Cheap Car Insurance: How to Get Affordable Auto Insurance Rates
Thousands of people are overpaying for their car insurance each year without even knowing it. Are you one of them?
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Let’s face it, owning a car is expensive.
In fact, AAA estimates that the average monthly cost of owning a new car is over $700! Between fuel, repairs, routine maintenance, depreciation, and monthly loan payments, it’s easy to see why a lot of car owners are searching for ways to reduce their costs.
We all do our best when shopping for the best deal on a new car, or trying to find an honest mechanic in town, but a lot of people forget about one car ownership expense that can actually have quite a bit of flexibility in the price...insurance!
Even though I am barraged every day by TV commercials and banner ads with geckos, camels, women in white coats, and beloved characters from The Office promising to help me find cheap car insurance, I ignored those ads for years. I even have some of the jingles memorized. (For the best car insurance rates in town, call 1-800 General Now! 🎶)
With these ads on every channel, what took me so long to shop for the lowest car insurance prices? Part of me didn’t believe that different insurance carriers would actually be able to get me a lower rate. Another part of me just didn’t want to spend the time researching the best car insurance rates, and then have to deal with the paperwork and headaches of making the switch.
However, after doing a little research on all the different ways to find cheap car insurance rates, I discovered that it isn’t just possible; it’s also fairly simple. By paying closer attention to the details of my policy, and comparing rates of the top car insurance companies online, I was able to reduce my car insurance rates by $70 a month with just a few clicks.
In the spirit of saving money, we’ve put together a comprehensive guide for reducing your car insurance costs that could potentially save you hundreds of dollars a year!
How is My Car Insurance Rate Being Calculated?
There are lots of factors that influence your car insurance rate. First, you’ll decide how much coverage you want for vehicle damage and bodily harm. The more coverage you select, the more expensive your plan will be.
Other factors like: location, age, driving record, credit score, and the make and model of your vehicle are also determining factors insurance companies use to decide how much you’re paying a month for car insurance.
However, if you’re willing to do a little leg work, we’ll go over some discounts that you can take advantage of, and some strategies for lowering your monthly car insurance premiums.
Bi-Annual Car Insurance Rate Comparison
Getting car insurance comparison quotes from multiple companies is a great way to ensure that you are getting the best value for your money. Even if you are happy with what you are currently paying, we still recommend doing a rate check twice a year before your coverage renews just to keep your insurance carrier honest.
In the old days, you might have to call a few different 1-800 numbers, sit on hold, get the hard sell from some pushy salesperson, and then feel pressured to sign up on the spot.
But comparing affordable car insurance rates is quicker and easier than it has ever been. With just a few pieces of information, you can get a quote in minutes:
Review the Details of Your Car Insurance Policy Regularly
You should go through your policy often to make sure it’s still a fit for your current circumstances.
Maybe now your car is a little older and you’re not as concerned about protecting it with full coverage because it’s almost time for a new car. Or perhaps you moved to a new area with less traffic, and aren’t quite as concerned about getting into a fender bender.
This brings us to our next tip for finding cheap car insurance: updating your insurance carrier about changes in how many miles you’re driving.
Update Your Insurance Company About Reduced Mileage
When you signed up for your policy, you gave your car insurance company an estimate of how many miles you drive per year, and that estimation is used to help calculate your rate.
Obviously, the more miles you drive per year, the more opportunity there is for an accident to occur, and thus the higher your rate will be.
If you have recently moved, changed jobs, or had a major switch in your daily routine, you might not be driving as many miles now as you were previously– and updating your insurance carrier could lead to a reduction in your rates.
When you’re calculating how many miles you’re driving, it is very easy to overestimate. Try logging your miles for a month to get a better gauge on how many miles you’re actually traveling. My original estimate of 15,000 miles a year, turned out to be much closer to 8,000. I was able to find much more affordable car insurance after I realized how many miles I was actually driving.
Double Check Your Deductible
Put simply, your deductible is the total amount you would be expected to pay toward car repairs before your insurance kicks in and covers the rest of the damage. Selecting a higher deductible is a quick way to lower your insurance premiums, but keep in mind that in the event of an accident, a high deductible means you’ll be responsible to pay more out of your own pocket.
If your driving record is solid and you don’t have any accidents in your recent history, you may decide to opt for a higher deductible and roll the dice. This gamble could potentially save you up to 40 percent but is definitely not for the risk-averse.
Do you tend to back into poles, scrape your fenders, or routinely park your car in rough neighborhoods? It might be best to stick with a lower deductible and try one of our other strategies for finding cheap car insurance.
Keep an Eye on Your Credit
Your credit score can have a direct impact on your insurance rates, so it’s advisable to check your credit report often and make sure that there are no errors.
CreditKarma is a free service that performs what is referred to as a “soft pull” of your credit; meaning that you don’t have to worry that checking on your car might also have an adverse impact on it.
If you already know that you have bad credit and don’t need a report to tell you about it, then consider trying some credit repair techniques to get you back in good standing.
Choose Your Vehicle Carefully
Not surprisingly, one of the biggest considerations that go into calculating your car insurance rate, is the type of car you drive.
Obviously, an expensive car with expensive parts is going to be expensive to insure. However, an economy car can impact your monthly rate as well. Is your car a target for thieves because it’s easy to break into? You might have to pay extra for that too.
If you’re shopping for a new car, it’s wise to check into the insurance rates before you sign on the dotted line so you’ll have a better idea of your monthly expenses.
Car Insurance Discounts
You might be eligible for car insurance discounts right now without even knowing about it. The majority of car insurance companies offer a variety of discounts for their customers– but they don’t necessarily broadcast these discounts.
Things like a safe driving record, prepaying premiums, marital status, grade point average, safety equipment, and anti-theft devices are all things that could potentially lead to car insurance discounts. You read that right. Car Insurance companies join admissions counselors and helicopter parents as the small sliver of the population who actually care about your GPA!
Some of the bigger auto insurance providers like Progressive, State Farm, and Allstate even offer usage-based insurance for folks who drive a limited amount of miles annually.
If you haven’t already, you should regularly check in with your agent and make sure that you are taking advantage of all the discounts that you are eligible for.
Time to Shop Around
With how easy it is to compare car insurance quotes online, the insurance carriers know that they have to offer the lowest rates possible to compete for your business. What are you waiting for? Get a free quote to find cheap car insurance in your area!