Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Written by

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 16, 2020

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Here's what you need to know...

  • Low car insurance rates are based on the policy owner’s vehicle, driving record, credit history, and location
  • Cars with expensive custom parts also tend to cost more to insure than standard models
  • Because the quotes are free, a number of options can be researched to find the best rates

Getting low car insurance rates is the goal of almost every driver, but few people know exactly what the insurance companies want.

The information below contains the seven secret areas that unlock the cheapest auto insurance rates.

Before you read this great information, enter your zip code above into our FREE car insurance comparison tool and get low car insurances rate Instantly!

Table of Contents

Cost of Car Insurance

Have you ever wondered how one person can pay thousands more than a neighbor for the same vehicle?

Car insurance rates vary for several reasons, including the insurance company’s underwriting standards and the driver’s claims risk.

Low car insurance rates are based on the policy owner’s vehicle, driving record, credit history, and location.

The rates also fluctuate based on the discounts applied to the policy, the chosen coverage limits, and the deductibles.

Type of Vehicle

The first secret to low car insurance rates is to select a dependable, low-risk automobile.

In general, new car insurance costs more to than used car insurance, luxury automobiles cost more than standard automobiles.

Cars with expensive custom parts also tend to cost more to insure than standard models.

At the same time, cars that are usually chosen by teen drivers, such as base model compacts, incur higher car insurance rates than the minivans, SUVs, and station wagons are typically chosen by families.

Any class of vehicle can earn low insurance prices by having the following features:

  • Anti-lock brakes
  • Daytime running lights
  • Airbags
  • Anti-theft device
  • Theft tracking system

When choosing which vehicles to purchase and insure, consumers can use a car insurance comparison site to obtain multiple quotes within minutes.

Because the quotes are free, a number of options can be researched to find the best rates.

Driving Record

The second way to save on car insurance costs is to maintain a clean driving record. Insurance companies reward people with safe driving behaviors and give them the good driving discounts.

The good news is that even people with minor accidents or moving violations can regain low insurance premiums after a waiting period of three to five years.

Customers who take defensive driving courses and driver training courses are often rewarded with additional savings.

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Credit History

Few drivers understand that bad credit can send insurance rates skyrocketing.

Through extensive analysis, insurers have determined that customers who fail to pay their bills on time are also more likely to submit high claims.

Since claims take money out of the insurers’ pockets, they charge more for risky credit profiles. On the other hand, policy owners with a history of using credit wisely can gain a savings of 5 –10 percent.

Because the importance of good credit varies from insurer to insurer, taking the time to compare car insurance quotes is crucial. There is a chance you could get cheap car insurance with bad credit.

Location

The fourth opportunity to get low auto insurance rates requires moving to select locations across the United States.

Car insurance companies track the number of accidents and thefts that occur in neighborhoods across the country.

Anyone who lives outside these high-risk areas can enjoy substantial savings.

As of 2010, the Insurance Information Institute had identified the following cities as the least expensive places to insure a vehicle:

  • Wapakoneta, Ohio
  • Fairfield, Ohio
  • Portland, Maine
  • Roanoke, Virginia
  • Lafayette, Indiana

The most expensive cities for car insurance had been ranked as Detroit, New Orleans, Philadelphia, Baltimore, and Miami.

Discounts

The fifth way to capture low premiums is to take advantage of all available car insurance discounts offered by the insurance company.

Common discounts include the following:

  • Multiple policies
  • Good student
  • Online statements
  • Low mileage
  • Group membership

By comparing multiple auto insurance companies, savvy shoppers can view a list of applicable discounts and get the lowest price.

Even if a discount is not advertised, insurers may be willing to negotiate the rates in order to earn your business.

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Coverage Limits

Adjusting coverage limits is yet another technique for getting low car insurance rates. Coverage is typically noted as three numbers, such as 25/50/10.

  • The first number is the maximum amount an insurer will pay toward one person injured in an accident. In this example, the insurer would pay up to $25,000.
  • The second number is the maximum the same insurer will pay for all injuries occurring in a single accident, such as the $50,000 seen above.
  • The third number represents the most the insurer will pay for property damage in that accident. In this case, $10,000 is the limit.

Each state sets its own minimum coverage requirements for auto insurance.

Lower limits come with lower monthly payments, but they can also leave the driver at risk for large out-of-pocket expenses after a major accident.

The simplest way to find the cheapest insurance company for a certain coverage limit is to submit a free online quote and compare the results.

Know Your Deductible

The final secret to reducing into low car insurance rates is to increase the deductible. The deductible is the amount a policy owner must pay before the insurance company will pay any money for a claim.

Most policies have one deductible for collision, which covers accidents, and another deductible for comprehensive, which is used for vandalism or wind/hail damage.

Because policy owners with high deductibles are agreeing to bear a large portion of the financial risk, they are given low car insurance rates.

Overall, getting low car insurance rates depends on the driver’s behaviors and the policy options selected during the application process.

To uncover the best deal on the coverage you need, start a car insurance comparison today. Enter your zip code below and compare car insurance for FREE!

References:

  1. https://midatlantic.aaa.com/driver-training/pennsylvania
  2. https://www.libertymutual.com/auto/car-insurance-coverage/car-insurance-calculator
  3. http://www.iii.org/media/facts/statsbyissue/auto/
  4. https://www.statefarm.com/insurance/auto/discounts
  5. https://www.progressivecommercial.com/coverages/property-damage/
  6. https://www.thebalance.com/understanding-minimum-car-insurance-requirements-2645473
  7. https://www.esurance.com/info/car/the-pros-and-cons-of-high-deductibles