When it comes to getting car insurance there are a number of things that you definitely need to think about. And if you’re finding car insurance for the very first time you probably have even more questions. After all, everyone talks about how confusing and complicated it is to buy insurance but that’s not always the case.
There are many factors affecting the cost of auto insurance. This is particularly significant for younger drivers. In this chart using data from The Zebra, you can see the dramatic difference in the average cost of minimum and full coverage for a 20 year old driver.
You can also see the difference incidents such as a one at fault crash, DUI or poor credit can impact the cost.
Now, there are some things you need to think about when it comes to buying car insurance. And that’s going to be based on factors like your vehicle and the level of insurance you want. So, let’s take a look at what you need to know.
1. Always Look for the Best Deal
You should never buy insurance from the first place that you look. Instead, you want to make sure that you are looking at several different insurance companies before you make your selection.
You can get a whole lot better deal by shopping around and getting a lot of quotes.
You may have seen a lot of commercials for different car insurance companies and you might even be certain that you know which one you want to go to, but that doesn’t mean you’re actually getting the best deal from that company. Even if someone you know has great coverage at a great price that doesn’t mean that company will offer you the same. And it definitely doesn’t mean that their prices for every type of insurance are going to be the same. You need to look around and see what’s really going to work best for you specifically.
Of course, you also want to make sure you’re comparing the right things. It’s easy to get caught up in comparing only the price of the insurance you’re being offered rather than looking at what you’re actually getting. You want to know that you’re getting an actual deal not that you’re getting less insurance for a lower price tag.
There are online services that will help you get the information you need and find out more about what’s out there and how to compare. You can put your details into the search and it will show you different options from several insurance companies at different rates. Not only that but you can edit some of the features and options to make sure you’re only paying for what you actually need or want. It also makes sure you’re comparing the same type of service all around.
If you’re really happy with the service you’re getting already (if you already have insurance) but you know you could get a better rate somewhere else you can let them know about it. Telling your current insurance provider the specifics of what you’ve been offered elsewhere is a great way to get a match or even better.
2. Know What You Drive
Do you drive a lot? Do you only drive within the same small area? You need to know how much you’re actually driving so that you can make sure you’re letting the insurance company know. If you don’t drive a lot you want to get an insurance plan that reflects that. In most cases you’ll be able to get a lower insurance quote because you are less likely to get involved in an accident if you don’t drive frequently and especially if you don’t drive far. You can estimate your weekly usage as well as your annual mileage to get a good idea of what you drive and show your insurance provider.
If you’re using your vehicle for a work commute it’s likely your insurance is going to cost more. If you use your vehicle as a work vehicle it’s going to cost even more still. That’s because it shows you’re driving more and you’re likely driving during busy times of the day, which makes you even more likely to get into an accident.
Make sure you let your insurance provider know all about how much you drive, when you drive and more. You want to let them know if you’re willing to put a mileage cap on your vehicle as well.
If you agree to only drive your vehicle for a set number of miles per year you could actually reduce the rate you pay for your insurance by as much as 5 – 10%.
And you can put a cap on only one of your vehicle if you choose.
3. Know What to Ask
You need to know what you’re getting into when it comes to car insurance and that can be difficult if you’ve never bought it before. You’re less likely to know what you should be asking. But you need to make sure you’re looking at all of the questions we mentioned and that you’re asking about any potential discounts or ways that you could save money.
Also ask specifically about military discounts, employee discounts and student discounts.
4. Ask About a First-Time Discount
If you’re just starting out with a company you want to know about the different discounts that they have available and that may be:
- Student discounts
- New driver discounts
- Refresher/defensive-driving course discounts
- Online statement discounts
- Clean driving record discounts
- Membership discounts
- Yearly pre-payment discounts
5. Protect Your vehicle
There are a number of different things that you can do to protect your vehicle and make sure that it’s less likely to be damaged or stolen. Putting in a security alarm or tracking device can help you get a discount from your insurance company because it means your vehicle is safer. The same thing is true about living in a safe area.
Talk with your insurance company about specific things that you can and should do in order to get these types of discounts for yourself.
6. Choose a Good Company
Choosing the lowest price for your premiums is great for your wallet upfront, but it can be a big problem later on if you’re not careful. That’s because you could end up with a company that doesn’t actually have the ability to give you everything you need. Not to mention they might try to keep from giving you what you’re entitled to later on.
You want to look at any potential complaints or problems that the company has before you decide to work with them. Just because they have complaints doesn’t mean you need to skip them entirely, but you do want to evaluate them. You also want to make sure you look at the record of what’s called ‘claim refusal’ so you know what your chances are of getting your claim approved. Read our car insurance reviews – we've covered all you need to know.
One of the factors affecting the cost of auto insurance is age. Younger drivers are typically more likely to be involved in an accident or commit driving related offenses. This chart using data from The Zebra shows the average auto insurance costs for young drivers by company. It shows that while Travelers may offer the lowest rates on average for 25 year olds, it is not the cheapest option for 20 year olds.
This highlights the importance of shopping around for your specific circumstances.
7. Use Defensive Driving to Your Advantage
Taking a defensive driving class will allow you to learn more about how to drive in hazardous conditions and how to avoid accidents.
The courses are generally inexpensive overall, but they will give you a great discount of up to 15% for the next three years.
That’s definitely going to be a great deal. So, you want to make sure that you are talking to different insurance companies to find out what they offer and who is eligible for it. From there, you’ll be able to choose the right course and make sure that you complete it in a way that you can get the best discount possible.
You can also take driver training courses, aside from those that you take to get your license. You may be able to get a discount of up to 15% this way as well, which is definitely going to be worth the investment of the course. Just make sure that you talk with each insurance company to find out for sure.
8. Increase Your Deductible
If you’re willing to pay a little bit more when it comes down to an accident or a claim you can actually cut the price of your premiums each month.
If you have a deductible that’s around $250 (the lowest you can normally find) you’ll pay more in premiums each month. On the other hand if you have a deductible around $1,000 (the higher area where you will normally find) you will pay a lower premium each month.
For some the idea of a lower deductible is worth paying more for a premium. It means that you will spend less if there’s ever a claim that you need to make. You may want to pay a little less each month for a premium, however, so that you can pay less if you need to make a claim later on.
9. Find the Right Vehicle
Some vehicles are actually less expensive than others when it comes to your insurance. If you have a more expensive vehicle or one that’s going to be difficult to find parts for or replace you’ll spend more for your insurance. On the other hand a lower risk vehicle is likely to have a lower premium.
If you have a sports car with a large engine you’ll be considered part of the high risk category. That means you’re going to pay more in your premiums each month. If you have a smaller vehicle (but not too small) that has a whole lot of safety features you’re going to have a lower premium each month. For those who haven’t purchased their car yet this is something to consider.
10. Consider Voluntary Excess
Your insurance company doesn’t want to pay out and that means they’re going to give you a discount if they don’t have to or if they’re less likely to have to. If you pay more in what’s called voluntary excess you’re going to have a lower premium.
You will have to pay more if there’s ever a reason to take on a claim, however.
11. Keep Up Your Credit Score
You may not even think about how much your credit score affects your insurance and your premiums, but it’s absolutely a factor that the insurance company takes into account. They will look at your credit to determine whether you’re likely to have a claim.
At least, some insurance companies do this and you want to know which insurance companies are going to and which ones are not. You want to know where you can improve your credit and actually improve your chance of getting a lower premium.
If you keep your debt down and you make sure you’re paying all of your bills on time you will be able to get your insurance rates down slightly and you’ll definitely see better premiums overall.
Your credit score can play a crucial role in the cost of your auto insurance. This chart created using data from The Zebra highlights the dramatic difference in the average cost of auto insurance between good and bad credit.
Whether you are looking for minimum or full coverage, the chart shows that you can expect to pay almost double the rate if you have bad credit, compared to good credit.
12. Look at What You’re Getting Into
Many people skim through the terms and the policies that they are offered from an insurance company and simply sign on the dotted line. However that’s not a good idea. Instead, you want to make sure that you are reading carefully through everything in that policy so you know what you’re getting and what you’re paying. You want to know exactly what you’ve agreed to and what you’ve discussed is in the policy.
Know what kind of policy you’re getting and what kind of parts your policy covers (like new, new factory, aftermarket, etc.).
You’ll also want to know about what your responsibilities are, how much you are responsible for paying and what is or isn’t covered as far as the damage to the vehicle. All of these things will be in the policy, but you have to actually read through that policy to find:
- What is covered
- Who is covered
- What is excluded
- What limitations there are on the coverage
- How much coverage is offered
- How much the monthly premium costs
- How to report a loss/file a claim
- When coverage begins
Make sure that you talk with your insurance agent to find out more about everything to do with your car insurance, especially if you’re not quite sure. You want to know exactly what you’re getting into. That’s especially important if you’re a new driver looking for insurance for the first time.
Should I Buy Auto Insurance Online?
Although buying insurance online can be a viable option, it may not suit everyone. To determine if online insurance coverage is right to you, consider the pros and cons. To make informed decisions when searching for insurance, it is important to get as many quotes and information as possible. Insurance is a serious investment. It's important to understand what you are buying. If you know exactly what coverage you need, it's smart to shop for vehicle insurance online. Online shopping can save you both time and money. We recommend many national insurance companies that offer auto insurance rates online.
Online shopping can help you understand costs better. You can quickly compare the prices of different services by adding and deleting options that you like. And you can take your own time to ensure you get exactly what you need. Add options you like and eliminate those you don’t.
You can shop online for insurance anytime, anywhere, even in your jammies. Visit many suppliers quickly without needing to make appointments or get into your car. Once you have made your payment, you can download or print your insurance cards to you smartphone. You can then start driving immediately.
Online vehicle insurance is not for everyone. There are two steps to get a final price quote. Also, there may be a difference in the final estimate and the original price. These inconsistencies can't be avoided, but it is possible to anticipate them. Expect to pay more if you have been in an accident, or were penalized for moving violations in the past few years. Check your credit score before you apply for vehicle insurance. If your score is lower than perfect, expect to see a rise in premiums. If your credit score has a bearing on a premium increase, your insurer will notify you.