How to Find Cheap Car Insurance
Auto insurance prices having been rising steadily since 2000, thanks mostly to both the increasing price of vehicles and rising medical costs. That being said, it’s still possible to find fairly cheap car insurance, if you know what to look for.
Comparison Shopping for Car Insurance
By far the best way to find cheap auto insurance is to shop around for different rates. Most of the major carriers make it relatively simple to see exactly what you would be paying by getting some basic information about you and your driving record. In most cases, there is usually not a single provider that always has the best rate.
Financeography Tip: Checking your actual credit score through Credit Sesame is completely free and only takes about 3 minutes.
Some companies make this even easier by doing the comparison shopping for you, usually pulling in 3-5 rates at a time from national and regional insurance companies. This is normally the best way to go if you’re either looking for insurance on a vehicle you just purchased, or if you just want to see what you could be paying. You can use the national coverage comparison tool from Allstate or the regional coverage comparison tool.
Purchasing a Cheaper Vehicle
It only makes sense that a cheaper vehicle would cost less to insure than a more expensive one, but it goes a little deeper than that. Insurance companies are concerned not only because more expensive vehicles cost a lot more to repair or replace, but also because even minor damage is liable to result in a claim. Getting into a fender bender in a $3,000 car might do $1,000 worth of damage to a bumper, but because the car is only worth $3,000, you may not bother submitting a claim if the accident was your fault. On the other hand, the same type of damage to a $45,000 SUV would likely cost at least double that much to fix and the owner would be much more likely to file a claim. Who would want to drive around a super nice $45,000 SUV with a crumpled bumper? Most of the time, you will elect to get it fixed for both aesthetic reasons, and because it would greatly affect the selling price of the vehicle.
Cutting Back On Coverage
Generally, your car insurance coverage is going to cost more if you have higher limits for medical bills and property damage. If you own the car you drive (no loan on it) you have a lot of options when it comes to choosing what type of insurance to get. Almost every state has a minimum amount of coverage you need consisting of medical coverage for a single person, medical coverage for a single accident (all occupants involved) and property damage.
Minimums vary from state to state but you can save money on your insurance premiums by only opting for the absolute smallest coverage limits. If you do get into an accident that is your fault, your insurance will likely cover most (many times all) of the other driver’s expenses but you will be left on the hook for repairing or replacing your vehicle.
Vehicles you are leasing or that have a car loan open on them will almost always require full coverage, which takes care of replacing or repairing your vehicle even when the accident is your fault.
Apply for Insurance Discounts
Good student discounts are useful if you are in high school or college and getting a B average or better. Parents can claim this discount as well if their children are on the same insurance policy. Most of the time, you will end up saving around $10 a month, which is fairly good as far as discounts go, though you are still paying far more than someone over the age of 25 would be paying.
Some insurance companies offer discounts for members of certain unions, banks, credit unions, etc. When you finalize your insurance quote from a chosen company, they will usually give you a list of organizations that, if you are a part of, you can get a discount. These discounts usually are not very much, sometimes equaling $3 or $4 a month, which may not even be worth it if other providers cost less to begin with.
What Makes Car Insurance Rates Go Up
Your driving record is the main thing car insurance companies look at when determining what you will be paying in premiums. If it is spotless with no tickets or accidents, you will be getting their best available base rate. At-fault accidents with claims are looked upon negatively by every insurance company and are on-par with DUIs when it comes to determining your premiums. Multiple accidents or single DUIs can cause your rates to go up 50-100%+ compared to someone with a clean driving record. If your driving record is too bad, you may be denied insurance coverage completely.
The type of car you drive will also play a big role in what kind of rate you will get. Anything with two doors will usually have slightly higher rates than four door cars. This is because coupes are generally thought of as “faster” cars, and in an emergency, people can get out of the backseat easier if there are four doors.
Younger drivers are going to be faced with higher comparative rates until they are about 25 years old, which is a result of a perceived lack of driving experience and maturity. On the other end of the spectrum, once drivers hit 70 year old, their rates will go up due to a higher claim rate. Males will usually have a slightly higher insurance rate than females, mostly because males have a tendency to drive faster.