While finding the cheapest car insurance rate may not be the top priority for every driver, it’s certainly not a bad idea to save money on car insurance while staying adequately covered. But finding cheap car insurance isn’t always as simple as you’d think — rates can vary significantly from one driver to the next, 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 vehicle make and model, your age, ZIP code, and even your gender and credit score if you live in certain states. Plus, each car insurance company uses different methods to calculate rates. But while finding the cheapest car insurance rates can be tricky, there are strategies you can use to help you get the best rates.
What factors can affect your car insurance rates?
Auto insurance companies use a variety of rating factors to determine your premium. These include your age, where you live, your driving record, your driving experience and your credit score in many states, along with other demographic and personal factors.
A clean driving record will generally lead to having a lower car insurance rate, while a driving record with convictions for tickets or at-fault accidents is likely to lead to higher premiums for a certain 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 may also affect your car insurance rates. Young drivers without much driving experience are at a higher risk statistically for accidents and incidents on the road, so car insurance companies will usually charge higher rates to compensate for the risk. Rates typically start to decline after the age of 25, but may start to increase again for senior drivers. Not all states allow age to be considered determining rates, however, so whether or not your age affects your car insurance costs will depend on where you live.
Where you live may also be a factor when determining your car insurance rates. In fact, the average cost of car insurance can vary by 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 higher accident rates than others, which can also affect your premium.
Some states allow car insurance companies to consider your insurance-based credit store when calculating your rate. If you pay bills late or not at all, or if you have other blemishes on your credit report, your car 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 impact the cost of your car insurance. For example, certain types of cars will cost more to insure on average due to having a higher cost of replacement parts or repairs. Or, some companies may not offer policies for certain types of vehicles, like high-end sports cars, which generally come with higher risk on the road. In those cases, drivers may have to obtain coverage from certain companies, which can cause the cost of their policy to be 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 it provides less coverage. Full coverage car insurance is typically more expensive, but it offers more coverage while you’re on the road. Any additional types of coverage that you add to your policy, whether 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 may be helpful to start by comparing quotes from several car insurance companies. If you shop around, you are 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 may help to lower your car insurance rate, but if you take this route, be sure to choose a deductible that you can still afford.
- Ask about discounts: If you qualify for a car insurance discount, it could bring down the cost of your premium.
- Get quotes from multiple insurance companies: Shopping around for car insurance is often the easiest way to find affordable auto insurance. It may benefit you to get quotes from a few different companies so you can compare and find the best rates.
- Compare quotes by coverage: Some insurance companies might have better rates than others, but the coverage and benefits may be less than what you need. Be sure to compare insurance options by both coverage and cost to ensure that you’re getting adequate coverage from your policy.
- Discuss your options with an insurance broker: It may also benefit you to work with an independent insurance broker who can shop a policy on your behalf and determine what insurance needs you have.
- Consider bundling your auto and home policies: Bundling your insurance policies can result in significant discounts, so if you’re a homeowner, it may benefit you to get quotes for bundled coverage to see if it can help lower your premiums.