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.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.47% APR (with Auto Pay) to 7.59% APR (with Auto Pay). Variable rate loan rates range from 2.27% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of August 15, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/15/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.37% effective July 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.27% – 6.89%1||Undergrad & Graduate|
|2.27% – 7.75%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.24% – 6.67%4||Undergrad & Graduate|
|2.37% – 7.95%5||Undergrad & Graduate|
|2.46% – 9.24%6||Undergrad & Graduate|