How to get cheap car insurance

Here we’ll explain what you need to know to find cheap car insurance rates. Below we outline the steps to take that will save you money:

How to get cheap car insurance quotes

Full coverage: Savings by state for comparing auto insurance quotes

State minimum liability: Savings by state for comparing auto insurance quotes

Cheap car insurance companies in your state

Maintain good credit to get really cheap auto insurance

Keep your driving record free of violations

Buy state minimum liability or low liability limits

Raise your deductible

Ask for discounts

How to get cheap car insurance quotes

Comparing car insurance quotes to see which car insurance company is the cheapest will save you the most. Rates differ by hundreds of dollars among companies, which is why it literally pays to shop around for the lowest rate.  For instance, autoinsurancegeeks.com’s rate analysis found the following potential savings, or the difference between the highest and lowest price, for the same policy:

• State minimum liability – average savings of 153 percent, or $497
• Full coverage – average savings of 138 percent, or $1,127

When broken down by state, savings are even more significant in some cases. For full coverage, drivers in states with the highest average savings can trim $2,000 to $3,000 from their premium just by comparing rates and opting for the lowest one. But even in states where the savings are much lower, you can still avoid overpaying by $350 to $600 -- a 40 percent to 70 percent savings.

Full coverage: Savings by state for comparing auto insurance quotes

State minimum liability: Savings by state for comparing auto insurance quotes

Methodology:

autoinsurancegeeks.com analyzed rates for a 2016 Honda Accord with full coverage to identify the savings drivers can expect from shopping around. Rates were fielded from up to six major insurers for nearly every ZIP code in each state. The average savings is the dollar difference between the highest and lowest rates received from insurers, on average, for each state’s ZIP codes.

Cheap car insurance companies in your state

When shopping for car insurance, Penny Gusner, autoinsurancegeeks.com consumer analyst, says you need to decide how much coverage you need and compare quotes, and provides these tips:

• The cheapest auto insurance will always be just the amount you need to drive legally, your state minimum liability requirements. However, this doesn’t pay for damage to your car; it covers damage to other cars and property and pays for medical bills for those you inure in an accident. If your car is more than 10 years old or worth less than $3,000 and you have no or few assets, this may suffice.
• The recommended level of car insurance you should buy to ensure you don’t put your assets and savings at risk is full coverage. That includes $100,000 to pay for a person’s injuries you cause, up to $300,000 per accident, with $100,000 for property damage costs, with comprehensive insurance to pay for hail, fire, flooding and theft of your car and collision to pay for damage to your car, with a $500 deductible.
• Be sure to get quotes for the exact same coverage amounts from at least three insurance companies when comparing prices.

If you’re wondering which car insurance companies are the cheapest near you, autoinsurancegeeks.com’s rate data can help. Here we show average car insurance rates from major insurers, ranked from least to most expensive, for every state, for a full coverage policy.

Maintain good credit to get really cheap auto insurance

Aside from comparison shopping, keeping dings off your credit history and sustaining a high credit score is one of the best ways to get – and keep – affordable car insurance rates.  Drivers with poor credit pay an average of 69 percent, or $983 more for insurance than those with good credit, according to autoinsurancegeeks.com rate data. That’s higher than the hike to your rate (32 percent) for an accident you cause that hurts someone.

But no one’s perfect, so if you’re looking for the cheapest car insurance you can get with bad credit, here are how companies compare:

*Methodology: Calculations are rounded. Rates were fielded by Quadrant Information Services from up to six major insurers in 10 ZIP codes in each state for a driver of a 2017 Honda Accord, age 40, with full coverage and a $500 deductible.

Keep your driving record free from violations

Tickets for moving violations affect what you pay for car insurance, so part of keeping costs low is maintaining a clean driving record. Insurance companies check your driving history upon renewal or when you ask for quotes for a new policy, and use that information when pricing policies. Typically, it means higher rates if you’ve had accidents or been convicted for driving under the influence (DUI), speeding, failing to stop or yield or other traffic violations.  That’s why it’s important to check your driving record and fix it if you see any errors before shopping for coverage. However, each company assesses risk differently, so even with driving infractions on your record, you’ll save if you compare car insurance companies. Let’s break average increases for common moving violations and accidents by company:

Speeding 16 to 19 miles over the limit

One at-fault property damage accident over $2,000

Buy state minimum liability or low liability limits

One way to get the lowest possible car insurance premium is to buy just state required minimum liability  coverage. Liability insurance is commonly shown in the following format: 20/40/10. The first two numbers refer to bodily injury liability limits and the third number to property damage liability. In this example, 20/40/10 means coverage up to $20,000 for each person injured in an accident, up to a maximum of $40,000 for the entire accident, and $10,000 worth of coverage for property damage.

There’s no use in buying optional comprehensive and collision insurance if you have a car that’s not worth much or is very old. That’s because comprehensive and collision will only pay out up to the actual cash value of the car, minus your deductible.

Just bear in mind that liability insurance doesn't cover your own injuries or damage to your own property. Gusner never recommends carrying just the state minimum of liability, because in most states it’s not enough to protect you from potentially shelling out a lot of money if you cause an accident. Typically, buying higher liability limits doesn’t cost that much more. Consider the following, based on autoinsurancegeeks.com’s analysis of rates from up to six major insurers for nearly all ZIP codes:

• The nationwide average cost for state minimum liability coverage is $526
• Increasing that coverage to $50,000/$100,000/$50,000 averages only $561. So, you only pay another $35 a year by increasing your coverage.
• If you increase that to $100,000/$300,000/$100,000 with comprehensive and collision and a $500 deductible, that average goes up to $1,350, which is $824 more per year or $69 per month.

Raise your deductible

Another way to get cheap car insurance rates is to raise your deductible if you have a full coverage policy with comprehensive and collision. Deductible amounts typically are $250, $500 and $1,000 and is what you pay before your insurance company will fix your car after you file a claim. The savings you get from hiking your deductible depends on the amount you initially have compared to what you jump to, but averages about 18 percent. Note, however, that the reduction comes off your comprehensive and collision costs, not your total premium.

Ask for discounts

Finally, be sure you are getting all the car insurance discounts that you qualify for by following up with your current company or those that you are considering for a new policy. For instance, the insurer may have asked how many miles you drive and given you a low-mileage discount, but may not be aware that your teen driver meets the criteria for a good student discount.