Your eyes weren’t deceiving you the last time you opened your car insurance bill — auto insurance premiums are the highest they’ve ever been.
The Bureau of Labor Statistics reports that, between September 2020 and September 2025, auto insurance premiums rose by a whopping 64%, which is 25% more than the rate of inflation.
This has prompted drivers to take drastic measures to try to lower their costs, from searching for new ways to live frugally to driving without any insurance coverage, according to a survey by LendingTree.
But financial expert Suze Orman doesn’t want you to risk your safety at the expense of saving money. The bestselling author, motivational speaker, and longtime CNBC host and podcaster often uses the catchphrase “people first, then money, then things” to describe her financial philosophy, which means that you must always prioritize your own well-being — and protecting yourself with car insurance is a nonnegotiable.
However, Orman says the same common-sense wisdom she distills through her books and podcasts can also help drivers frustrated by rising insurance costs. Maintaining a high credit score (greater than 740), for instance, is one of her 9 Steps to Financial Freedom, because it allows you to secure the best possible rates on loans and mortgages.
Having a high credit score also allows drivers to receive lower car insurance rates because insurers view them as less of a risk.
In addition, keeping an emergency fund, another cornerstone of Orman’s financial philosophy, helps people “sleep better and worry less.” It also lets drivers raise their auto insurance deductibles (more on this below) and shoulder any out-of-pocket expenses in the event they are involved in an accident.
Here are 5 specific actions Orman believes drivers can take to lower their car insurance premiums without sacrificing their essential coverage:
1. Raise your deductible
Orman’s first step has to do with your deductible, or the amount you pay out of pocket before your insurance coverage begins following a claim.
According to Orman, deductibles of $250 or $500 are often too low — and that’s a problem. “Lower deductibles can actually end up costing you plenty,” Orman writes, because having a low deductible increases the urge to file small, and often unnecessary claims.
Related: Suze Orman’s 4 best mortgage insights for homebuyers
Filing these types of claims could lead to higher annual premium costs or even allow your insurance company to decide not to renew your policy, she continues.
Instead, Orman wants people to raise their deductible to $1,500 or higher. Doing so can also lower your annual insurance costs by 5% to 10%, or more. Just make sure you have that emergency fund in place to cover the higher deductible. “The last thing I ever want is for you to ‘cover’ small damage costs by putting them on a credit card you can’t pay off immediately,” she adds.
2. Shop around for insurance
This is something many people simply don’t take the time to do, but that’s a mistake, according to Orman. “The lazy customer who just resigns themselves to re-upping is [insurance companies’] ideal customer. Don’t be that person,” she says.
If you want to save money, go online and compare quotes. You could even call up your current auto insurer and ask why the premium is so high.
Related: When to buy a home instead of continuing to rent, according to Ramit Sethi
Industry experts generally recommend comparing rates every one to two years or whenever a significant premium increase occurs.
And if you have bundled home and auto insurance, make sure any changes you make won’t also affect your home insurance rate.
3. Consider pay-per-mile coverage
Some insurance companies now offer policies with a monthly premium plus a “per mile” cost, kind of like a prepaid phone plan.
“Switching to a mileage-based policy could reduce your overall car insurance costs,” Orman says, if you don’t use your car that much or, if you have multiple vehicles, have one that you only designate for short trips around town.
These plans could be especially helpful to retirees or remote workers.
4. Think twice before buying that new car
With the average price of a new car now eclipsing $50,000, “cars have become a financial danger zone,” Orman says, adding, “No wonder so many of you tell me you are stressed about saving enough for retirement or building up your emergency savings.”
More on Suze Orman:
- Suze Orman’s 5 best insights on saving and spending wisely
- Suze Orman’s net worth: The personal finance icon’s wealth
- Suze Orman reveals alarming truth about retirement costs
Furthermore, if you trade in your car and still owe money on it, you create negative equity that is rolled over into your new loan. This makes it difficult for you to sell your car down the line and could spell disastrous consequences if you get into an accident and your car is totaled, because your insurance company will only pay for the car’s market value.
Orman advises people to keep driving their cars for as long as possible after paying them off — she suggests five years. If the payment was $750 a month, that’s $9,000 you could put towards an emergency fund or invest in a Roth IRA, her preferred investment vehicle.
5. Reconsider whether you need a car at all
Orman is known for her “tough love” approach — she once told a couple they couldn’t afford a puppy because they were mired in so much debt.
But the point of these “Suze Smackdowns,” as her friend and mentor, Oprah Winfrey, called them, was to get people to examine their spending habits with eyes wide open.
With the cost of owning a car now running at $1,000 a month or more, Orman wants car owners to examine how their lives could change for the better if they ask themselves some hard questions.
For instance, if you live in a city with plenty of public transportation options, is owning a car really necessary? What about asking your boss to let you work from home more, so you could commute less? Or if your household has multiple vehicles, could you get rid of one and carpool instead?
“If you are feeling financial stress, how would you not jump at the chance to remove $1,000 or more in monthly spending?” Orman asks. “Even if you end up renting a car a few times a month, or you use ride shares more, I bet you can still save more than $500 a month by getting down to one (or no) car. And that’s not even factoring in the cost of maintenance.”
