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Although car insurance pricing is relatively static, there are good and bad times to purchase a policy.
This depends on two variables: you and the car insurance industry. For you, the best time to shop for car insurance quotes is immediately after any life event or change that might impact your rates. Looking at the car insurance industry as a whole, December is typically a good time of year to shop around.
Car insurance companies use aspects of your life — rating factors — to determine your premium. When these rating factors change, it can lead to big shifts in your rates. Primary insurance rating factors include age, driving record, and credit score.
Because the number of years of driving experience is a major rating factor used by all insurers, a birthday can result in discounted insurance rates. A driver in their 20s pays $530 more per year for car insurance than does the average driver in their 30s.
|Age Group||Average Annual Insurance Premium||Difference|
Overall, drivers aged 16-19 pay the most for car insurance. There is a price difference of over $1,500 per year between 18-year-old and 19-year-old drivers. If you’re a young driver or a parent insuring a young driver, keep these key birthdays in mind.
|Age||Average Annual Premium||Difference|
Learn more about how age impacts car insurance rates.
Every state and every insurance company uses driving history to set its rates. Insurance companies use a driver's previous behavior as a way of predicting future driving outcomes. "Previous driving history” does not include your entire driving history. While the statute varies by state and violation, most at-fault accidents, tickets, and other citations will only impact your premium for three to five years.
An example: after colliding with a pole in August 2015, you file a collision claim with your current car insurance provider. By August 2018, your premium should no longer be rated for that at-fault accident. However, if your policy doesn’t renew in August, it’s very unlikely your premium will reflect the accident “falling off” your record. This is why it’s important to shop for new car insurance occasionally.
Because your current insurance company will not automatically update your premium, you should shop for car insurance after any type of chargeable violation falls off your insurance record.
See below the impact at-fault accidents, speeding tickets, and other common charges have on insurance premiums.
|Violation/Citation||Average Annual Premium||Difference From No Violations|
|Driving With Suspended License||$2,388||$918|
|At-Fault Accident — Damages Greater Than $2,000||$2,087||$617|
|Speeding — 16-20 MPH Over Limit||$1,812||$342|
|Texting While Driving||$1,760||$290|
|Cell Phone Violation||$1,758||$288|
For more information on how your driving record can impact your car insurance policy, see our guides below.
Any changes to your credit score will affect your insurance premium. Credit is viewed by nearly all insurers is a risk indicator. Studies show drivers with poor credit tend to file claims more often than drivers with better credit. These claims tend to be more costly for car insurance companies. As a result, drivers with lower credit tend to pay much more for car insurance.
If your credit has improved between policy periods, this is a great time to shop for car insurance. Just as with a violation or claim falling off your record, your current provider will not automatically review your credit score if it changes. So keep your credit in mind when thinking about the best times to shop for car insurance.
For more information regarding car insurance and credit scores, see our additional resources:
While not as impactful as rating factors directly related to you, understanding the way car insurance companies price premiums can be helpful. Car insurance companies use end-of-year claim filings to set their rates moving forward. If in the prior year, the insurance company paid out more in claims than it earned in premiums, you can expect to see a rate hike as a result.
These "rate revisions" occur every year. An increase in insurance premiums is common after natural disasters, such as hurricanes or wildfires, in which an insurance company had to pay out a large number of claims in a short period of time.
Although this is difficult to predict, you can set aside a time in December to shop for car insurance for the coming year.
Car insurance is a state-regulated industry, so you typically won't find holiday savings or promotions. Trying to anticipate insurance companies' rate revisions can be hit or miss. The best time to shop for car insurance occurs immediately following life events that result in personal rate revisions. If you celebrate a birthday, improve your credit score, or have a violation fall off your record, you should consider that a sign to shop around.
While we only mentioned three key life events, below are other events which may impact insurance rates:
If you’ve experienced one of these life events, you should shop for car insurance. Enter your zip code below to see how much you could be saving with dozens of local and national companies.