Finding Affordable Car Insurance (2023)

Life has many great mysteries, but finding affordable car insurance is not one. This complete guide will help drivers find the cheapest car insurance policies and show you what to look for when buying coverage.

Fortunately, the process of comparing auto insurance quotes can be the easiest thing you do all week. Comparison tools gather quotes from dozens of insurers so you can compare all the companies in your area in one place.

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What is affordable car insurance?

Affordable car insurance is the best policy and price that match your budget and needs. The average rate of car insurance in the U.S. is $121 per month, according to Insurify’s internal database.

Factors That Affect Auto Insurance Rates

Many factors are at play when checking your car insurance rates, including driving record, type of vehicle, and location. Two similar people might have drastically different quotes based on the following circumstances:

Driving Record

A person’s driving history can significantly impact car insurance rates. Good drivers with a clean driving record typically enjoy some of the lowest rates for auto insurance. However, a history of at-fault accidents, moving violations like speeding tickets, reckless driving, or DUIs can cost drivers hundreds of dollars more in insurance premiums over six months.

Location

One of the first things insurance companies ask when you get a quote is your ZIP code. Depending on your area, you might have a higher or lower rate of theft, vandalism, accidents, and other factors. Where you live helps determine the likelihood of your vehicle being involved in an accident, vandalized, or stolen, which could affect your rates.

Vehicle Use

The more you use your car, the more opportunities there are for you to be involved in an accident, which could increase your rates. Cars driven for commuting to school or work are usually less expensive to insure than if you drive your vehicle for business purposes. And if you are a low-mileage driver, you might qualify for discounts.

Type of Vehicle

Newer, more expensive vehicles typically cost more to insure than older, less expensive vehicle models because they are more valuable and cost more to repair. Your vehicle type, make, and model may impact insurance costs.

Driving Experience

Teen drivers and beginner drivers generally pay higher premiums. Drivers with more experience behind the wheel typically have good driving habits. They’re less likely to have accidents than young drivers or motorists with less experience.

Age

Once a driver reaches age 25, car insurance rates usually decrease. Older drivers typically have better defensive driving skills based on having more years of driving experience. As a result, they are generally less likely to be involved in accidents.

Gender

Some auto insurance companies charge men more for car insurance since they tend to be riskier drivers. However, other insurers charge women—particularly middle-aged women—higher rates than same-aged men. In some states, the practice of charging one gender more is outlawed.

Credit History

Insurers can rely on your credit-based insurance score to determine how likely you are to file a claim. Drivers with a good credit score can pay significantly less for car insurance than drivers with a fair or poor credit history.

Insurance Coverage

Choosing full coverage that includes comprehensive and collision coverage will cost quite a bit more than buying liability-only coverage. Likewise, the lower your deductible is, the more you pay for car insurance.

Where you buy insurance coverage also matters. Companies consider factors differently—where one might place higher importance on driving history, another might offer lower rates to high-risk drivers.

How to Find Affordable Car Insurance

Fortunately, it is easy to find affordable car insurance from top insurers like GEICO, Nationwide, Allstate, State Farm, USAA, and Progressive. Here are a few quick tips to get you started:

• Shop for an online quote to compare prices. It’s free and takes a couple of minutes.

• Be aware of the factors that affect how much you pay for car insurance.

• Determine how much car insurance coverage you need.

• Weigh cost versus risk when choosing a deductible amount.

• Bundle your homeowners and auto insurance to get a multi-policy discount.

• Ask your insurance agent for other car insurance discounts.

Picking the Right Coverage

The type of coverage you buy significantly influences how affordable your premiums might be. Here are the most common coverage options for policyholders to customize car insurance:

• Liability insurance covers bodily injury and property damage liability. You can increase this coverage if needed.

• Comprehensive insurance pays to repair or replace your vehicle after non-collision events, like damage from hail, vandalism, or theft.

• Collision insurance pays for your car repairs after an accident.

• Uninsured and underinsured motorist coverage protects you if someone else’s insurance cannot pay for your losses.

• Medical payments and personal injury protection help cover hospital bills and loss of income.

• Gap insurance (for leased or financed cars) pays the difference between what your vehicle is currently worth and how much is left on your loan or lease in the case of a total loss.

• Rental reimbursement pays for a rental car while yours is being repaired.

Take on as much risk as you feel comfortable, and choose a deductible that fits your needs. For example, if you want the insurance company to take on more of the risk, you can have a lower deductible and higher auto insurance policy limits—but your policy will be more expensive. You can lower your costs by accepting a higher deductible and lower policy limits, but that doesn’t offer as much protection.

Risks of Cheap Car Insurance

The best car insurance isn’t always the policy with the lowest cost. Buying from one of the cheapest car insurance companies can save you a lot of money in the moment, but it can also open you up to risks.

Underinsured When Something Happens

If you have a severe accident and don’t carry enough insurance coverage, you might not be covered for all the costs. While it depends on where you live, because states have different minimum coverage guidelines, being underinsured could mean you don’t have enough coverage to repair your vehicle or pay for medical expenses if someone is injured.

High Deductibles Can Create Financial Hardship

Higher deductibles generally mean lower insurance premiums. But suppose you select a deductible that exceeds your savings and have to file a significant claim. You may not be able to cover the cost without taking a loan or asking friends or family for money to get your car repaired.

Poor Customer Service

Price isn’t the only consideration when choosing cheap car insurance. When you pick a more reputable insurance provider over one with lower ratings, you might pay a bit more, but reliable companies will be there for you when you need help the most. They provide good customer service and help process claims quickly.

Cheap prices and low ratings may lead to a car insurance company never paying your claim or being impossible to reach for help.

See More: Best and Worst Sites to Compare Car Insurance

5 Tips to Make Car Insurance More Affordable

You might think finding cheaper car insurance is one of the great mysteries in life. Fortunately, it’s not a big secret, nor is it difficult to get car insurance discounts. Here’s how:

Ask for Discounts

Car insurance companies often have discounts available for many drivers. Sometimes, they provide discounts automatically, but other times, you have to ask for savings.

Suppose you’re married and work from home, and you drive much less than when you bought the policy. Mention the situation to the agent and ask if there is a driver discount for low usage, low mileage, or marriage.

Other discounts can include safe driver, good student, bundling policies, multiple cars on the same policy, employment by a major employer, military member, or a member of a professional or affinity organization.

It never hurts to ask for a discount. Sometimes, you may discover savings that you didn’t know about before shopping for car insurance.

Consider Your Deductible

Deductibles are the amount you’re responsible for paying before the insurance company kicks in to cover a claim. Policyholders with higher deductibles take on more financial risk than those with lower deductibles. However, the risk can pay off in the form of lower car insurance premiums.

Accepting a higher comprehensive and collision deductible can save you hundreds if you feel comfortable paying more out of pocket in case of an accident or don’t drive much. If you can’t pay your deductible after an accident, you might get into financial trouble, so be sure to set it at a reasonable amount.

Don’t Buy More Coverage Than You Need

Buying more insurance than you need doesn’t always pay off.

Think about this: Suppose you drive an older car, and comprehensive insurance and collision coverage double the premium. It might not make financial sense to insure your vehicle at that level if it isn’t worth very much. Remember that insurers only pay claims up to your car’s value today, less the deductible.

Make sure your coverage level is sensible for the age of your vehicle, your driving frequency, and your financial situation.

Update Your Policy After Major Life Changes

Significant life changes sometimes mean cheaper car insurance. For example, your rates typically go down if you get married. If you move to a new city, or even a new ZIP code, you might also qualify for cheaper car insurance rates.

Anytime you experience a significant life change, shop for auto insurance quotes to see if you qualify for cheaper premiums.

Revisit Your Quotes Often

It’s a good idea to look for cheaper car insurance quotes at least once a year. Then, when your driving record improves or old violations drop off, it can provide you an opportunity to save hundreds of dollars.

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Affordable Protection for Peace of Mind

If you could do one thing today that would make car insurance cost significantly less, it’s shopping around for quotes—it can help you get the best cheap car insurance.

Even with a clean driving record, you may still be paying too much for car insurance if you skip comparison-shopping and just renew your old policy. A car insurance comparison tool can give you the peace of mind that you did your due diligence to find the lowest car insurance quotes available.

Frequently Asked Questions