How to Lower Your Car Insurance Rates
Consumers new to comparison shopping online may find shopping for low-cost car insurance quote difficult.
It’s smart to do rate comparisons yearly since rates change frequently. Just because you found the lowest rates six months ago other companies may now be cheaper. You can find a lot of misleading information regarding car insurance on the web, but by reading this article, you’re going to learn some guaranteed methods to slash your car insurance rates.
If you currently have a car insurance policy, you will be able to lower your premiums substantially using this strategy.
Shopping for the lowest cost coverage is not that difficult. But consumers must understand the way insurance companies compete online and use this information to your advantage.
Car Insurance Comparisons
The are a couple different ways to compare quotes from different insurance companies. The best method to find the lowest rates is to perform an online rate comparison. This can be done using a couple different methods.
- One of the best ways to get quotes for comparison is to use a rate comparison form (click to open form in new window). This easy form prevents you from having to do boring form submissions for every car insurance company. One simple form compares rates from all major companies. This is by far the quickest method.
- A different way to get quotes online is to take the time to go to each individual company website and request a quote. For instance, let’s assume you want rates from Auto-Owners, Safeco and GEICO. To get rate quotes you would need to go to every website and enter your information, which is why the first method is more popular. For a list of links to companies insuring cars in your area, click here.
However you get your quotes, make absolute certain that you use exactly the same information with every price quote. If you have different liability limits then you won’t be able to make a fair comparison. Quoting even small variations in coverages may cause a big price difference. And when comparison shopping, more quotes helps locate the best price.
Do you really save 40% when you switch?
Car insurance companies such as GEICO, State Farm and Progressive regularly use ads on TV and radio. They all seem to make an identical promise about savings if you move to their company. How can each company make almost identical claims? This is how they do it.
All companies have a certain “appetite” for the driver that is profitable for them. For example, a desirable insured could possibly be a mature driver, insures multiple vehicles, and has a high credit rating. Any new insured who meets those qualifications is entitled to the best price and most likely will save when they switch companies.
Consumers who don’t qualify for the requirements will have to pay higher prices and ends up with the driver buying from a lower-cost company. The ad wording is “drivers who switch” not “people who quote” save that much. That is how companies can truthfully state the savings.
Because of the profiling, it’s extremely important to get as many comparisons as possible. It is impossible to predict which insurance companies will provide you with the cheapest rates.
Educated Consumers Know How to Buy Car Insurance Cheaper
An important part of buying insurance is that you know the different types of things that come into play when calculating the price you pay for car insurance. Having a good understanding of what impacts premium levels enables informed choices that may reward you with lower car insurance prices.
Proper usage rating affects rates – The more you drive each year the more you will pay for car insurance. Most insurance companies apply a rate based upon how you use the vehicle. Cars and trucks left parked in the garage qualify for better rates than those used for commuting. Make sure your car insurance policy is rated on the correct driver usage.
Don’t cancel a policy without a new one in place – Driving your car without having proper coverage is a misdemeanor and your next policy will cost more because you let your insurance expire. Not only will you pay more, but being ticketed for driving with no insurance will get you a revoked license or a big fine.
Big city or small town – Living in a rural area can be a good thing when insuring your vehicles. Lower population translates into fewer accidents. Urban drivers regularly have much more traffic to deal with and longer commute times. Higher commute times means more change of being in an accident.
Your car’s features help determine rates – Owning a car with anti-theft technology or alarm system can help bring down rates. Anti-theft devices like tamper alarm systems, vehicle immobilizer technology and General Motors OnStar can help prevent car theft.
Policy add-ons can waste money – There are a lot of additional coverages that you can buy on your car insurance policy. Insurance for roadside assistance, towing coverage and term life insurance may be costing you every month. These may sound like a good investment when talking to your agent, but if they’re wasting money eliminate the coverages to reduce your premium.
How your age affects price – Older drivers are viewed as being more responsible, tend to file fewer claims and receive fewer citations. Teen drivers tend to be more careless behind the wheel and because of this, their car insurance rates are much higher.
Marriage pays dividends – Having a spouse actually saves money on your policy. It means you’re more responsible it has been statistically shown that married couples file fewer claims.
How credit affects car insurance rates – Credit rating is a huge factor in determining your rates. Drivers who have high credit ratings tend to be better drivers and file fewer claims than drivers who have lower credit scores. So if your credit history can use some improvement, you could pay less to insure your by improving your credit score.
Do you qualify for discounts?
Car insurance can cost a lot, but you may find discounts that many people don’t even know exist. Larger premium reductions will be automatically applied at the time you complete a quote, but a few need to be requested specifically prior to getting the savings.
- Sign Early and Save – Select companies give a discount for switching policies before your current expiration date. It can save you around 10%.
- Federal Employees – Being employed by or retired from a federal job can save as much as 8% with select insurance companies.
- More Vehicles More Savings – Insuring multiple cars or trucks on the same car insurance policy qualifies for this discount.
- Drive Safe and Save – Insureds without accidents may receive a discount up to 45% less than less cautious drivers.
- No Accidents – Good drivers with no accidents can save substantially as compared to bad drivers.
- Good Student – A discount for being a good student can get you a discount of up to 25%. This discount can apply up to age 25.
- Drivers Ed for Students – Have your child complete a driver education course in high school.
- Bundle and Save – When you combine your home and auto insurance with the same company you may earn up to 20% off your total premium.
- Anti-theft Discount – Cars that have factory anti-theft systems help deter theft and therefore earn up to a 10% discount.
- Pay Upfront and Save – If you pay your entire premium ahead of time instead of paying each month you may reduce your total bill.
- Anti-lock Brake System – Anti-lock brake equipped vehicles prevent accidents and earn discounts up to 10%.
It’s important to note that some of the credits will not apply to your bottom line cost. Some only reduce the price of certain insurance coverages like medical payments or collision. So despite the fact that it appears you could get a free car insurance policy, you won’t be that lucky. Any amount of discount will reduce your overall premium however.
Don’t assume everyone needs the same coverage
When choosing adequate coverage for your vehicles, there really is not a perfect coverage plan. Every situation is different.
These are some specific questions might point out whether your personal situation may require special attention.
- Do I need roadside assistance coverage?
- Who is covered by my policy?
- Are you required to get a high-risk car insurance policy?
- Should I rate my vehicle as pleasure use or commute?
- Is business equipment covered while in my vehicle?
- Can I get a multi-policy discount for packaging my home and auto coverage?
If you’re not sure about those questions but a few of them apply, then you may want to think about talking to a licensed insurance agent. To find lower rates from a local agent, fill out this quick form.
Smart consumers save more
Lower priced car insurance is available online and also from your neighborhood agents, and you need to price shop both to have the best rate selection. Independent agents can write coverage with regional insurance providers who may not provide the ability to get a quote online.
We just covered a lot of ways to compare prices online. The key concept to understand is the more quotes you get, the higher your chance of finding lower rates. Drivers may discover the best price on car insurance is with some of the lesser-known companies.
People who switch companies do it for any number of reasons including lack of trust in their agent, delays in paying claims, high prices or an unsatisfactory settlement offer. No matter why you want to switch, switching car insurance companies is easier than you think.