While finding the cheapest auto insurance may not be the top priority for every driver, it’s certainly not a bad idea to save money on auto insurance and still be 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 policies and live in the same state.
That’s because auto insurance rates are based on many factors, including your driving history, vehicle make and model, your age, zip code, and even your gender and credit score if you live in certain states. In addition, each auto 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 several rating factors to determine your premium. These include your age, where you live, your driving experience, 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 a lower auto insurance rate, while a driving record with convictions for speeding tickets or fouls will likely result in higher premiums for a period of time. You may still be able to get cheap auto insurance with a few imperfections in your driving record, but you may have to shop around to find it.
Your age can also affect your auto 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 typically charge higher rates to compensate for the risk. Fares typically start to fall after age 25, but can start to rise again for older drivers. However, not all states allow age to determine rates, so whether your age affects your auto 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 from one state or city to another by hundreds of dollars or more. For example, areas with higher crime rates are typically considered higher risk for insurers, so you may be paying 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 auto insurance companies to factor in your insurance-based credit surcharge when calculating your rate. If you pay bills late or don’t pay at all, or if you have other blemishes on your credit report, your auto insurance company may consider you a higher-risk driver. This usually means that you pay 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. 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 may not offer a policy 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 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. Minimum coverage car insurance is generally cheaper, but offers less coverage. Full-coverage auto insurance tends to be more expensive, but offers more coverage while you’re on the road. Any additional types of coverage you add to your policy, be it roadside assistance, gap coverage or anything else, can also increase the cost of your auto insurance.
How to find cheap car insurance
To find cheap auto insurance, it can be helpful to start by comparing quotes from different auto 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 deductibleNote: 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: Qualifying for a car insurance discount can reduce the cost of your premium.
- Request quotes from multiple insurance companies: Shopping for auto insurance is often the easiest way to find affordable auto insurance. It can be beneficial to get quotes from a few different companies so you can compare and find the best rates.
- Compare quotes per cover: 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 on both coverage and costs to ensure you get adequate coverage from your policy.
- Discuss your options with an insurance broker: You may also benefit from working with an independent insurance broker who can purchase a policy on your behalf and determine your insurance needs.
- Consider bundling your car and home policies: Bundling your insurance policies can result in significant discounts, so if you’re a homeowner, you may benefit from getting quotes for bundled coverage to see if it can help lower your premiums.