Once you’ve decided how much auto insurance you need, it’s time to start shopping for a policy. Rates often vary widely from company to company for the same coverage, so it’s a good idea to compare auto insurance quotes from multiple insurers. For example, in California, rates for a good driver range from $1,668 (Wawanesa) to $3,940 (The Hartford), a range of around $2,270 for the same driver.
Here’s what you need to do to find the cheapest car insurance.
If you don’t shop around, you won’t know if your rates are the highest or the cheapest. Getting multiple quotes will help you find the most affordable car insurance company. You can find free quotes online or by working with an auto insurance agent. Independent insurance agents can provide quotes from multiple companies. Insurance quotes are always free.
2. Ask about discounts
Ask about car insurance discounts when you get car insurance quotes. You can typically lower your car insurance costs with discounts for:
- By “bundling” several insurance policies from the same company, such as car insurance and home insurance.
- Insure multiple vehicles with the same company.
- Qualifying for a great driver discount.
- If you have a student on the policy, get a discount if he is a good student.
- If you have a student on the policy, get a discount if he’s at school without a car (he usually has to be at least 100 miles away).
- Take a defensive driving course if you are 55 or older.
- Pay your auto insurance bill in full for the term rather than monthly.
3. Choose a higher deductible
Collision and full coverage have a deductible. The deductible is the amount of money an auto insurance company deducts from an insurance claim check.
The higher your deductible, the less insurance you will pay.
Here is an example. Let’s say you have an accident and your car suffers damage worth $2,000. If your collision deductible is $500, the insurer will deduct it from the settlement amount, so you will receive a check for $1,500 to cover the repairs.
If you decide on a high deductible, try to set aside some money for that deductible, so you have it on hand if you need to file a claim later.
4. Ask about the pay-per-mile policy if you don’t drive much
If you own a car, but take public transportation to work and don’t drive your vehicle much, check out pay-per-mile car insurance policies.
These policies charge a basic monthly rate as well as a rate per kilometer. They may be a more affordable option if you don’t spend a lot of time behind the wheel.
Let’s say your pay-per-mile insurance has a base rate of $40 per month and a rate of 5 cents per mile. If you drive 500 miles in a month, your monthly bill would be $65 ($40 plus 500 miles times $0.05).
5. Ask about usage-based car insurance
Usage-based insurance (UBI), also known as telematics, may look like pay-per-mile, but it’s quite different. With a usage-based insurance policy, the car insurance company closely tracks your driving and creates a driving score.
For example, a usage-based insurance program can track your speed, braking, acceleration, miles traveled, and time of day. The program will use a smartphone app or vehicle-connected device to track your driving.
These programs often come with an initial discount, and then you can save more depending on how you drive. But not every driver with UBI can save money. These programs are more suitable for excellent drivers.