How to Get The Best Rates on Auto Insurance

How to Get The Best Rates on Auto Insurance

Eight Ways You Can Save On Auto Insurance

Don’t be fooled by advertising or a commercial, just because a company claims to have the lowest rates, doesn’t make it true. There will be numerous companies in your area that would love to have you as a customer; this includes local smaller companies as well as the better known nationwide insurers.


#1 Don’t Believe Everything You See or Hear – Comparison Shop

The fact is no company can honestly state that they are the lowest price insurer. Insurance rates vary from one state to another and are based on your particular driving record, place of residence, miles driven per year and your credit record. Some insurers employ what is called “price optimization” or “elasticity of demand” this is a complex predictive model insurance companies use to determine your insurance rates based on how likely you are to switch your insurance company. This practice is banned in 16 states which include California, District of Columbia, Colorado, Connecticut, Delaware, Florida, Indiana, Maine, Maryland, Minnesota, Montana, Ohio, Pennsylvania, Rhode Island, Vermont, and Washington.

There is only one way to ensure that you’re getting the best possible car insurance rate and that’s simply to shop around and compare identical coverage and price in your area.


#2 Get Quotes from the Lesser Know Companies (Local)

When you’re comparison shopping make sure to get quotes from the smaller less well known regional companies in your area, they often have better rates and customer satisfaction ratings than the four major insurers; Progressive, Geico, State Farm or Allstate.


#3 Always Ask About Getting All the Discounts You Qualify For

Don’t forget to ask the insurance companies you get quotes from about their discounts for things such as; bundling your auto policy with others i.e. homeowner’s policy, renter’s insurance, multiple cars on one policy, safe driver discounts, going paperless, pre-pay your entire six months premium in full, have anti-theft equipment in your vehicle(s), or are a member of an organization or group that receive special discounts i.e. member of the military, AARP, AAA etc.


#4 Clean Up or Improve Your Credit Rating

Try to pay all your bills on time, unless you live in Massachusetts, Hawaii or California your credit rating will be an important factor in how much you will pay for car insurance. Check your credit at least once a year and try to improve your score to get better car insurance rates.


#5 Know What Your Insurance Will Cost You Before Buying a Car

When car shopping compare insurance costs for the different model cars you’re looking at. Though the car styles may be similar such as a sedan, SUV or compact model, the manufacturer can have a measurable impact on your costs to insure your vehicle. For example, a Toyota Camry can cost as much as $200 more per year to insure than a Honda Accord will. Don’t forget to consider this when budgeting how much your monthly car payment will be.


#6 You Can Save Money On Collision & Comprehensive

There are other ways to lower your insurance costs too. If you have a newer model car or your lender requires you to have comprehensive and collision on the vehicle you might want to consider raising the deductible. Depending on the state you live in studies have shown that consumers can save anywhere from $200.00 to $365.00 per year on insurance premiums by raising the deductible $500.00 to $1,000.00 or $500.00 to $2,000.00. Bear in mind though you’ll be paying out of pocket if you should need to file a claim.


#7 You May Want to Skip Comprehensive & Collision Completely

If the vehicle you’re insuring is old and/or in disrepair you may want to skip the comprehensive and collision altogether in your auto insurance policy. If the book value is low it typically doesn’t make sense to pay for comp and collision plus a deductible on an older model car.


#8 Sign Up for Usage Based Programs

Some states and major insurance companies such as Allstate, State Farm, and Progressive offer driving programs that track your driving. These programs offer discounts on your insurance rates to drivers who agree to allow the insurer the ability to track your driving habits electronically. Participants are rewarded with discounts in their insurance rates based on your good driving record, how many miles you drive per year, and when you drive.

Other companies such as Esurance or Metromile offer savings to customers who drive under 10,000 miles per year, but participation is very limited by the few number of states that offer these discounts; check with your insurance company.