Are you shopping around for car insurance? You’ll find a variety of plans with a wide range of monthly premiums.
Before choosing a plan, make sure to compare quotes for the best price.
Read on for nine tips for finding affordable car insurance. With the right plan, you’ll have peace of mind while keeping costs low.
How to find affordable car insurance
1. Figure out what type of coverage you need
Most states require drivers to purchase some type of car insurance. The cheapest and most basic type is liability insurance. If you get in an accident, liability insurance covers damage to the other car. However, it doesn’t cover damage to your car.
A comprehensive car insurance plan covers a lot more. It pays for damages to your car from accidents, animal collisions, falling objects, weather, fire, or vandalism. It may also cover you in the event your car gets stolen.
Needless to say, comprehensive plans cost more than liability insurance. Let’s say you drive a Toyota Corolla in Massachusetts. You’re 30 years old and haven’t had an accident in the past five to 10 years.
At the time of writing, a liability insurance plan from Progressive would cost $98 a month. Comprehensive plans range from $217 to $223 a month.
With a comprehensive plan, you’ll be shelling out $1,500 more a year than you would with the basic plan. However, you’d be safe from big expenses in the case of an accident.
Spending money on insurance now can save you from future massive costs in the event of an accident. If you’re driving an old car, though, then it doesn’t make sense to invest that much money in it.
To decide what kind of coverage you need, you should balance the current market worth of your car with the cost of the plan. In other words, don’t spend more on insurance than you’d be willing to pay to repair your car.
2. Compare quotes from local and national insurance companies
There’s no shortage of car insurance companies out there looking to sell you a plan. But which one offers cheap full coverage auto insurance or liability insurance?
Unfortunately, there’s no cut and dried answer here. Some companies are cheap for experienced drivers but pricey for older drivers. Others have affordable car insurance in some states and not in others.
For some consumers, a national company is the way to go. For others, a small, local car insurance company would offer the best terms.
There are a variety of factors that go into your car insurance premium, like your age, driving history, credit score, type of car, and location. To find the most affordable car insurance plan, compare car insurance quotes online from local and national insurance companies.
Insurance companies like Geico, Allstate, Progressive, and State Farm give car insurance quotes online. You can also compare quotes from multiple companies at once with search engines like Esurance.com, CarInsuranceQuotes.com, and Insurance.com.
Finally, you may also be able to enlist the help of an independent insurance agent at no cost. Agents gain a commission from the insurance company when they refer new members.
3. Consider a high deductible
Like with health insurance, car insurance plans tend to be cheaper if you’re willing to pay a high deductible. The deductible refers to the out-of-pocket expenses that you’ll pay before insurance kicks in. if you have a $1,000 deductible, for instance, then you’d pay $1,000 of your own money before your insurance plan would start to cover costs.
Deductibles can be as high as $1,000 or more, but the most common are $250 or $500. The 30-year-old Toyota Corolla driver mentioned above could pay $217 for a plan with a $250 deductible. By increasing the deductible, the price would go down by $5 to $55 a month.
4. Check if your employer offers a plan
Some employers partner with car insurance companies to provide their with employees discounted plans. Of course, you should still compare quotes to make sure an employer-sponsored plan is your best option.
5. Boost your credit score
Many car insurance companies check your credit score before outlining the terms of a contract. The stronger your credit score, the more affordable your quote will be. Your credit score is based on factors like repayment history and outstanding debts. With on-time payments, you can boost your score into the good or excellent range.
6. Ask for discounts and deals
Car insurance companies offer all kinds of special discounts. To make sure you’re not missing out, ask what discounts are available. Car insurance companies offer discounts if you’re a safe driver, own an anti-theft device, are in the military, or sign up for automatic online bill payments. Some even give discounts to young student drivers for good grades.
7. Pay up-front, rather than month-to-month
Many car insurance companies reward customers for loyalty. If you’re willing and able to pay for six months or a year up-front, then you’ll get a more affordable car insurance plan than you would paying month-to-month.
The cheap full coverage auto insurance plan from Progressive mentioned earlier costs $217 month to month. If you paid six months at once, your cost would average out to $167 a month. After six months, you’d see a total savings of $300. If your finances allow, then you’ll save money in the long run by paying more up-front.
8. Look into usage-based insurance (UBI)
Do you have a car but don’t drive it very often? If your usage is minimal, then you could save money with a miles-based policy. These affordable insurance plans track your driving to make sure you’re keeping your mileage low with odometer readings or in-vehicle telecommunication devices (telematics). Most drivers install the telematics themselves, but other cars may have one that was originally installed by the car manufacturer.
9. Consider insurance costs when you go car shopping
Have you ever heard that red cars cost the most to insure? The color of your car doesn’t actually affect your insurance premium, but the make and model do. A new sports car is going to cost a lot more to insure than a 2010 Honda Civic. If you’re car shopping, then you must consider the cost of insurance along with the price of the car itself.
How to buy affordable car insurance
Once you’ve found the affordable car insurance plan that meets your needs and your budget, it’s easy to sign up online. You’ll enter your personal information, driver’s license number, registration information, and other details. After you’ve signed up, the company will send you your plan and an insurance ID card.
Be careful if you don’t recognize a company; some people have become victims of auto insurance scams. Check with the Better Business Bureau before sharing your social security number or bank account information.
Once you’ve set up your car insurance, you can set it and forget it as a monthly automatic payment. Make sure to check back with your insurer once in a while to see if you qualify for a better deal. For instance, if you’re not driving very much, then you may benefit from switching to a usage-based insurance plan.
Are you also looking for affordable health insurance options? Check out this article for three health insurance options.
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