How to Get Cheap Car Insurance: Everything You Need to Know

If you're wondering how to get cheap car insurance, it's helpful to understand that qualifying for lower rates depends on several factors, such as your driving record, your credit history, any discounts you may be eligible for, and the safety of your vehicle.

If you're wondering how to get cheap car insurance, it's helpful to understand that qualifying for lower rates depends on several factors, such as your driving record, your credit history, any discounts you may be eligible for, and the safety of your vehicle. Following a few simple tips can help you get the lowest possible rate without compromising on your coverage. First, ask about any discounts that may be available. Auto insurance companies offer a number of discounts, which can lower your rate.

According to Credit Karma, Nerdwallet, Compare, and the Balance, some of the most commonly offered discounts by auto insurance companies include:

• Bundle discounts (bundling your car insurance policy with other policies through the same company, such as homeowner's insurance or renter's insurance)
• Insuring multiple cars under a single policy
• A clean driving record discount
• A discount for paying the entire six-month or annual premium at once, or agreeing to have monthly payments deducted automatically
• Paperless (agreeing to receive all your pertinent policy documents online rather than by mail)
• Safety (Owning a vehicle equipped with certain safety or anti-theft features, such as daytime running lights, air bags, anti-lock brakes, etc.)
• A discount for members of a particular affiliate group or professional organization
• Military or veterans
• Good grades (Full-time students who have good academic records)
• Good driver (Having no accidents on your driving record for a specific number of years)
• Education (Taking a driver's education or defensive driving course)
• Federal employees (active or retired)

Although insurance companies may offer a lot of possible discounts, it is always best to compare rates from multiple companies to make sure you're getting the best deal.

The Balance also reports that a major factor in the cost of your car insurance is your credit score, unless you live in Massachusetts, Hawaii, or California, where laws are in place that restrict insurers from considering credit scores when establishing insurance rates. If you live in any other state, make sure to pay all of your bills on time and maintain a good credit score. This is a factor that insurance companies consider because their research shows that a credit score directly correlates with the chance of filing auto insurance claims.

If you drive an older vehicle, consider eliminating collision and comprehensive coverage on your policy. The comprehensive coverage on a policy pays to repair damage to your vehicle caused by animals, weather, fire, vandalism, and floods, as well as theft. The collision coverage pays for damage that results from another vehicle or an object. However, the maximum payout on both comprehensive and collision policies is the value of the car, so an older vehicle with a lower market value may not be worth covering with these more expensive policies.

Although some auto insurance companies spend a lot to advertise that their rates are the cheapest, you should never assume that they truly will offer you the lowest rate. No one company can provide the lowest prices to every customer, so compare rates from multiple insurers to find the best option for your specific situation.

Four major auto insurance companies – State Farm, Progressive, Geico, and Allstate – control over half of the automotive insurance industry in the United States. However, you shouldn't ignore regional and local insurers. Some of the smaller companies, such as Erie Insurance and Auto-Owners Insurance, can offer lower rates and many have higher customer satisfaction ratings than the major companies.

Another factor that impacts your total auto insurance cost is the deductible on the policy. If you include collision and comprehensive coverage on your policy, consider electing for a higher deductible on each to save money. The liability coverage on your insurance policy, which covers any damage you cause to others in a crash, does not have a deductible.

Additional factors that may impact your auto insurance rates include:

• The make, model, and year of your vehicle: More expensive cars cost more to repair and replace, so driving one can cause your rates to go up. Insurers may also look at data related to the same make and model, such as the safety and crash test results, theft rates, whether the vehicle tends to be in more accidents, and repair costs.
• ZIP code: In some areas, the rates of vehicle theft and accidents are higher than normal, so an insurance company may consider these factors when establishing rates.
• Driving history: If you have a clean driving record, you may qualify for a “good driver” or “safe driver” discount.
• Age and marital status: Insurers often review data that shows that these factors can impact the probability of automotive accidents.
• The number of miles you drive each month: If you put fewer miles on your car in an average month, you may qualify for a lower rate.

One of the best ways to get a good price on car insurance is to improve your driving habits. Safe drivers have fewer accidents. When a driver reduces the frequency of accidents on their driving record, thus reducing the number of claims they file, an insurance company is happy to lower their rates. Some insurance companies now offer mileage-based insurance to drivers who drive 10,000 miles or fewer per year. Examples of these insurance programs include:

• Metromile (available in eight states)
• Allstate's Milewise (available in 12 states and Washington, D.C.)
• Nationwide's SmartMiles (available in Illinois)
• Esurance's Pay Per Mile (available in Oregon)

It's also helpful to utilize price comparison tools online. When you compare rates from various companies, you can be sure that you're getting the lowest possible rate for the coverage you need. One option is Compare.com, which allows you to evaluate various plans offered in your area. This site includes both smaller, regional brands and major brands to help you perform a thorough and comprehensive search.

Some insurance companies also offer telematic devices, which are installed in vehicles to monitor driving habits. The device can detect whether you brake hard, swerve frequently, or engage in any other driving habits that could increase your risk of an accident. The data from this device is transmitted to the insurance company, and if it detects that you have safe driving habits, it may help you qualify for a lower rate.

Where you live also impacts the rate, even from the same company. For example, drivers in Alabama pay an average of $1,287 a year for a policy through Allstate, which is the state's lowest rate for those who don't have connections to the U.S. military. In the same state, the average rate for a policy through Geico is $487 higher.

For a driver in Oregon, the opposite is true as Geico offers the cheapest average rate of $1,221 and the average for an Allstate policy is $729 higher. In California, Esurance offers the cheapest policy at $1,196, on average, but New York drivers pay an average of $3,544 per year for the same policy.