Once you’ve spent a couple tens of thousands of dollars on a new car, the last thing you want to do is spend more money on auto insurance. We reviewed auto insurance quotes from national and local companies to provide consumers with tips on finding affordable rates. We'll compare quotes to highlight some of the cheapest auto insurance companies, explain why some policies are cheaper than others, and show how consumers can lower their auto insurance costs even more.
Cheap Auto Insurance Companies
Quotes for auto insurance have many variables, but your choice of insurance company is usually the most defining factor. National insurers typically provide coverage in every state, while local insurance companies only underwrite policies in a specific region or state. You should get and compare quotes from at least a mix of three local and national carriers so you can get good rates - the more companies, the better an idea you'll get of who has the cheapest car insurance. We'll start first with nationally available companies to be generally applicable to more drivers across the U.S.
We averaged quotes for a 31 year old single male, a 31 year old single female, a husband (29 years old) and wife (27 years old), and a senior husband (67 years old) and wife (65 years old) using data from our analysis of the cheapest car insurance in California. We used quotes from California as a benchmark because it is one of the largest states in the U.S. and as a proxy for the larger auto insurance market. The rates are an average of four different motorists, but it can give consumers an idea of how drastically quotes can vary between national insurers.
The cheapest national auto insurers using California data are USAA (specialty insurer for military members and their families), Progressive, GEICO, and Allstate based on our four example profiles. The average cost of insurance among the top four cheapest national auto insurers was $775 for our benchmark drivers, which was 17% cheaper than the average cost among the nearly 50 companies we analyzed. Insurance through Progressive was 14% lower than the state mean, while coverage through the most expensive company was 30% higher.
Your quotes will be tailored to your individual circumstances and coverage, but getting an insufficient number of quotes can result in missing out on affordable coverage for your vehicle. The graph above gives you a good idea about the best companies to begin your search for affordable coverage and the range of quotes available for auto insurance. Depending on your age, gender, driving history, and address, you might not find low-cost car insurance among these companies. Once you have an accident or two under your built, you'll be considered a high-risk driver, and these standard carriers will suddenly become quite expensive companies to insure with.
Cheap Car Insurance - Local & Regional
Comparing quotes for large, national insurance companies is a convenient way to find the cheapest auto insurance, but don't forget about the local and regional companies in your area. Adding local quotes gives you an even better idea about the affordable company options available to you.
The graph above shows six of the cheapest local insurers in California as an example. Some regional auto insurance companies only offer coverage in a certain coast or state, so you might not have access to these companies' insurance coverage. As you can see, some of the local insurers in the Golden State such as Wawanesa, Western General and Affirmative were generally lower in cost for our benchmark of four drivers than compared the national carriers. The three local providers ranged in cost from $700 to $726, beating out the three least expensive national carriers (who ranged from $815 to $845). CSE Insurance Group, the most expensive of the cheapest local insurers in California, was still 27% cheaper than Liberty Mutual, the most expensive national insurer out of the eight we reviewed.
All this goes to show that you can save a lot of money by just comparing quotes for different auto insurers, and to include a local company where available. When beginning your search for auto insurance we suggest you compare three local quotes to three national quotes to help you understand the full scope of prices available. Exploring all your different options, both nationally and locally, can help you find the cheapest policy.
How to Find Cheap Auto Insurance
Finding cheap auto insurance comes down to shopping around, being eligible for discounts, and improving your driving record. If you’re a safe driver with a moderate car (with safety devices), who hasn’t been in an accident recently or doesn’t drive exhaustively, you’ll probably qualify for cheap quotes. You could also be rewarded for your safe driving and be eligible for different discounts that will lower your premium. If you’re not already a safe driver, you could improve your driving record to decrease your premium.
Prices for auto insurance can change significantly based on your driver profile and your location. In order to find the absolute best auto insurance rates, you should cover your bases and get at the very minimum three quotes. Check out local insurers to see if they offer cheaper insurance than larger national companies.
Most national insurance companies automatically offer discounts to drivers who have been accident-free for a certain number of years and who always use seat belts. You can also qualify for discounts if you make your payments on time for 12 months straight. If your commute between work and home is less than 10 miles one way, or less than 8,000 miles a year, you could also be eligible for a low mileage and usage discount. You can also be eligible for discounts if you’re a good student, a senior or mature driver, a military and federal employee, or belong to a professional or academic organization. Insuring multiple vehicles on your policy can also qualify you for discounts.
Improving Your Driving Record
Most of us don’t have a spotless driving record, but there are still certain ways to lower your insurance premium and be eligible for discounts. By taking a defensive driving course, you could qualify for a 10-15% discount on your liability, collision, and personal injury or medical payments coverage. Many insurers accept defensive driving classes taken both online and in classrooms.
Additionally, if you manage to be accident free for a certain number of years, you’ll be eligible for an accident-free discount. If you maintain a clean driving record for a number of years, your insurance premium could decrease over time.
You might assume that after being loyal to the same auto insurer for years, you would be rewarded for your loyalty. The opposite can be a likely scenario, however: auto insurers might raise your premium based on the likelihood of you not shopping around for a new policy with another insurer. This practice is called “price optimization” and most customers don’t bother to change their policy due to a small increase in their premium. If you find that the difference is negligible to you, or not worth the time it takes to shop around, then staying loyal is a good option. If however, you've had several rate increases for no reason or beyond what you're comfortable paying, you might be a subject of price optimization. Compare auto insurance quotes from other insurers every two or three years if affordable premiums are important to you.
What Makes One Policy Cheaper than Another?
There are a few significant factors that could actually be making your policy more expensive. By matching your driver profile and driving record to their own claims statistics and experience, your auto insurer can extrapolate how likely your peer group is to file a claim, and charge you accordingly. If an insurer believes that you’re a safe driver with little chance of collision, you'll get lower quotes because they are less worried about your risk of resulting in a claims payout.
Additionally, your choice of policy coverage and limits has a significant impact on the price of your policy. Your premium will increase depending on the coverage you select. Typically the cheapest option is to only purchase the minimum coverage required by your state. However, if you select the most minimal limits of insurance, you’ll be sacrificing coverage and protection, which means that in a serious accident you might have to pay out of pocket for damages beyond your limits.
Finally, the type of car you drive could have an effect on your premium. If you drive a new, moderate car with safety features, you’ll be eligible for lower premiums and discounts. Driving an older car, or a car that is statistically more commonly involved in collisions or theft, could lead to higher premiums.