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Expert Tips for Getting the Best Car Insurance Rates

Money Buys Safeguards Against the Unexpected
Money Buys Safeguards Against the Unexpected

Finding good, cheap car insurance can be stressful, but shopping for quotes is too important to not take it seriously. GOBankingRates spoke to experts about the most important factors you should consider when comparing car insurance companies and their policies. Learn what questions to ask so you can get the best cheap car insurance.

1. Consider the Cost of Insurance Before You Buy

When you shop for a car, you probably don’t think about the cost of insuring it until after you’ve driven off the lot. But the best time to consider the cost of auto insurance is before you head to the dealership, said Neil Richardson, a licensed insurance agent and product manager with The Zebra, an auto insurance comparison website. You need to pay extra attention when you’re buying car insurance for the first time.


“Insurance is a major factor in the total cost of ownership of a vehicle,” he said. According to The Zebra’s annual report on auto insurance, the average American pays $1,427 each year.

The most expensive car to insure is a Mercedes-Benz E Class CLS-Class at an average annual premium of $3,541 per year. The least expensive vehicle to insure is a Honda CR-V, at an average premium of $1,317 per year.

The difference between insuring those two cars is more than $2,000. That’s the cost of a relaxing getaway.

2. Your Credit Score Can Save — or Cost — You More

Maintaining a good credit score can pay off in big ways, including lower rates on your mortgage, credit cards and auto insurance. It’s worth it to improve your score, too.

“Credit plays a huge factor when it comes to car insurance,” Richardson said. That’s because people who are responsible with their finances are viewed as more likely to be careful behind the wheel.

The Zebra’s State of Auto Insurance Report shows the serious impact credit has on car insurance rates, Richardson said. Improving your credit from “poor” to “excellent” could lower your premium 44 percent.

Related: What Is a Good Credit Score, Anyway?

3. Teenagers Cost More Than You Think

If you have teens, you know they are expensive. That’s true whether you’re talking sky-high cellphone bills, designer clothes or auto insurance. If your teen is about to start driving, get ready for sticker shock.

Compared to other age groups, teens pay more than double for auto insurance, The Zebra report found. Although the national average annual rate for drivers ages 50-59 was $1,258, the national average for teens 16-19 was — you might want to sit down — $5,151.

Major reasons why teens pay more is because the age group has a higher rate of tickets and accidents, compared to other age groups, according to the report. The good news is that rates drop quickly when drivers are in their 20s and are half as expensive for a 29-year-old compared to a 20-year-old.

4. Your Neighbor’s Insurer Might Not Be Good for You

Your next-door neighbor just got a smokin’ good rate for his car insurance, so you figure that’s the best insurer for you, right? Wrong. In fact, you need to shop insurance companies if you want the cheapest insurance, Richardson said.

“Each company has a different target market based on age, credit, homeownership status and more,” Richardson said. “So the company that can offer you the best rate may not necessarily be able to offer your neighbor the most competitive rate.”

In fact, The Zebra study found a multitude of factors that determine your risk and rate. They include:

  • Credit score

  • Age, gender and marital status

  • Homeownership status

  • Level of education

The fact that insurance companies weigh these criteria differently underscores the importance of shopping around for a good rate.

Related: The Most and Least Expensive States to Own a Car

5. Don’t Carry Comprehensive and Collision Coverage on a Clunker

It’s fine to love that old car you’ve been driving since the Reagan administration. But frankly, it’s not worth the cost of premiums to keep it insured. Yes, you must keep your liability coverage. But if your car is a jalopy in the eyes of everyone but you, drop comprehensive and collision coverage, which reimburses damages to your car. If you don’t you’re just making a dumb insurance mistake.

“Drivers should reduce coverage on older cars because the value of that vehicle decreases with every mile and year that goes by,” Richardson said. “Once a vehicle reaches a value of under $4,000, it no longer makes sense to carry comprehensive and collision.”

That’s because the cost a driver would likely pay to insure the vehicle is probably higher than what the driver would receive from the insurance company if the vehicle were totaled. Instead of paying for comprehensive and collision, use the money to keep the car running longer than any of your friends and family think is wise for your image.

6. Some Safety Features Won’t Help Reduce Your Rate

If you’re counting on that fancy backup camera, blind-spot warning system or lane-departure warning gizmo to get you a discount on car insurance, think again, Richardson said. “An anti-theft device is really the only security feature on cars that has any impact on rates,” he said. “Crazy, right?”

Well, maybe not. According to statistics from the FBI, car theft has declined slightly in recent years, largely due to anti-theft technology motorists are using, said Richard Lewis, digital marketing manager for Elephant Auto Insurance.

“There are several highly effective security systems that you can install, but you should check with your insurer if it has to be one in particular to yield savings,” he said. “Once you do, you may be able to lower your insurance premiums by as much as 5 percent, depending on the insurer.”

7. You Need to Research the Company and Its Rates

The entire point of having car insurance is knowing your insurer will respond after you have an accident. For this reason, you shouldn’t base your decision on price alone: The cheapest car insurance might not necessarily be the best insurance.

“You should always consider the financial strength of the insurer and their record of service,” said Dale Sharpe Jenkins, lecturer of risk management and insurance at the University of North Texas College of Business and founder of The Jenkins Agency, an independent insurance brokerage and consulting firm. Companies such as A.M. Best rate and rank insurers in both of these areas, she said.

“When we buy insurance, we hope that we never need it,” Sharpe Jenkins said. “But when and if we do file a claim, we want to [know] the insurer has the financial strength to make us whole financially and to handle our claims with a good attitude of service.”

8. Discounts Are Not Automatic

Don’t assume your insurer will automatically give you every discount for which you qualify. The insurer will ask you to fill out a policy questionnaire that will be used to qualify you for discounts. But you should ask for a list of all discounts because there might be one or more that are not obvious from your application, Sharpe Jenkins said.

And there are probably more discounts than you think. Here’s a partial list from The Zebra’s insurance report:

  • Buying your homeowners or renters insurance from your auto carrier can save you 8 percent.

  • Purchasing your policy in advance can save you 10 percent.

  • Increasing your deductible from $500 to $1,000 can save you 11 percent.

Click through to learn the biggest do’s and don’ts when buying your next car.

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This article originally appeared on Expert Tips for Getting the Best Car Insurance Rates