If you’ve never paid as much for car insurance as you do now, you’re not alone. Car insurance rates rose by an astonishing 24% in 2023, according to a report by Insurify, which lifted the average cost of full-coverage insurance from $1,633 in 2022 to $2,019 in 2023.

Despite these trends, my car insurance rate has remained steady and low. I pay less than $720 per year for coverage, or roughly $60 per month. Meanwhile, the average annual cost of car insurance for my state (Oregon) is about $1,475, which means I’m paying about $750 less than the average. While my method isn’t replicable for everyone, here’s how I keep my car insurance payments cheap.

1. I pay by the mile

Currently, I work from home, live in a big city with great public transit, and only occasionally use my car. When I shopped among traditional insurance companies, I was getting quotes ranging from $100 to $140, which seemed a little high for how seldom I drive. So, I decided to go with a pay-per-mile company — Lemonade — and I’m saving big because of it.

With Lemonade, I have a base rate of $48.50 and a per-mile rate of $0.08. On average, I drive about 150 miles per month, which comes out to about $12. That puts my premium at roughly $60 per month.

Of course, sometimes I drive longer distances. For instance, I like to go to the Oregon coast, which is about 178 miles there and back from where I live. But even that only comes out to like $14.24, which still puts my monthly premium below traditional insurance.

2. I don’t need full coverage

Considering that I’m not driving a lot these days, I don’t need insurance with all the bells and whistles. I don’t have comprehensive or collision (both would add an extra $36 to my monthly rate), and I also don’t have temporary transportation coverage. I maintain liability coverage with limits of $100,000 per person, $300,000 per accident, and $100,000 in property damage per accident (100/300/100), which is what experts recommend.

Notice that I still have high liability coverage. For me, forgoing this is a dealbreaker: Even though I can save $6 monthly by getting the cheapest coverage (25/50/50), I don’t want to be in a situation where my insurance doesn’t cover the full accident. I would rather pay $6 more each month than pay thousands of dollars out of pocket for damages that exceed my minimum coverage.

3. I have a high deductible

Finally, I have my deductible set at $1,000. While lower deductibles would mean I pay less out of pocket when I file a claim, I’m also saving about $120 per year with a higher deductible. I’m fine taking a slightly smaller claims check to save money on my monthly premium.

All in all, finding cheap car insurance is about experimenting with different policies and finding one that matches your driving behavior. Even if you drive more frequently than I do, you might still find a cheaper rate by shopping around and gathering policy quotes. To get started, check out our list of cheap car insurance companies and see if one can offer you a lower rate.

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