8 Ways to Find Cheap Car Insurance

Chad Zollinger

Last Updated: April 27th, 2021

Red slug bug car parked
With so many ways to find cheap car insurance, drivers throughout the United States shouldn’t have to overpay for coverage. Whether you have a good or bad driving history, a teen or college student driver on your policy, or multiple vehicles insured, lowering your premiums is almost always possible.

Below, we’ll cover how to save money and lower your insurance rates with basic strategies. Additionally, we’ll show you how to ask for and get all the discounts you qualify for. Here’s how to get the cheapest car insurance from the best companies in your state:

1. Shop around
Car insurance is like any other product or service – the drivers who shop around and compare reviews and prices always get the best deals. This starts with the fact that you should never assume one company is cheaper or better than another.
Most providers spend hundreds of millions of dollars a year convincing consumers they offer the lowest rates or the best coverage. However, the only way to know for sure is to get an insurance quote online and compare policies, coverage, premiums, and service.
Just remember that you don’t absolutely need to switch insurers if you find a lower price elsewhere; you can simply use the competing bid as a negotiating tool to bring down the rate at your current company.

2. Ask for discounts
Some insurance companies won’t automatically apply all the discounts you may qualify for. In some cases, you may need to request the discounts and possibly prove that you meet the requirements. Here are some discounts to look for:

  • Multiple policies – companies offer lower rates to policyholders who have more than one type of coverage with them.
  • Multiple vehicles – if you’re insuring more than one car on the policy, you’ll likely get a price break.
  • Clean driving record – although insurers will apply this automatically, your driving history may have discrepancies. If you don’t currently have it applied, verify the claims for accuracy.
  • Pay upfront – if you can afford it, pay your premium for 6 or 12 months upfront to earn about 5 percent off your total cost of coverage for the year.
  • Safety features on cars – companies will often charge lower premiums to insure cars with safety features, including anti-theft devices, airbags, traction control systems, etc.
  • Professional organizations – if you’re part of a professional or affiliate group that has a relationship with the insurer, make sure it is noted on your account.
  • Grades – good students in high school or college will receive a discount for a “B” average or better. Just note that your provider may ask to see a transcript for proof.

A long list of discounts won’t necessarily yield the cheapest insurance; always compare the final price.

3. Don’t buy collision and comprehensive insurance for an older car
Collision and comprehensive insurance coverage is relatively expensive compared to basic liability coverage. Where liability pays to repair another person’s vehicle, collision pays to repair your own vehicle after an accident. Furthermore, comprehensive coverage protects your car against theft or damage from fire, wind, hail, flood, vandalism, or a collision involving an animal. Because full coverage (collision and comprehensive) is generally higher priced, it often doesn’t make sense to add it to your policy on an old car with little value. This policy option can literally save you hundreds of dollars a year.

4. Increase your deductible
If you’re a good driver, don’t file many small claims, or simply want to save money on your annual cost of car insurance, then you should consider raising your deductible. Your deductible may be increasing your premiums substantially if you’ve opted for a $250 deductible or have a low amount set for your comprehensive and collision coverage. A change from $250 to $500 can save you a couple hundred dollars per year.

5. Research insurance costs when buying a new car
Most Americans may not think about it in advance, but car insurance is a monthly or annual expense of car ownership. If you’re considering an auto loan and are leaning towards one that’s on the edge of your budget, then insurance costs may push you outside of your comfort zone. For this reason, always compare rates on different new cars before arriving at the dealership, especially if you want to purchase a sports car or luxury vehicle.

6. Compare car insurance rates by area
Drivers may be tempted to compare their current premiums to the overall national average or family and friends who live in different states. Unfortunately, car insurance rates are hyper-local, meaning where you live plays a huge role in your cost of coverage. For instance, different states have different levels of required coverage mandated by state regulations and laws. Similarly, different states, cities, and zip codes can have vastly different insurance risks. To determine whether you are paying too much for your policy, you’ll need to compare average car insurance rates by state.

7. Avoid tickets and accidents
Drivers need to be aware of the full costs of moving violations and accidents. Many drivers limit their thinking to how much a speeding ticket might cost upfront, believing a few hundred dollars isn’t a big deal. The issue is that, although a driver may be able to complete a defensive driving course to expunge one ticket from their record, subsequent tickets will stay on their record for at least three years. Furthermore, on average, insurance rates increase by 10 percent after a ticket and 50-150 percent after an accident.

8. Improve your credit score
While some states prohibit the use of your credit score as a car insurance rating factors, most states allow companies to factor this variable in. The logic behind the idea is that individuals who are financially responsible tend to be safer drivers. If you have bad credit, be cognizant that it may be affecting more than just your ability to get a home loan from the bank. Similarly, if you’ve recently taken steps to significantly improve your credit score, make sure your insurance company is using your updated record. It may be possible to ask them to pull a fresh report to demonstrate that you’ve fixed your credit history.

While getting cheap car insurance is certainly important, it is critical to balance good coverage with affordability. After all, insurance is really about protecting your personal assets and providing financial security for you and your family. Use these strategies to get the best rates for the best policy.

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