay car insurance annually? Often, yes. Many insurers charge more for monthly instalments than for paying the year upfront. Saving a monthly amount in a separate pot lets you pay annually without one big hit. ### Should I drop collision coverage on an old car? Consider it when the car's value is low compared with what collision cover costs each year plus the deductible. If you couldn't afford to replace the car, keep it. ## Sources 1. [Consumer Price Index – September 2026](https://www.bls.gov/news.release/archives/cpi_10142026.htm) (U.S. Bureau of Labor Statistics, checked 1 November 2026) 2. [Consumer Expenditures in 2025, table 1400: Size of consumer unit](https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-size-2025.xlsx) (U.S. Bureau of Labor Statistics, checked 1 November 2026) *This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.*