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How to find cheap car insurance

The best cheap car insurance for every type of driver

by Kate Williams, Ph.D. ConsumerAffairs Research Team
couple driving car

The auto insurance company with the cheapest up-front rate isn’t always the best deal for the long-term. You’ll shell out a lot more than your premium costs if you end up at-fault in an accident without enough coverage, even if you follow your state's minimum insurance guidelines.

Methodology: I started my research by reading about the National Association of Insurance Commissioners (NAIC) and the Insurance Information Institute. To find out what impacts insurance rates generally, I spoke with Dr. Theresa Vaughan, former NAIC CEO, Dr. Robert Klein, former NAIC Director of Research, and Dr. Robert Hoyt, co-author of “Risk Management and Insurance” (Cengage Learning, 2001, 2005).

1. Understand how insurance is priced and marketed

Every auto insurance company has a specific group of consumers they target, which is reflected in their advertising, their discounts and their quotes. Some insurance companies cater to high-risk drivers while others are more interested in selling to adults over 25 who own their own home.

Certain insurance companies, like State Farm and Liberty Mutual, charge more money because they offer premium customer service, which is important for many drivers. Drivers who are extremely price conscious and care less about customer service will want to look at insurance companies with direct selling such as GEICO, USAA and Progressive. These companies, and others like them, can charge a lower base price for premiums because they have lower overhead costs.

What factors impact your rate

Knowing what impacts your rate can help you recognize when you’ve found the right insurance company for your stage in life and when it’s time to find a new one.

  • How old you and the people on your policy are
    The ages of 25-65 represent a sweet spot in your life when you’re not too young and not too old to pose a risk for auto insurance companies. Generally, people under 25 and over 65 will pay higher insurance premiums because they are more likely to get into accidents.

    But don’t feel secure just because you’re right in the middle of this age range. Insurance companies can take into consideration the ages of all the insured people in your household, including non-blood relatives like a roommate. If you’re the parent of a teen driver and/or college student, there are discounts available.

  • The policy holder’s gender
    In general, men pay more than women for car insurance. Men are statistically more likely to exhibit risky driving behavior than women, including speeding, driving under the influence, neglecting to wear a seatbelt and getting into accidents.
  • What type of car you drive
    When it comes to the type of car you drive, your insurance rate comes down to risk. A larger vehicle is less likely to result in major injuries that will cost a lot of money, which is why it is generally less expensive to insure a minivan than a sports car. Trucks and large SUVs, however, are more likely than small cars to cause damage in an accident, so owners of these types of vehicles will likely pay more for liability coverage.

    Safety features are another major factor in how your car affects your premium, so vehicles with a high-safety rating are less expensive to insure compared with vehicles with low safety ratings.

  • Your marital status
    Many states recognize domestic partnerships the same way as marriages when it comes to auto insurance rates. Statistically, partnered drivers are safer drivers. They’re also more likely to have kids than single people, making them an overall lower risk for insurance companies.
  • Where you live
    Living in a rural area will lower your premium compared with living in an urban environment. Fewer people on the road means there’s less risk of you getting into a serious accident. Even moving from an urban center to a suburb can get you a lower rate.
  • Where you work
    Professions that tend to include a lot of on-the-job driving, such as a delivery service, caterer or journalist, will be quoted at a higher rate than an office worker who has a short commute. Certain professions such as police officers, paramedics and nuns allow for lower insurance premiums since these professionals are thought to be less risky drivers.

2. Raise your credit score

Your credit score affects more than your monthly car payments. It also affects your insurance policy. The lower your credit score, the more of a potential risk you are and so the higher your premiums will be. It seems unrelated, but studies have shown a correlation between a low credit score and a higher driving risk. This is just one more reason to pay your bills on time every month. Figure out how to fix your credit score, then shop around for more affordable car insurance rates.

woman pulled over by police

3. Take advantage of all available discounts

You can get all kinds of discounts from your insurance company. Talk to your agent to see which of the following discounts you qualify for and how adding up all your discounts will impact your premium.

  • Safe driver discount
  • Good student discount
  • Defensive driver discount (requires you to take and pass a defensive driving class)
  • Full payment discount
  • Affiliation discount
  • Anti-theft discount
  • Anti-lock brake discount
  • Distant/resident student discount (for students who live far away from their home and insured vehicle)
  • Early signing discount
  • Green vehicle discount
  • Low mileage discount
  • Loyalty discount
  • Military discount
  • Multi-policy discount
  • Multi-vehicle discount
  • Autopay discount
  • Newer vehicle discount

Be a safe driver

People with clean driving records can score a lower insurance premium than people who have accidents and speeding tickets on their record. But insurance companies are starting to take more of an interest in drivers’ general driving habits instead of just counting their accidents. A lot of insurance companies offer discounts to drivers who demonstrate good driving behavior with monitoring systems. The longer you go without an accident, the lower your premiums.

Bundle your insurance policies

Most insurance companies will give you a discount for holding multiple policies with them. Using the same company for your home, auto and life insurance can add up to big savings for you. So when you’re shopping around for auto insurance, make sure to ask how much it will cost if you also add on your homeowners and life insurance policies, along with any other policies you have on boats, motorcycles or other vehicles.

4. Work with a direct insurance company

Companies like Progressive, GEICO, USAA and eSurance are mostly online, though a few brick and mortar stores are popping up in areas with a high concentration of customers. This means they have less overhead and can pass that savings directly on to you, the consumer. This also means, though, that their customer service might not be as high quality as you will get when you deal with an insurance agent. If you’re more concerned with saving money than with being able to walk into a local agency and get help, go with a direct company.

5. Raise your deductible

Raising your deductible keeps your insurance premiums low without sacrificing coverage. Experts advise drivers to raise their deductible to $1,000 or more, provided they can absorb the cost of $1,000 in the event of an accident. This can be an especially good option for drivers with a short commute and people who don’t drive regularly, since the chances of getting into a serious accident lower the less you drive.

Raising your deductible is generally a better alternative to lowering your liability, which can save you money in the short-term but can end up costing you everything you have if you end up seriously injuring someone in an accident.

Bottom line

A lot of factors play into the rate of your insurance premium, which is why it can be such a challenge to find cheap yet reliable auto insurance. Make sure to get adequate coverage to keep you protected in the event of an accident, whether or not you’re at fault, and work with an auto insurance company that has the best discounts and bundles to save you money and keep you safe.

 Progressive logoLiberty Mutual logoPermanent General logo
Cheapest forSafe driversAdults with teensHigh-risk drivers
DiscountsMulti-policy, good driver, safe driver, multi-car, homeowner, sign online, paperless, online quote, teen driver, continuous insurance, good student, automatic paymentSafe teen drivers, multi-car, vehicle safety, hybrid vehicle, new graduate, good student, newly married, newly retiredGood students, driver training completion, transferring from another insurance company
Insuramatch partner
Customer satisfactionRead reviews about ProgressiveRead reviews about Liberty MutualRead reviews about The General
 Cheapest forDiscountsInsuramatch partnerCustomer satisfaction
Progressive logoSafe driversMulti-policy, good driver, safe driver, multi-car, homeowner, sign online, paperless, online quote, teen driver, continuous insurance, good student, automatic paymentRead reviews about Progressive
Liberty Mutual logoAdults with teensSafe teen drivers, multi-car, vehicle safety, hybrid vehicle, new graduate, good student, newly married, newly retiredRead reviews about Liberty Mutual
Permanent General logoHigh-risk driversGood students, driver training completion, transferring from another insurance companyRead reviews about The General
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by Kate Williams, Ph.D. ConsumerAffairs Research Team

As a member of the ConsumerAffairs Research Team, Kate Williams, Ph.D. believes everyone deserves easy access to accurate and comprehensive information on products and businesses before they make a purchase. She spends countless hours researching companies and industries before writing buyers guides to make sure consumers have all the information they need to make smart, informed buying decisions.