Cheap Car Insurance

How can you get cheap car insurance? Let's review some ways to save on your next policy.

How to save on car insurance


We all know those insurance commercials: they all advertise "fantastic" rates, and somehow every insurer is the cheapest. But when you read between the lines, it's clear that cheap auto insurance isn’t always the way to go when your vehicle — and your money — is at stake. But there are ways to save on insurance without sacrificing quality or service.


In this article, we'll discuss:
  1. How to find cheaper car insurance
  2. Why is auto insurance so expensive?
  3. How to get car insurance discounts
  4. Is cheap insurance always the way to go?
  5. What are the best cheap auto insurance companies?




Where to find cheap car insurance


If you're in the market for car insurance, the best place to look is online. Your best bet is to shop between multiple companies to see which offers the best coverage at the best rate.




Keep in mind: your rate is specific to you


Myriad factors determine car insurance rates, including location, your age, your insurance history, your driving history, and the car you drive. If you've accumulated at-fault accidents or claims, your rate will increase. If your credit history is poor or your zip code has a large number of uninsured motorists, you might not be able to find cheap auto insurance.

Learn more about how car insurance quotes are generated.




How to save on auto insurance


You can’t improve your credit score overnight, but there are some easy ways to reduce the cost of car insurance — like discounts.


Multi-policy discount

Qualifying for this discount involves carrying two insurance policies with one company. Common bundle combinations include home-and-auto or renters-and-auto. The discount is greater for the former, with a homeowner saving an average of $110 per year, compared to $72 for a renter. The discount affects both policies, but the amount above refers to auto insurance only.


AVERAGE MULTI-POLICY BUNDLE DISCOUNTS
RenterHomeowner
$72$110

Telematics

Telematics — or usage-based insurance — is a growing trend in the insurance industry. These programs track your driving habits via an in-car device. Your car insurance rates will be determined by your driving habits, including speed, mileage, and other factors, rather than your age, credit history, or location. Some insurers offer major discounts for telematics-based insurance.


CompanyEstimated Savings
Progressive SnapShotAverage of $130
Allstate DrivewiseAverage of 10-25%
State Farm Drive Safe & SaveUp to 15%
Esurance DriveSenseVaries
Nationwide SmartRideUp to 40%
Liberty Mutual RightTrackAverage of 5-30%

Not every state authorizes these programs. Check with your company to gauge your eligibility.


Be smart with your coverage

Your 2003 Pontiac isn't gaining value over time. If you have an older vehicle, it might not require the same levels of coverage as a newer vehicle, i.e., comprehensive and collision insurance. Here are some easy steps to consider when thinking about your coverage options.

  • Using Kelley Blue Book and the NADA (National Automobile Dealers Association), determine the market value of your vehicle.
  • Using the information from step 1, look at the difference in price between having full coverage (comprehensive and collision) and having only liability. If the amount of money you save in premium from losing full coverage is not enough to cover or replace your vehicle (which you determined from step 1), keep these coverages.
  • If you determine that you still need comprehensive and collision coverage, consider raising your deductible. By raising your deductible, you lower your premium as you assume a greater amount of financial responsibility if your vehicle is totaled.

Note: Even if you remove these optional coverages, you should keep your bodily injury and property damage coverage. Consider keeping your uninsured/underinsured coverage as well.


Defensive driver discount

This discount entails taking a defensive driving course and presenting your insurance company with proof — a receipt or transcript — of it. The logic behind this discount is clear: a safer driver is a cheaper client because they're less likely to file a claim.


Equipment discount

If your car comes with an anti-theft device or a service like LoJack, your insurance company may provide a discount. The discounts tend to be smaller than a multi-policy or defensive driver discount. On average, using a disabling anti-theft device can save you an average of $11 per year on car insurance.


Average insurance savings: safety devices

Safety/Anti-Theft DeviceAverage Annual PremiumDiscount
None$1,323
Passive Disabling Device$1,312$10
Tracking Device$1,314$9
Audible Alarm$1,317$6
Electronic Stability Control$1,318$5


Good driver discount

Naturally, this discount is offered for drivers with clean on-road records. Good driver discounts can be added when your Motor Vehicle Report or CLUE report is pulled at the inception of your auto policy. If you're convinced you have a clean driving record — meaning no at-fault accidents or violations — and aren't receiving a discount, speak with your insurance company and ask if they offer a discount for good drivers. By keeping a clean driving record, you get the discount — typically 10% — as well as avoid the costly penalties listed below.


AVERAGE ANNUAL INSURANCE COST INCREASE BY VIOLATION
Accident/Violation6-Month Premium Increase
None
Speeding 11 - 15 MPH Over Limit$141
Speeding 16 - 20 MPH Over Limit$153
Speeding 21 - 25 MPH Over Limit$165
At-Fault Accident$306
Reckless Driving$499
Racing$523
DUI$529


Military discount

Many companies offer discounts for active or former military members and their families. The amount and qualifications differ per company but you should ask if your current company has this discount.


Multi-car discount

A multi-car discount involves insuring more than one car with a single insurance company. Typically, the discount is automatically added either at policy inception — if two cars were originally added — or when you add the second vehicle to the policy.


Preferred payment discount

This discount refers to the manner in which you make your insurance payments and has tiers, typically. For example, if you pay your entire premium up front, you are often given a discount: the highest preferred payment discount. A paid-in-full discount can save you $62 per year on your auto policy. Moreover, if you set up automatic payments from a bank account, you can often receive an Electronic Funds Transfer (EFT) discount.” An EFT discount can lead to savings of about $28 annually. If you are able to pay upfront or through automatic payments, this is a great way to get cheaper car insurance.


AVERAGE RATES: ETF AUTO INSURANCE DISCOUNT
YesNoSavings
$1,295$1,322$27

AVERAGE RATES BY PAYMENT PLAN
Paid In FullInstallmentsSavings
$1,261$1,323$61

Profession discount

Some insurance companies will offer a discount based on your occupation. Statistically, some occupations — teachers, physicians, or police officers — are less likely to file a claim and thus pose less risk. Because of this, some insurance companies return the savings back to you. Usually, they will require proof of your profession—a photocopy of your degree is common.


If you'd like more information on finding cheap car insurance via profession-based discounts, see our other articles:



Good student discount

If you have a young driver, you understand how expensive they can be to insure. Given the number of claims they cause, teen drivers are considerable risks for insurance companies. If your son or daughter has the grades — typically above a 3.0 GPA — speak with your insurance company about a good student discount. Normally, they’ll ask for a transcript every policy period (6-12 months) as proof.


GOOD STUDENT DISCOUNTS: AVERAGE SAVINGS
Average TeenAverage Male TeenAverage Female Teen
$283$360$207



Cheap car insurance: pros and cons


You’ve heard the phrase “you get what you pay for.” This sometimes applies to car insurance. Sometimes an auto insurance company is cheap because it offers minimal customer support or because it cuts corners in the claims process, leaving you to pick up the pieces. If an easy and reliable claims process or customer service are important to you, evaluate your cheap auto insurance options carefully.





Cheap car insurance companies


Because every driver is different, it's hard to give specific advice on which insurer will provide the cheapest rates. Your best bet is to shop around frequently and get car insurance quotes from top providers.



Compare rates from top insurance companies today!



We did company-by-company analysis, based on standard driver profiles. Dive into the details and find the cheap auto insurance company for you.





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