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10 Tips for Finding the Cheapest Auto Insurance: A Comprehensive Guide

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Auto insurance is a legal requirement in most states, as it can save drivers, passengers and even pedestrians from substantial fees in case of a road accident. With projections of higher premiums in 2024, a lot of US drivers are understandably looking for ways to get cheaper insurance. 

The good news is that getting affordable auto insurance doesn’t have to mean worse coverage. Here are 10 tips for finding the cheapest auto insurance without compromising on coverage.

Red toy car under a red umbrella, meant to convey how auto insurance covers damages to a car and its occupants.

Tip 1: Compare Rates from Multiple Providers

The first thing on your list when searching for the cheapest auto insurance is to compare rates from multiple providers, at least once a year. Each insurance company will compute rates a little differently, so it’s important to shop around and find the best deal for your needs.

To make this process easier, you can get recommendations from insurance brokers who work with a diverse network of carriers. This allows you to get tailor-made recommendations from expert advisors who are up to date with the latest trends, and have years of experience matching insurance policies with customers. 

While insurance comparison tools are useful, they are miles away from being as accurate and helpful as human advisors.

Related: 6 Important Questions About Auto Insurance 

Tip 2: Increase Your Deductible

Your deductible is the money you have to pay before your insurance helps with the bills. If you choose a higher deductible, your monthly insurance cost goes down. But, be sure you’ve got enough money saved up to pay the higher deductible in case of an accident. 

Increasing your deductible can result in significant savings. According to Forbes, drivers who pay a higher deductible save between 7% to 28% a year on average.

This is especially true if you practice defensive driving, have a secure garage at home, and/or live in an area with less incidence of natural disasters. You still have insurance covering you in times of need, but you’re not paying a hefty monthly premium that isn’t being put into good use. 

That being said, accidents do happen, even to the most careful drivers. For best results, make sure to strike a balance between a deductible you can handle and affordable monthly payments to ensure that you’re not compromising on coverage. 

Tip 3: Bundle Your Policies

When you bundle your insurance policies, you’re essentially buying two or more types of coverage under the same insurance provider. To encourage this behavior, many insurance companies reward customers who choose to bundle their policies, typically through discounted rates and freebies. 

Bundling auto insurance with other forms simplifies your paperwork and dealings with a single insurer but also brings about some financial advantages.

Before committing to a bundled insurance package, it’s essential to carefully review the terms and conditions of each policy. Ensure that the coverage provided meets your specific needs and that the overall cost, even with the bundled discount, is competitive.

It’s also wise to periodically review your insurance needs and compare prices to make sure you’re still getting the best deal, as circumstances and rates may change over time.

Tip 4: Ask About Discounts

Insurance companies have ways to reward you for making safe choices. If you drive carefully and don’t have accidents or traffic violations, you might be eligible for a discount. You can think of it as a thank-you from the insurance company for being a responsible driver and making it easier for them to insure your vehicle.

Safety features in your car can make a difference too. Vehicles with things like anti-lock brakes, airbags, or anti-theft systems might qualify for discounts. These features make your car less risky to insure, so the insurance company might lower your costs.

The key is to ask your insurance provider about all the available discounts. They might have specific ones that apply to your situation. Keeping an open line of communication with them ensures you’re aware of potential ways to get the cheapest auto insurance you can find without compromising on coverage.

 

Tip 5: Choose a more sensible Car

The type of car you drive can impact your insurance rates. Sports cars and high-performance vehicles typically have higher insurance premiums than more practical models for several reasons.

First, sports cars with their powerful components make them more prone to accidents because they attract the type of drivers that are more likely to put pedal to the metal. This substantially increases perceived risk on the part of the insurer, resulting in increased premiums. 

Secondly, sports cars are more expensive to repair and maintain. Performance-oriented cars often have complicated parts that require specialized skills, and expensive parts, which contribute to increased premiums. 

Perhaps most critically, sports cars are very prone to theft due to their high value and desirability. 

If you want to get the cheapest auto insurance possible, consider choosing a practical car with a high safety rating and good fuel efficiency to save on insurance costs.

Tip 6: Maintain Good Credit Rating

Insurance companies account for a lot of factors when determining the rates for auto insurance, chief of which is your credit score. Your credit score reflects your creditworthiness and financial responsibility, and insurance companies use it as an indicator of how likely you are to file a claim.

Maintaining a good credit score can positively impact your ability to qualify for lower rates on auto insurance. Insurance providers view individuals with higher credit scores as less risky to insure, as they interpret a good credit score as an indicator of financial stability and responsible behavior.

In their eyes, a person with a solid credit history is more likely to make timely premium payments and less likely to file claims for accidents or damages. 

It’s important to note that not all insurance companies use credit scores in their rate calculations, and regulations regarding the use of credit information for insurance purposes can vary by location. However, in areas where it is a common practice, taking steps to improve and maintain a good credit score can be a strategic financial move.

To keep a good credit score, make sure to practice responsible financial habits, such as paying bills on time and managing credit responsibly. This way, you can save money on premiums and help qualify yourself for the cheapest auto insurance policies in the market. 

Tip 7: Drive Safely

Maintaining a safe driving record can help you qualify for lower insurance rates. As mentioned earlier, insurance companies reward good driving behavior with discounts so it’s always a good idea to avoid speeding, distracted driving, and other risky behaviors on the road.

While your insurance company is likely not checking your driving record in real time, they definitely do when it’s up for renewal. So if you’re due to renew your policy in the next few weeks, it’s a good idea to check in with the Department of Motor Vehicles and request for your personal Motor Vehicle Record (MVR). 

Doing this allows you to set expectations about next year’s premiums. If you have a clean driving record, then you will likely be paying around the same premiums. It’s worth noting that different states will have their own way of determining how long violations can stay on your record. 

Certain violations, such as a speeding ticket, might be removed from your record after a period of three years, but more severe infractions like reckless driving or a DUI could linger on your record for an extended period, possibly even indefinitely. If you want to get the cheapest auto insurance possible, make sure to drive safely and defensively. 

Tip 8: Consider Usage-Based Insurance

Usage-based insurance policies track your driving habits, such as mileage and speed, and adjust your rates accordingly. If you consistently exhibit cautious driving behaviors, follow speed limits, and maintain smooth acceleration and braking patterns, you are likely to be categorized as a low-risk driver.

This type of policy is particularly beneficial for those who do not drive frequently or have a shorter daily commute. Since the insurance rates are directly linked to the actual usage and behavior on the road, individuals with lower mileage and safe driving practices stand to gain the most in terms of cost savings.

One downside to usage-based insurance is that it requires a level of constant monitoring and sharing of driving data. Some individuals may have privacy concerns about having their driving habits tracked and analyzed by insurance companies. 

But if you’re not fazed by sharing a bit more data for potentially lower premiums, then usage-based insurance can be a good option. Just make sure to work with a reputable insurance company, and always read the fine print before finalizing your policy. 

Tip 9: Review Your Coverage Annually

Your insurance needs can change over time, so it’s important to review your coverage annually to make sure you’re not paying for more coverage than you need. 

Person holding a Personal Accident Claim Form, reviewing damage to a car's bumper.

One of the key reasons to review your insurance coverage annually is to account for any changes in your life.

Major life events, such as getting married or having children, might prompt adjustments to your auto insurance coverage. For instance, adding a new driver to your policy or upgrading to a family-friendly vehicle could influence your premium rates. Likewise, changes in your commute length or work location may impact your risk profile, potentially affecting your insurance costs.

Market conditions and your driving record also play a role in your auto insurance rates. Annual reviews offer an opportunity to explore any changes in rates or discounts that might be available. As mentioned earlier, if you’ve maintained a good driving record or if your vehicle has advanced safety features, you may be eligible for lower premiums.

Tip 10: Work with Independent Insurance Brokers

One of the key advantages of working with an independent insurance broker is the ability to access a diverse network of insurance carriers. Unlike agents who represent a single company, independent brokers have the flexibility to collaborate with multiple insurers. This diversity allows them to present you with a range of options tailored to your specific requirements, providing a comprehensive view of the available policies and their associated costs.

Navigating the intricacies of auto insurance can also be challenging, especially when deciphering policy terms, coverage limits, and deductibles. Independent brokers are well-versed in these matters and can serve as valuable resources in helping you simplify often nebulous jargon and give you actionable options. They take the time to explain your coverage options, answer your questions, and ensure that you have a clear understanding of the terms and conditions of each policy.

Frequently Asked Questions

Q: How can I find the cheapest auto insurance?

A: Comparing rates from multiple providers, increasing your deductible, bundling policies, asking about discounts, choosing the right car, maintaining good credit, driving safely, considering usage-based insurance, reviewing your coverage annually, and working with an independent insurance broker are all strategies that can help you find the cheapest auto insurance.

Q: Does getting the cheapest auto insurance mean receiving less coverage?

A: Not necessarily. By comparing rates and taking advantage of available discounts, you can find affordable auto insurance without sacrificing coverage.

Q: What factors impact auto insurance rates?

A: Factors that can impact auto insurance rates include your driving record, age, the type of car you drive, your location, and your credit score, among others.

Q: How often should I review my auto insurance coverage?

A: It’s a good idea to review your auto insurance coverage annually to make sure you have the right amount of protection for your needs. Life changes, such as a new job or a move to a new location, can also impact your insurance needs.

Conclusion

Securing affordable auto insurance does not need to be a daunting task. With these 10 tips, you can save on your auto insurance while still obtaining the coverage you require. It’s important to compare rates, inquire about discounts, maintain good credit, and review your coverage annually to guarantee that you’re receiving the best possible deal. With a bit of research and diligence, you can locate the most cost-effective auto insurance policy that meets your needs and stays within your budget.

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