8 Ways to Get the Cheapest Car Insurance
Many factors affect car insurance rates, including the type of vehicle you drive and your driving record. However, there are also ways to save money on car insurance by shopping around and taking advantage of discounts.
These tips include comparing quotes every 6-12 months, asking about discounts, and considering usage-based or pay-per-mile insurance programs that track your driving through a telematics device.
- Don’t assume any one company is the cheapest
There are no universal rules about what companies offer the cheapest car insurance since every insurer considers different factors when creating your quote. But it is a good idea to shop around for rates every 6-months or whenever you renew your policy. You may find a company that offers cheaper rates or at least one with better customer service or more discounts.
It’s also a good idea to get quotes for exact coverage amounts, limits, and deductibles you need, so you can compare apples to apples. You should not skip essential coverage to save money, because that could leave you open to expensive repair bills or lawsuits in the future.
There are several ways to reduce your rate, including a clean driving record and a good credit score. You can also take a defensive driving course or bundle your policies to qualify for lower rates. Some other common discounts include being a military veteran, getting paperless statements, or having an anti-theft device. Significant life changes can also cause your rates to go down, such as when you get married or move to a new ZIP code.
- Don’t ignore local and regional insurers
Many drivers are told to stick with nationally known insurance companies, but even those firms do not offer the cheapest car insurance for every driver. The reason is that each person’s profile, driving history, and location influence premiums in different ways. Some factors are in your control, like your age and credit score, but others are not, including where you live and whether you have children in school.
For example, the cost of car insurance varies by state and region, with rates in urban areas often higher than those in rural areas. Insurance companies also factor in crime rates, traffic congestion, and safety hazards.
For example, in New York City, NYCM and USAA have the cheapest rates, but in general, the best cars to insure are those that are inexpensive to repair or replace after an accident. Similarly, if you have multiple speeding tickets or a DUI on your record, expect to pay more than those with clean records. But, some providers have some patience with bad drivers: Geico, for instance, has the lowest rate increase of any provider after a DUI. You can also save money by bundling your car and home insurance, paying your premium upfront, or being a member of certain professional organizations.
- Ask about discounts
It’s not always possible to find the cheapest car insurance. That’s because every insurer factors in different information when determining a rate. That’s why it’s important to shop around and ask about available discounts. In addition to the standard ones like a good driver, loyalty, and safety features, you may qualify for a discount for bundling your home and auto insurance, paying your premium in advance, having a clean driving record, or getting a car with anti-theft devices.
In many cases, the cheapest car insurance depends on what type of vehicle you own and how much it costs to repair. If you want to keep your costs low, consider buying a model that’s less likely to be stolen or damaged, such as the Subaru Outback and Crosstrek, Honda CR-V, or Mazda CX-5.
- Work on your credit
Car insurance is a necessity, but it doesn’t have to break the bank. While bad credit can make a significant dent in your premium, you can still get affordable coverage by shopping around and taking advantage of discounts.
While your credit plays a major role in car insurance rates (except for the states of California, Hawaii, and Massachusetts), other factors like age and driving history can also impact your rate. To help boost your score, pay bills on time, decrease your debt, and check your credit report to ensure it’s correct.
Additionally, bundling auto insurance with home or life insurance, lowering coverage limits to liability only, and using a telematics policy that calculates cost based on mileage can all save you money. Finally, it’s also a good idea to shop around each year before your renewal to see if the market has changed and you can find a better deal.
- Skip comprehensive and collision coverage
It’s important to assess your coverage needs and compare prices before making a change. But dropping comprehensive and collision auto insurance isn’t the best option for everyone. It’s only a good idea when your vehicle is old or has lost a significant amount of value. Then the maximum payout of a claim is likely to be significantly less than what you’d pay in premiums.
If you decide to drop these coverages, make sure you have the money to cover the deductibles in case of an accident or theft. Also consider other ways to save, such as paying annually rather than monthly or using public transportation more frequently. Many insurance providers factor in your yearly commuting to help determine your rates.
Another way to cut costs is by choosing a smaller-engine car. These are often cheaper to insure than more powerful vehicles and can also qualify you for a classic car owner’s discount. But it’s also a good idea to talk to your insurer about what type of vehicle and modifications are most affordable for you.
- Raise your deductible
Many people assume that the higher their car insurance deductible, the lower their premium will be. The truth is that this isn’t necessarily true. Insurance companies typically weigh the risk of a claim against the cost of a policy. It’s important to know how much you can afford to pay for a car repair or comprehensive coverage claim before choosing a deductible amount. It’s also a good idea to consider the vehicle’s value and your emergency savings, to make sure you can afford that deductible in the event of an accident.
Auto insurance can seem like an unwelcome expense, but it doesn’t have to break the bank. There are plenty of ways to save money, including choosing a more affordable vehicle, driving less, bundling policies, and taking advantage of discounts. By following these tips, you can find the best auto insurance for your budget and needs. Then, you can relax knowing that you’re protected in the event of a crash or natural disaster. You’ll be glad you shopped around and made the effort!
- Consider usage-based or pay-per-mile insurance
Getting cheap car insurance is all about comparison shopping and taking advantage of discounts. However, it’s also important to consider how much you drive.
Safe drivers and those who drive fewer miles can save significantly by enrolling in a usage-based or pay-per-mile policy. These policies typically involve a telematics device (also known as a black box) that monitors driving habits, such as when and where you drive, how fast you drive, and your braking and acceleration behavior.
A telematics device can be built into your vehicle or plugged into your dashboard, and most insurers have smartphone apps that allow you to check how you’re driving.
It’s also worth considering bare-bones coverage, which can save you 30% or more on your annual car insurance rate. Just be sure you’re still adequately covered for any serious claims, as a bare-bones policy may leave you underinsured. Bare-bones policies usually include minimum bodily injury liability, PIP, and property damage liability coverage. However, they exclude collision and personal injury protection. This could be a good option for people who don’t drive much or have excellent health coverage.
- Check insurance costs when buying a car
Most states require a minimum amount of car insurance coverage to drive legally. Beyond the required coverage, it’s important to consider the costs of additional optional policies. For example, personal injury protection and medical payment coverage add up quickly. For some drivers, it may be cheaper to go with bare-bones coverage that consists of just liability insurance or forgo it altogether in favor of taking out an affordable medical reimbursement plan.
The year, make and model of a vehicle also affects rates. Insurers take into account safety test results, repair costs, and theft rates when pricing a policy for a specific model of vehicle. Some cars, such as luxury vehicles and powerful sportscars, are more expensive to insure than others.
Driving history is another big factor. Drivers with a clean record get the lowest rates while at-fault accidents and citations push insurance rates up significantly. Reviewing your coverage options, limits, and deductibles on an annual basis can help keep your premiums low. In addition, using mass transit and lowering the number of miles you drive can lower insurance rates.