To obtain affordable car insurance, consider adopting these strategies: regularly compare quotes every 6-12 months, maximize available discounts, and eliminate unnecessary coverage types. By taking advantage of discounts, customers can potentially save up to 35%, and switching to a more affordable company may result in savings of up to 20%. In this article, we’ll discuss various methods to lower your premiums while ensuring comprehensive coverage. Discover how to secure cheap car insurance and enjoy peace of mind knowing you are protected while saving money.
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How You Can Get Cheap Car Insurance
1/Evaluate different quotations every half to a full year.
To ensure that you obtain the optimal deal, it is advisable to compare quotes whenever you need to renew your policy. This is particularly crucial if you have recently received a ticket or been involved in an accident, or if you have been with the same insurer for an extended period of time. Keep in mind that the car insurance company that was the most affordable during your teenage years may not be the most cost-effective option for you now, after a decade has passed.
As a useful starting point for identifying the most affordable companies in your state, WalletHub’s analysis of cheap car insurance can be of great assistance.
2/Avail of the offered markdowns.
Major insurance companies provide a range of discounts to reward customer loyalty, safe driving, and owning safe vehicles, among other factors. While some discounts are applied automatically, others may require additional effort on your part. For instance, you can inquire with your insurer about paperless-billing or paid-in-full discounts. Discover how to take advantage of car insurance discounts and enhance your savings.
3/Ponder over insurance based on usage or per-mile charges.
Usage-based insurance offers drivers the opportunity to receive discounts by practicing safe driving habits, which are monitored through a plug-in device or a smartphone app.
If you’re a careful driver comfortable with monitoring, you can save up to 50% depending on your insurer. Additionally, infrequent drivers can benefit from pay-per-mile programs that charge a base rate plus a few cents for each mile driven.
This type of policy is particularly advantageous for retirees, remote workers, and individuals who frequently rely on alternative means of transportation. Switching to a pay-per-mile policy can lead to significant savings.
4/Boost your insurance deductible amount.
When filing certain insurance claims, such as collision and comprehensive coverage, your deductible represents the sum you must personally cover. Opting for a higher deductible typically yields a lower premium, but it’s crucial to select an amount that you can comfortably handle in the event of an unforeseen claim.
5/Select your coverage limits with precision.
To drive legally, most states have mandated minimum car insurance coverage. In addition, if applicable, you must meet any coverage obligations set by your lender or lessor. Once these requirements are fulfilled, you have the freedom to determine the extent of your additional coverage.
To determine the optimal amount of extra coverage, consider carefully weighing the costs and benefits of each optional insurance type. For instance, if you could manage without a vehicle for a short period, rental reimbursement may not be of utmost necessity. Maximize the value of your insurance choices by evaluating them strategically.
6/Prioritize driving safely.
A driver’s auto insurance premium is heavily influenced by their driving record. Instances of moving violations, at-fault accidents, and severe offenses like DUI or reckless driving result in higher insurance costs due to the increased likelihood of filing claims. Consequently, adopting safe driving practices proves advantageous in the long term. Additionally, exploring potential discounts for enrolling in driver’s education or defensive driving courses is worth considering.
7/Work on enhancing your credit rating.
In states where permissible, major car insurance companies take into account a potential customer’s credit history to calculate premiums. These insurers typically rely on auto insurance scores, which are derived from the same information as regular credit scores. Therefore, unless you reside in Hawaii, Massachusetts, or California, boosting your overall credit score can potentially reduce your premium by up to 67%.
8/When selecting a car, keep insurance expenses in consideration.
High-value cars, powerful vehicles, and cars with higher theft risks tend to have higher insurance costs. To optimize long-term savings, it is advisable to request quotes for various vehicles before purchasing a new car. This allows you to have a better understanding of the expected coverage expenses, making your decision-making process more informed and cost-effective.
Avoid Assuming That A Particular Company Has The Lowest Prices
When it comes to finding the cheapest car insurance rates, don’t make the mistake of assuming that any one company is the clear winner. Sure, those flashy commercials might make it seem like one insurer is offering the best deal on the market. But the reality is that there is no one-size-fits-all solution when it comes to car insurance.
The only way to ensure you’re getting the lowest rate possible is to take the time and compare car insurance rates.
A NerdWallet analysis of rates highlights this importance. For instance, in Florida, State Farm offers the cheapest rate at an average of $1,766 a year for a full coverage policy on a 2018 Toyota Camry LE, while Geico’s average rate is $239 higher. However, in California, Geico is the cheapest option with an average rate of $1,458, while State Farm’s average is $423 higher.
Improve Your Credit
In fact, insurers in most states use credit when determining car insurance rates. That’s why it’s essential to work on your credit and improve your chances of getting lower insurance rates. A recent analysis by NerdWallet showed that poor credit can increase car insurance rates by hundreds of dollars per year compared to having good credit.
Don’t let your credit score hold you back from getting the best insurance deals. By paying your bills on time, reducing debt, and tracking your credit score, you’ll soon be on your way to saving money and enjoying lower car insurance rates.
Skip Comprehensive and Collision Coverage For An Older Car
Collision coverage is designed to repair any damange caused to your vehicle from a car or object, while comprehensive coverage is meant to repair any non-collision related damage. However, if your car is older and has a low market value, it may not be worth it to pay for these coverages.
After all, the maximum payout is limited by the value of the car – so if your car isn’t worth all that much, it might make more sense to forgo these kinds of policies in order to save money on your insurance premiums.
Raise Your Deductible
One option that’s worth exploring is raising your deductible on comprehensive and collision coverage. By agreeing to a higher deductible, you’ll likely see a reduction in your monthly premiums. Of course, it’s important to weigh this potential savings against the risk of having to pay a higher amount if you ever need to file a claim. But if you’re confident you can afford the deductible in the event of an accident, opting for this choice could be a wise financial move.
Consider Usage-Based or Pay-Per-Mile Insurance
With options like Allstate’s Drivewise, Progressive’s Snapshot, and State Farm’s Drive Safe & Save, you can qualify for discounts based on factors like how much you drive and how well you drive. If you’re someone who barely uses their car, pay-per-mile programs like Metromile, Allstate’s Milewise, or Nationwide’s SmartMiles could save you even more money.
Of course, opting for these programs means giving your insurance company permission to track your driving behavior, but if the money saved is worth it to you, it’s worth considering.
Ask About Discounts
Building a relationship with your insurance provider can really pay off. Some companies will give you discounts for bundling car insurance with other policies, such as homeowners insurance, insuring multiple cars with one policy, having a clean driving record, paying your entire annual or six-month premium at once, agreeing to receive documents online, owning a car with certain anti-theft or safety features, or being a member of particular professional organizations or affiliate groups.
However, don’t just think a long list of possible discounts will be enough to convince you. Make sure you compare rates from multiple insurers, so you can find the best deal for you.
What Factors Influence Your Premiums?
Your car insurance premiums are based on several factors, including your car, your driving habits, demographic factors, and the coverages, limits, and deductibles you choose. These factors interact to determine the level of risk you present to the insurance company and how much they will charge you for coverage. Let’s explore each of these factors in more detail:
1/Your car
The make, model, age and value of your car all play a role in determining your premium. Generally speaking, older cars cost less to insure than newer ones because they’re worth less and are often not equipped with safety features like airbags or anti-lock brakes.
2/Your driving habits
If you’ve been in multiple accidents, your insurance cost is likely to be higher than someone with a clean driving record. However, if you’re a new driver and have not had insurance before, you’ll pay more for car insurance regardless of your driving record.
Another significant factor is how much you use your car. Insurers usually consider the amount of time you spend behind the wheel. If you have a long daily commute, you may pay more for insurance than someone who only uses their vehicle to run errands on weekends.
3/Demographic factors
If you live in an urban neighborhood that is more prone to accidents, theft, and vandalism, you may end up paying a higher premium. Your age and gender are also significant factors, as younger and less experienced drivers are often charged more for car insurance.
4/The coverages, limits and deductibles you choose
The type of coverage:
While liability coverage is typically required by most states, you also have the option to choose additional coverages such as comprehensive, collision, uninsured/underinsured motorist coverage, and medical payments or personal injury protection.
It’s important to carefully consider these coverages and their limits in relation to your budget and potential risks. Additionally, you may want to consider optional protections such as towing and labor costs, rental reimbursement, and sound system coverage.
Your limits and deductibles:
Your policy’s limits represent the maximum amount your insurance company will pay towards a covered loss. By adjusting your coverage limits based on your needs, you can find a balance between the coverage you need and the premium you’re willing to pay.
Similarly, your deductible is the amount you agree to pay before your insurance kicks in. Choosing a higher deductible can help lower your insurance premiums, but it can also mean paying more out of pocket in the event of a covered loss.
Ultimately, your insurance provider can help you determine which coverage, limits, and deductibles are best suited to your needs, as well as identify any discounts you may be eligible for.
The Cheapest Car Insurance
If you’re looking for the cheapest car insurance option, you may want to consider your state’s minimum coverage requirements for liability-only auto insurance. This type of coverage covers property damage and medical expenses of others as a result of accidents that you caused. Our analysis primarily focuses on rates for this type of coverage across different states.
However, it’s important to keep in mind that your car insurance rates will vary depending on your location and driving history, among other factors. Check out our list of the overall cheapest car insurance companies for each category.
| Category | Company | Average Monthly Rate |
|---|---|---|
| Midsize company | Auto-Owners | $28 |
| Senior drivers | State Farm | $36 |
| Large company | State Farm | $37 |
| After a speeding ticket | State Farm | $45 |
| After an accident | State Farm | $50 |
| If you have poor credit | Geico | $73 |
| After a DUI | State Farm | $68 |
| Young drivers | Travelers | $86 |
The 10 States With the Cheapest Car Insurance Costs
Here’s a look at the 10 states with the lowest average monthly car insurance rates based on our research:
| Rank | State | Average Annual Cost |
|---|---|---|
| 1 | New Hampshire | $940 |
| 2 | Maine | $992 |
| 3 | Ohio | $1,010 |
| 4 | Virginia | $1,066 |
| 5 | Idaho | $1,118 |
| 6 | North Carolina | $1,124 |
| 7 | Vermont | $1,145 |
| 8 | Wisconsin | $1,169 |
| 9 | Pennsylvania | $1,214 |
| 10 | Indiana | $1,215 |
I’m Timothy Ballard, owner of a used car dealership in Springfield. I love just about everything automotive, but I have a special place in my heart for trucks. I’m an ASE Certified Master Technician, so I know my way around a car. In my spare time, I enjoy traveling with my family and hiking new trails.
I am a 20-year-old male with a clean driving record. Currently, I pay $300 per month for a used 2014 Chevy Equinox with 150k miles on it. Among various insurance companies, Progressive offers me the most affordable coverage. However, $300 a month remains a significant expense, second only to my rent. In comparison, I only pay $200 a month for my 36-month car lease.