Finding cheapest car insurance can seem daunting, but it doesn’t have to be. With some research and smart shopping, you can secure affordable auto insurance that still provides sufficient coverage. Follow these tips to get the best rates on car insurance.
Compare Quotes from Multiple Insurers
The first step is to get quotes from several different insurance companies. Rates can vary dramatically between insurers for the exact same coverage. Online quote tools allow you to quickly compare rates from multiple providers side-by-side.
Be sure to get quotes from national, regional, and local insurance companies. National insurers like Geico, Progressive, and Allstate tend to spend more on advertising so they may have greater name recognition. However, regional and local companies can often offer very competitive rates. Independent agents who work with multiple insurers are a great resource for obtaining multiple quotes.
When comparing quotes, make sure the coverage details like bodily injury and property damage limits are the same for each one. This ensures you are making an apples-to-apples comparison between policies.
Consider Usage-Based Insurance
Usage-based or telematics insurance programs that use a device to monitor driving habits are another way to potentially lower premiums, especially for safe drivers who don’t rack up excessive mileage. By allowing your insurance company to monitor things like speed, mileage, braking, and the time of day you drive, you may qualify for significant discounts.
The easiest usage-based programs use a mobile app to track driving while others require having a small device professionally installed in your vehicle. Before signing up, review the program policies carefully to understand how premiums are calculated.
Adjust Deductibles to Lower Premiums
Increasing your deductibles is one of the quickest ways to reduce your insurance premiums. The deductible is the amount you pay out-of-pocket before insurance coverage kicks in after an accident or claim.
Raising your deductible from $500 to $1,000 can result in 10% or more in savings. However, make sure you can afford the higher out-of-pocket amount in the event you need to file a claim. Avoid deductibles over $1,000 unless you have ample savings.
Take Advantage of Discounts
Most insurers offer a variety of discounts that can lead to significant savings. Common discounts include:
- Multi-policy: Bundling home and auto insurance with one company
- Good driver: For a clean driving record with no accidents or tickets
- Good student: For teens who maintain a B average or better
- Defensive driver: For completing an approved safe driving course
- Anti-theft: For vehicles with anti-theft devices like alarms or VIN etching
- Low mileage: For driving below a set number of miles per year
Be sure to ask your insurer about all possible discounts and take steps to qualify for the ones you don???t already have. Even minor discounts can add up to major savings over time.
Maintain Good Credit
Your credit score can have a major impact on auto insurance rates. Insurance companies have found a correlation between credit scores and the likelihood of claims being filed.
Drivers with poor credit pay an average of 67% more for insurance compared to those with good credit. Maintaining a high credit score and minimizing inquiries and new accounts can help minimize your rates.
Consider Dropping Comprehensive and Collision
Drivers with older vehicles that have depreciated significantly in value may be able to save by dropping comprehensive and collision coverage which account for up to half of premiums.
Collision covers damage to your vehicle in an accident while comprehensive covers events like theft and vandalism. If your car is worth less than 10 times the insurance premium, you may come out ahead by dropping this optional coverage and self-insuring.
Ask About Other Discounts
Some insurers offer more obscure discounts that can lead to significant savings:
- Homeowner discount: For owning a home rather than renting
- Pay-in-full: For paying your entire 6-month or 12-month premium upfront rather than monthly installments
- Paperless: For opting into paperless billing and documents
- Long-time customer: For renewing your policy continuously with the same insurer for 3-5+ years
Don???t be afraid to ask your insurance agent to see if you qualify for additional ways to lower your rates. Even little-known discounts can make a difference.
Modify Your Commute
Some insurers calculate your rate based in part on your commute time. The longer the commute, the higher the rate. If possible, try modifying your commute to reduce the number of miles driven each week or avoiding high-risk driving periods like rush hour. If you commute less than 10 miles to work each way, mention this to your insurer as it may warrant a lower rate.
Compare Rates Annually
Getting the cheapest car insurance requires checking rates not just when taking out a new policy, but every renewal period as well. Insurance discounts can change over time leading to variability in the cheapest provider from year to year. Set a reminder to compare rates from multiple insurers each renewal to ensure you don???t overpay.
Leverage Group Affinity Discounts
Many professional, alumni, and advocacy groups have negotiated special discounts for members. For example, university alumni associations may offer a discount on auto insurance to alumni. Professional groups like nurses associations often have similar agreements with insurers. Ask about special discounts through any groups or associations you may be a member of.
Choose a Vehicle with Lower Insurance Rates
While you shouldn’t choose a car solely for insurance reasons, it???s helpful to research average insurance rates by make and model. Vehicles that are expensive to repair or commonly stolen tend to cost more to insure. Going with a make and model that has relatively low rates can lead to significant savings, all else being equal.
Enroll in Driver Training Courses
For younger drivers, specialized driver training courses like driver’s ed can lead to lower premiums. Even for experienced drivers, taking a defensive driving course every few years can qualify you for a discount and help sharpen skills. Make sure any driver training course is recognized by your insurer before enrolling to ensure you receive a discount after completing it.
Compare Rates After Life Changes
Major life events like marriage, divorce, moving, adding a teen driver, or buying a new car warrant taking a fresh look at insurance options. After getting married or moving to a new area, make sure to compare rates from local insurers as savings may apply. When adding a teen driver, find out the cost difference of putting them on a parent???s policy vs. their own policy.
Shop Insurance Independent Agents
Independent insurance agents can be a big help finding affordable rates from the insurance companies they represent. They have a fiduciary responsibility to find customers the most cost-effective policies. Independent agents know the ins and outs of how different insurers price policies and can match you with the companies offering the best rates.
Know When to Cut Back on Coverage
If money is extremely tight, reducing liability coverage or eliminating comprehensive and collision can lead to lower rates. But this also increases your financial exposure in the event of an accident or claim. Only modify coverage as a last resort and when financially necessary. As soon as possible, reinstate higher coverage limits when budgets allow.
Seek Out Other Discounts
Don???t limit your discount search just to auto insurers. Many other entities offer a break on insurance just for being a member or customer. For example, some employers offer auto insurance discounts just for working there. Certain banks and financial institutions provide discounted insurance to account holders. Students can sometimes get lower rates just for maintaining an above-average GPA. So think broadly about any other affiliations that may translate to cheaper car insurance.
Final Result
Finding affordable auto insurance rates takes some effort but can lead to hundreds of dollars in savings annually. Following these tips can help you get the absolute lowest rates while still maintaining adequate protection. Check rates frequently and ask about any discounts you may qualify for. With some smart comparison shopping, you can feel confident knowing you are getting the best deal on cheapest car insurance for your needs.
