While finding the cheapest car insurance may not be a top priority for every driver, it’s certainly not a bad idea to save money on car insurance and still stay adequately covered. But finding cheap auto insurance isn’t always as easy as you might think – rates can vary significantly from driver to driver, for drivers who have the same policy and live in the same state.
That’s because car insurance rates are based on numerous factors, including your driving history, the make and model of the vehicle, your age, zip code, and even your gender and credit score if you live in certain states. In addition, each car insurance company uses different methods to calculate rates. But while finding the cheapest auto insurance rates can be tricky, there are strategies you can use to help you get the best rates.
What Factors Can Affect Your Auto Insurance Rates?
Auto insurance companies use a variety of assessment factors to determine your premium. These include your age, where you live, your driving habits, your driving experience, and your credit score in many states, along with other demographic and personal factors.
A good driving record will generally lead to a lower auto insurance rate, while a driving record with convictions for speeding tickets or wrongful accidents is likely to lead to higher premiums over a period of time. You may still be able to get cheap car insurance with a few blemishes on your driving record, but you may have to shop around to find it.
Your age can also affect your car insurance rates. Young drivers without much driving experience are statistically at a higher risk of accidents and incidents on the road, so auto insurance companies will usually charge higher rates to compensate for the risk. Rates typically start to fall after age 25, but can start to rise again for older drivers. However, not all states allow age to be considered determining rates, so whether or not your age affects your car insurance costs depends on where you live.
Where you live can also be a factor in determining your auto insurance rates. In fact, the average cost of auto insurance can vary hundreds of dollars or more from one state or city to another. For example, areas with higher crime rates are typically considered higher risk for insurers, so you may pay more than average based on your location. Some areas may also have more accidents than others, which can also affect your premium.
In some states, auto insurance companies are allowed to take your insurance-based credit surcharge into account when calculating your rate. If you pay bills late or not at all, or if you have other blemishes on your credit report, your auto insurance company may consider you a higher-risk driver. That generally leads to paying more than average for car insurance.
The make and model of the vehicle you drive, as well as any safety features, can directly affect the cost of your auto insurance policy. For example, certain types of cars will cost more on average to insure due to higher costs for replacement parts or repairs. Or some companies don’t offer policies for certain types of vehicles, such as high-end sports cars, which generally carry a higher risk on the road. In those cases, drivers may need to get cover from certain carriers, which can make the cost of their policy higher than average.
The types of coverage you choose can also affect the cost of your premiums. In general, minimum coverage car insurance is cheaper but offers less coverage. Full coverage auto insurance is typically more expensive, but it provides more coverage while you’re on the road. Any additional types of coverage you add to your policy, whether it’s roadside assistance, gap coverage, or something else entirely, can also increase the cost of your car insurance.
How to find cheap car insurance
If you want to find cheap car insurance, it can be useful to first compare quotes from different car insurers. If you shop around, you’re more likely to find a policy that fits your budget.
It may also be helpful to consider the following:
- Opt for a higher deductible: Opting for a higher deductible can help lower your auto insurance rate, but if you go this route, make sure you choose a deductible that you can still afford.
- Ask about discounts: If you qualify for a discount on your auto insurance policy, it can reduce the cost of your premium.
- Get quotes from multiple insurance companies: Shopping around for car insurance is often the easiest way to find affordable car insurance. It can be helpful to get quotes from a few different companies so you can compare and find the best rates.
- Compare quotes per coverage: Some insurance companies may have better rates than others, but the coverage and benefits may be less than what you need. Be sure to compare insurance options based on both coverage and cost to make sure your policy provides adequate coverage.
- Discuss your options with an insurance broker: It may also be beneficial for you to work with an independent insurance broker who can buy a policy on your behalf and determine what insurance you need.
- Consider bundling your car and home policies: Bundling your insurance policies can result in significant discounts, so if you’re a homeowner, it may be helpful to get quotes for bundled coverage to see if it can help lower your premiums.