How to Find Very Cheap Car Insurance

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Written by Sarah Sharkey Edited by Quiana Darden

Updated January 4, 2023

While you know you want to secure affordable auto insurance, the truth is you’re not exactly taught to do that. If you’re like many drivers, you’re a creature of habit. So, when looking for insurance, you get recommendations from friends or family, stick with the insurance company you’re used to, or choose a well-known company at random. None of those habits help you secure a lower car insurance rate. 

Thankfully, more drivers are starting to understand that these habits won’t cut it anymore – especially with the rising cost of auto insurance. 

Read on to learn how to improve your car insurance search to pay less and add strategies you can use to save on your premiums. 

Key Takeaways:

• Increasing your insurance deductible may result in lower premiums because you bear more financial burdens when you file a claim. 
• Check with your insurance company to see if they offer discounts for defensive driving courses, being a good driver, paying your premium in full, or driving a new vehicle.
• Consider a usage-based insurance policy if you use your vehicle sparingly. These policies will only charge you based on the miles you drive.
• Improving your credit can result in lower insurance rates because insurance companies will view you as more responsible and less of a liability.

Why What You Search Impacts Getting a Lower Car Insurance Rate

If you’re looking for auto insurance and type “GEICO” or another big-name insurance company in the search bar, you’ll see tons of information about it. And if that’s the first thing you search for and the premium happens to be an amount you can afford, odds are you’ll go with it. But it doesn’t mean you’ve chosen the right (or cheapest) insurance coverage.

The best way to start your search is to compare various auto insurance companies to see which can provide the best rate for your coverage. Instead of researching each company on the market individually (this would take hours!), you can use an auto insurance comparison tool to easily compare the rates of dozens of companies in minutes.

How an Auto Insurance Comparison Tool Works

While using an auto insurance comparison tool is just one way to get very cheap auto insurance, taking this step can save you tons. 

When you use one of these tools, you provide your personal information (i.e., name, driving record, vehicle) once, and they provide quotes from a long list of insurance companies. 

You can then narrow your search based on price to find cheap auto insurance companies that provide the level of coverage you need. 

Once you narrow down your search, you can research each company individually to ensure you find the right fit before selecting your new auto insurance company. 

Large Insurance Brands Can Drown Out the Competition

How many insurance companies can you name? 

We’re willing to bet you can only name some of the most well-known insurance companies that advertise on TV. That’s roughly 8 to 10 insurance companies. Care to guess how many insurance companies exist in the U.S.? There are hundreds!

It’s not probable that out of the hundreds of auto insurance companies on the market, those big names will always provide you with the lowest price. 

Aside from not knowing the names of other potential insurance providers, what keeps customers from buying from these other brands?

Perception.

To most consumers, you must not be credible if you can’t afford to advertise on TV (or choose not to). You must not be trustworthy. Those large insurance companies have done a fantastic job of training us to think this way. Unfortunately, that point of view is likely costing you money.

There are numerous reasons to go with a smaller insurance company. We won’t run through them in this article, but if you’re interested, we’ve discussed it briefly here. The point is that as long as an insurer is financially stable and provides quality customer service, there’s no reason to pass them up based solely on their popularity.

8 Tips to Get a Lower Car Insurance Rate

Let’s explore additional strategies for finding the cheapest car insurance on the market. 

Increase your deductible

Insurance companies determine your premiums based on several factors. One of those factors is your car insurance deductible. Insurance companies will charge less for your premium when you select a higher deductible. That’s because you’re taking on more of the upfront financial responsibility if you have to file a claim. Knowing you have to pay a $2,000 deductible instead of a $500 deductible might also make you think twice about filing a claim in the first place. Ultimately knowing drivers take on this mindset can save the insurance company money, and they bet on that. 

Before raising your deductible, ensure you’re ready for the increased out-of-pocket expense. Typically, it’s best to maintain an emergency fund with at least the amount of your deductible amount. Otherwise, you could be in a tough financial situation if you’re unexpectedly in an accident and have to pay your deductible before your insurance benefits kick in. 

Decrease Your Coverage

When shopping for car insurance, one thing to consider is the type of coverage you’re carrying. Although you’ll need to maintain a minimum coverage based on state laws, your other insurance obligations can change over time. 

For example, let’s say you finance a vehicle. While paying off the loan, your lender will usually require you to carry comprehensive and collision insurance on top of your minimum liability coverage. 

But once the vehicle is paid off, you’ll have the option to eliminate comprehensive and collision coverage from your insurance policy. Doing this will reduce how much you pay for your premium. 

Of course, removing extra coverage means you won’t have as much financial protection, and you’ll be on the hook for paying these expenses out of pocket. Considering that, weighing the cost savings against what you might have to pay after an accident is essential. 

Take a Defensive Driving Course

Many insurance companies offer discounts to drivers who take an approved defensive driver course. The reasoning is that after taking the time to learn more about safety on the road, you’ll be less likely to get in an accident. 

Since you’ll find many of these courses available online, it’s a relatively easy way to lower your car insurance costs and possibly remove negative points from your driving record if you have any. 

Seek Out Discounts

Car insurance discounts can lead to a significantly lower car insurance premium. You can save from 5 to 40% or more on your premium. These savings are worth learning where to look for a deal. A few typical offerings to keep an eye out for include:

• Safe driver discount: Staying out of accidents and avoiding tickets leads to a clean driving record, which can help you get a lower car insurance rate. 
• Good student discount: A student who earns good grades can save on their auto insurance premium – even on their parent’s plan. This discount is often extended to high school and college students who earn a B average. 
• Pay in full discount:  Paying your premium in full instead of enrolling in a monthly payment plan can help you lock in a discount. If doing so fits your budget, it might be worth the savings. 
• Safety features: Auto insurance companies might reward you with a discount if your vehicle has safety features that make you more aware of your surroundings. Safety on the road reduces your chance of an accident.
• Anti-theft devices: Similar to the safety feature discount, vehicles with anti-theft devices can help you save on your premium. If paying for comprehensive coverage involves coverage in case of theft. 

Look at Usage-Based Insurance

Usually, insurance premiums are based on an estimated amount of miles driven. But if you drive fewer miles than the average person, usage-based insurance can help you lock in significant savings. 

When you secure usage-based auto insurance, the company will assign you a base rate you must pay each month. Beyond the base rate, you’ll pay an additional amount per mile you drive. 

Although not the right fit for everyone, usage-based insurance could help you get a lower car insurance rate if you don’t drive much.

Improve Your Credit Score

Insurance companies often take your credit history into account when determining premiums. Generally, drivers with a high credit score will pay lower car insurance rates than those with a lower credit rating. 

Credit information helps insurance companies assess the likelihood that you’ll pay your auto insurance premiums on time. If you have a poor credit score, there’s a higher chance that the company will have to spend time and energy tracking down your payment. The greater insurance premium for drivers with poor credit is designed to offset that risk. 

Consider a Vehicle’s Average Insurance Costs Before Buying

The vehicle’s model and age significantly impact your auto insurance rates when insuring a car. After you’ve bought the car, there’s not too much you can do about the cost short of selling the vehicle. But before you make a vehicle purchase, it’s a good idea to check out the average rates for the models you are considering. 

For example, new sports and luxury cars are often more expensive to insure. But certain older model vehicles may come along with more affordable monthly premiums. 

Participate in a Safe Driving Program

Many major insurers offer driving discounts to those who agree to share information about their driving habits. 

This is typically done when you agree to add a particular app to your phone or a small tracking device to your vehicle. 

The device will track your driving behavior. It looks at information, including your speed, the time of day you drive, how you brake, and more, to give the insurance company a better picture of who you are as a driver.  

If the program deems you a safe driver, you could lock in lower premiums to help you get a lower car insurance rate.

The Bottom Line: Don’t be a Sucker for Advertising

You’ll find the advice to be virtually universal on how to find very cheap car insurance. Nearly every finance blog and talking head will tell you that comparison is how you get the best price and save money. 

Brand loyalty isn’t necessarily doing you any favors. Find out if you’re getting the best deal by securing your free quote for auto insurance.

Sarah Sharkey Auto Insurance Writer

Sarah Sharkey is a personal finance writer and auto insurance who loves diving into the details to help readers make savvy life choices. She has written for numerous publications, including Business Insider, SmartAsset, and Rocket Mortgage.