The days of affordable car insurance are long gone. With more drivers hitting the road each year, inflation and increased levels of auto incidents, premiums have risen significantly to all-time highs.
If your auto insurance coverage is stretching your budget thin, you’re likely interested in ways to reduce your out-of-pocket costs. This guide provides you with several strategies to get cheaper car insurance so you can give your wallet a break.
Understanding Auto Insurance Costs
Car insurance provides a layer of financial protection if you’re involved in an auto accident or if your vehicle is stolen, vandalized or damaged by certain natural disasters. But it can come at a hefty cost, depending on your insurance provider, coverage levels, deductibles and several other factors.
What Factors Influence the Cost of Auto Insurance?
Here’s a closer look at what insurers consider when computing auto insurance premiums.
Location
Your ZIP code affects your auto insurance rates. Urban areas generally have higher rates due to more traffic, accidents and theft. However, rural areas tend to have lower premiums. Some states have different regulations and insurance requirements, which can also impact car insurance costs.
Credit History
A strong credit score can significantly lower your auto insurance rates. Insurers believe that drivers with better credit are less likely to file claims. If your credit history shows timely payments and low credit card balances, you might receive lower premiums. Unfortunately, poor credit can lead to higher car insurance rates if you live in a state that allows insurers to consider credit-based insurance scores when setting premiums.
Age
Younger drivers—especially those under 25—generally get the shorter end of the stick, as insurance providers consider them high-risk due to their lack of experience on the road. But more experienced drivers typically qualify for better rates.
Gender
Gender can also affect what you pay for coverage. Research shows that male drivers, particularly younger ones, are more likely to be involved in an auto accident. So, they often pay more for coverage than females. But the gap typically shrinks as drivers get older.
And in some states, gender may not be a determining factor at all. In fact, this practice is prohibited in California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennslyvania.
Marital Status
Being married can lower your auto insurance premiums. Statistically, married people are less likely to be involved in accidents and file claims. Insurers may view them as more stable and responsible. Therefore, they often offer lower rates to married individuals compared to their single counterparts.
Driving Record
A clean driving record is vital to secure lower insurance premiums. But if there are moving traffic violations, auto accidents and DUIs present on your record, you could pay more for coverage. Remember, insurance providers assess our driving record to assess risk, so keeping it clean can help you save a bundle.
Claims History
Filing frequent claims can increase your insurance costs. Insurers see drivers who file multiple claims as high-risk. Even if the claims are for minor issues, the frequency can lead to higher future premiums.
Extent of Coverage and Deductibles
The type of coverage and your chosen deductible significantly affect your insurance costs. Full coverage offers comprehensive and collision, providing more protection but at a higher cost. A higher deductible can lower your monthly premiums, but you’ll pay more out-of-pocket if you need to file a claim.
Vehicle Make and Model
Insurers also consider the make and model when setting premiums. Luxury cars, sports cars, and newer models generally cost more to insure due to higher repair costs and theft rates. However, safe and reliable models with strong safety ratings can lead to lower premiums.
Mileage
The more you drive, the greater your chances of being involved in an accident. Insurers consider annual mileage when setting rates. If your daily commute is lengthy or if you frequently take long-distance trips, expect to pay more for coverage. But if you don’t drive often, you’ll likely get more affordable premiums due to the reduced level of risk you pose to insurance providers.
Ownership Status
Whether you own or lease your car also affects your insurance premiums. Leased or financed vehicles often require full coverage by lenders, resulting in higher costs. If you own your car outright, you have more flexibility to choose your coverage levels, potentially reducing your premiums. Be careful not to skimp on coverage, though, as it could hurt you financially later on down the line if you’re involved in an auto accident.
The Importance of Comparing Auto Insurance Quotes
You can save a bundle on premiums by shopping around and comparing quotes from several providers. Doing so could take time that you may not have if your schedule is tight. So, consider using the Experian Insurance Marketplace to do the work for you. This free tool shops your information to more than 40 providers in the Experian network, gathers quotes and presents you with the best deals.
If you choose a policy, Experian will help you cancel your existing policy, obtain any refund you’re entitled to and switch over to the new provider. You’ll also receive updates any time rates change in your area, along with helpful tips to help you maximize cost savings on auto insurance over time. Visit the website to learn more about this service and other valuable resources Experian offers. You can also sign up in minutes to get started, create a free Experian account or check your Experian credit report for free.
Who Has the Cheapest Auto Insurance?
These providers offer the cheapest annual premiums on car insurance policies for good drivers:
- USAA: $1,364
- Nationwide: $1,436
- Travelers: $1,521
- Geico: $1,594
- Erie: $1,642
If you’ve recently received a speeding ticket, been involved in an auto accident or received a DUI, these insurers may be your best bet for affordable coverage:
- Speeding ticket (average annual cost):
- USAA – $1,661
- Nationwide – $1,878
- Erie – $1,899
- Travelers – $2,062
- Geico – $2,150
- Auto accident (average annual cost):
- USAA – $1,958
- Erie – $2,224
- Travelers – $2,293
- Nationwide – $2,337
- State Farm – $2,428
- DUI (average annual cost):
- Progressive – $2,307
- USAA – $2,604
- Travelers – $2,610
- Erie – $2,665
- State Farm – $2,716
If you’re a young driver, senior or have bad credit, these insurers offer the cheapest premiums on auto policies:
- Young driver (average annual cost):
- USAA – $2,368
- Erie – $2,575
- Travelers – $2,638
- Geico – $2,781
- Nationwide – $2,881
- Senior (average annual cost):
- Nationwide – $1,402
- USAA – $1,455
- Travelers – $1,668
- Geico – $1,793
- Auto-Owners – $1,813
- Bad credit (average annual cost):
- Nationwide – $2,051
- USAA – $2,450
- Geico – $2,482
- Travelers – $2,699
- Progressive – $3,221
- Age (average annual cost):
- 16 to 17 – $3,958
- 18 to 19 – $3,284
- 20 to 24 – $2,653
- 25 to 34 – $1,672
- 35 to 44 – $1,498
- 45 to 54 – $1,401
- 55 to 64 – $1,285
- 65 to 74 – $1,273
- 75 to 79 – $1,412
- 80 and over – $1,588
*Source: Forbes Advisor
How Can You Find the Cheapest Auto Insurance Available
These strategies can help you identify the best deals on car insurance coverage.
Shop Around for Quotes
Do your research to identify providers offering the most affordable premiums. Compare quotes and leverage tools, like Experian’s Insurance Marketplace, to simplify the search process.
Bundle Policies
Bundling policies means combining multiple types of insurance with one provider. Many insurers offer discounts if you get auto, home, or life insurance together instead of patronizing several companies.
Maintain a Good Credit Score
Insurers often use credit scores to assess risk in states where this practice is permissible. So, a good credit score can lower your insurance rates. Paying your bills on time, reducing your debt load, and only applying for credit as needed can help improve your score. Also, keep tabs on your credit report by reviewing it often and promptly disputing any errors that could be dragging your credit score down.
Choose the Right Coverage
Selecting only the coverage you need can reduce costs. While full coverage offers more protection, it also costs more. Evaluate your financial situation to determine what you can afford. For safe drivers with older models, minimal coverage may be sufficient. Be sure to consult with your insurance agent to ensure you choose a policy with adequate coverage.
Take Advantage of Discounts
Many insurers offer various discounts. Look for discounts based on your driving habits, vehicle safety features, or membership in certain organizations. USAA provides military discounts. Others might have discounts for students, seniors, or safe driving. Always ask your insurer what’s available.
Review and Adjust Your Policy Regularly
Regularly reviewing your policy helps ensure you’re getting the best deal. When circumstances change, be sure to notify your insurance provider so they can update your policy accordingly. Events like adding a new driver or changing vehicles can affect your rates.
State-Specific Considerations
Auto insurance rates can vary significantly by state. Factors such as provider competition and local regulations affect the price you’ll pay for coverage.
Cheapest Providers by State (Average Annual Premium)
- Alabama: Geico – $322 (minimum coverage); Travelers $1,276 (full coverage)
- Alaska: Geico – $248 (minimum coverage), Geico – $1,457 (full coverage)
- Arizona: Geico – $443 (minimum coverage), Travelers – $1,375 (full coverage)
- Arkansas: The Hanover – $242 (minimum coverage), USAA – $1,559 (full coverage)
- California: Geico – $430 (minimum coverage), Progressive – $1,843 (full coverage)
- Colorado: Southern Farm Bureau Casualty – $233 (minimum coverage), American National – $1,199 (full coverage)
- Connecticut: Geico – $512 (minimum coverage), Geico – $1,631 (full coverage)
- Delaware: USAA – $477 (minimum coverage), Travelers – $1,291 (full coverage)
- Florida: Geico – $928 (minimum coverage), Progressive – $2,501 (full coverage)
- Georgia: Encompass – $517 (minimum coverage), Esurance -$1,758 (full coverage)
- Idaho: American National – $193 (minimum coverage), USAA – $778 (full coverage)
- Illinois: Mercury- $295 (minimum coverage), Hastings Mutual – $1,047 (full coverage)
- Indiana: Pekin – $268 (minimum coverage), Hastings Mutual – $795 (full coverage)
- Iowa: Hastings Mutual – $183 (minimum coverage), Hastings Mutual – $696 (full coverage)
- Kansas: USAA – $328(minimum coverage), USAA – $1,607 (full coverage)
- Kentucky: Kentucky Farm Bureau – $394 (minimum coverage), Kentucky Farm Bureau – $1,002 (full coverage)
- Louisiana: Geico – $503 (minimum coverage), Southern Farm Bureau – $2,722 (full coverage)
- Maine: USAA – $250(minimum coverage), USAA – $916 (full coverage)
- Maryland: USAA – $656 (minimum coverage), Nationwide – $1,350 (full coverage)
- Massachusetts: State Farm – $224 (minimum coverage), State Farm – $738 (full coverage)
- Michigan: Wolverine Mutual – $273 (minimum coverage), Hastings Mutual – $1,424 (full coverage)
- Minnesota: North Star Mutual – $399 (minimum coverage), Allied – $1,451 (full coverage)
- Mississippi: State Farm – $329 (minimum coverage), USAA – $1,690 (full coverage)
- Missouri: USAA – $325 (minimum coverage), USAA – $1,575 (full coverage)
- Montana: USAA – $198 (minimum coverage), USAA – $1,244 (full coverage)
- Nebraska: USAA- $306 (minimum coverage), Auto-Owners – $1,442 (full coverage)
- Nevada: Geico – $348 (minimum coverage), Geico – $1,420 (full coverage)
- New Hampshire: MMG – $239 (minimum coverage), MMG – $980 (full coverage)
- New Jersey: Selective – $420 (minimum coverage), Travelers – $1,482 (full coverage)
- New Mexico: Central Mutual – $235 (minimum coverage), USAA – $1,379 (full coverage)
- New York: Main Street America – $546 (minimum coverage), Main Street America – $1,472 (full coverage)
- North Carolina: State Farm – $424 (minimum coverage), Progressive – $1,216 (full coverage)
- North Dakota: Nodak – $205 (minimum coverage), Allied – $969 (full coverage)
- Ohio: USAA – $258 (minimum coverage), Hastings Mutual – $825 (full coverage)
- Oklahoma: Mercury – $296 (minimum coverage), American Farmers & Ranchers Mutual – $1,709 (full coverage)
- Oregon: Oregon Mutual – $496 (minimum coverage), Oregon Mutual – $1,039 (full coverage)
- Pennsylvania: Erie – $325 (minimum coverage), Allied – $1,279 (full coverage)
- Rhode Island: State Farm – $470 (minimum coverage), State Farm – $1,595 (full coverage)
- South Carolina: American National – $213 (minimum coverage), American National – $574 (full coverage)
- South Dakota: USAA – $210 (minimum coverage), Allstate – $1,791 (full coverage)
- Tennessee: Tennessee Farmers Mutual – $272 (minimum coverage), Travelers – $1,199 (full coverage)
- Texas: Geico – $474 (minimum coverage), USAA – $1,826 (full coverage)
- Utah: USAA – $387 (minimum coverage), Nationwide – $1,146 (full coverage)
- Vermont: Union Mutual – $151 (minimum coverage), Union Mutual – $653 (full coverage)
- Virginia: Mercury – $370 (minimum coverage), Nationwide – $980 (full coverage)
- Washington: PEMCO – $167 (minimum coverage), Capital – $981 (full coverage)
- West Virginia: Westfield – $320 (minimum coverage), Encompass – $1,384 (full coverage)
- Wisconsin: Geico – $224 (minimum coverage), Travelers – $982 (full coverage)
- Wyoming: Geico – $169 (minimum coverage), State Farm – $1,315 (full coverage)
- Washington, D.C.: USAA – $424 (minimum coverage), USAA – $1,270 (full coverage)
*Source: Bankrate
State Regulations and Their Impact on Rates
State insurance regulations also influence auto insurance costs. More specifically, states with “no-fault” insurance laws often have higher premiums.
In New York, regulations regarding minimum coverage and uninsured motorist protection
contribute to the steep premiums. Lower-population states, like Virginia and Iowa, tend to have fewer accidents and lower payout amounts, thus keeping insurance premiums more affordable.
Regulatory frameworks that mandate specific coverage types also impact your rate. Some states require higher liability limits, while others may have more relaxed rules that lead to lower premiums.
The Role of Customer Service and Claims Processing
When evaluating auto insurance providers, look beyond the rates to ensure they have a track record of providing exceptional customer service. The speed at which they process claims is equally important.
Importance of Customer Service
Accidents are stressful, so you want an insurance provider that prides itself on offering exceptional service. Response time is equally important, as your time is valuable, and you need a provider that promptly addresses your calls and emails.
Car insurance providers with good customer service also communicate effectively. More specifically, they provide clear information about your policy details and help go the extra mile to make sure your coverages and any changes that might occur.
Speed and Efficiency of Claims Processing
The speed at which insurance claims are processed should also be considered. Remember, the longer the process takes, the more time it takes to get back on the road. For context, the average repair time in 2023 was 23.1 days, an increase due to repair shop backlogs and parts shortages, according to J.D. Power. However, you could experience much shorter processing times as conditions have improved in the past year.
A simplistic claims process is ideal. Look for companies with seamless online systems or easy-to-use apps that help streamline the process, making it less of a hassle for you.
Reliable claims processing can also mean fewer disputes and quicker resolutions. High satisfaction ratings in this area indicate that insurers handle claims fairly and effectively, contributing to a more positive experience during stressful times.
Final Recommendations on Getting the Cheapest Auto Insurance
Ultimately, you don’t have to stretch your wallet thin to afford car insurance. Instead, you can leverage the strategies mentioned in this guide to get cheaper rates. To recap, you want to shop around with various providers, bundle policies (if applicable), take advantage of discounts and maintain a good credit score. Most importantly, choose the right coverages and be sure to adjust your policy as your situation changes.
