July 13, 2020

Cheapest Car Insurance

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"I wish car insurance was more expensive," said no one ever.

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If you're anything like most people, you want the most affordable car insurance that gets the job done. It might even be tempting to go with your state's minimum coverage limits to cut costs.

But that's a bad idea. Any money you'd save would be completely wiped out in case of a serious accident. Even if you're a safe, defensive driver, an accident can happen to anyone.

Instead of cutting costs in the wrong places, look for car insurance companies with competitive rates and great discounts. See which insurers are the best for your budget below.

Here are some of the best, cheap car insurance companies:

Military Members: USAA

  • Average 6-month premium: $448
  • Pros: Lowest prices, great service, high customer satisfaction
  • Cons: Only available with military connection

USAA is a definite winner—if you're able to get a policy. This insurance company is only available if you're a military member or veteran, or a family member of one.

Their base price is already low, but you can also take advantage of their many discounts. Plus, you can bundle your car insurance policy with condo, renters, boat insurance, and more. USAA also scores high in customer service and claims satisfaction.

These low prices aren't available to everyone, unfortunately. Check out these other companies for affordable options.

Bad Credit: GEICO

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  • Average 6-month premium: $575
  • Pros: Helpful app and website, lots of discounts, good customer service
  • Cons: Harder to find a local agents, home insurance available through a third party

Turns out the famous gecko knows a thing or two about car insurance. Will you actually save 15%? That depends on your personal details. But GEICO typically has some of the cheapest rates.

Bring down your premium even more with their many discounts. You can get lower rates for bundling, having good grades, or having safety features in your car. GEICO also has a great website and app. You can log on to easily change your policy, pay bills, and file a claim.

If you want to bundle auto and home policies, keep in mind that GEICO doesn't sell their own home insurance. They offer home insurance through a partner company. But you'll have to deal with two separate insurers for that discount on your car insurance.

Getting in an accident feels even worse when you see how much it spikes your insurance. Find out which company is best for keeping rates down below.

Recent Accidents: Liberty Mutual

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  • Average 6-month premium: $642
  • Pros: Many coverage types, lots of discounts, options for high-risk drivers
  • Cons: Below-average customer service, base rates can be high without discounts

Liberty Mutual has lots of coverage options that you can add to your policy. These include accident forgiveness, better car replacement, and more.

If you need to carry an SR-22 because you drove without a license or had a DUI, it can be hard to get insurance. Some companies don't offer policies to high-risk drivers with an SR-22. Liberty Mutual is one of the insurance companies that will still insure you.

Prices vary a lot by ZIP code. Liberty Mutual is affordable in many areas. But get a quote first to see if prices are competitive where you live.

Is your car insurance too high? You might not be getting the most out of your discounts. See which company offers the best opportunities to save.

Discounts: State Farm

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  • Average 6-month premium: $677
  • Pros: Many discounts, high claims satisfaction, variety of coverage options
  • Cons: Expensive with bad credit or accidents

State Farm is the largest car insurance company in the U.S. Their base rates aren't the lowest, but they offer plenty of discounts to make up for it. It's always a good idea to ask your insurance agent about any discounts you qualify for.

This company is a good choice for young drivers. They have a safe driving program that gives you discounts for good driving habits. You can also get condo, renters, home, boat, life insurance, and more. It's a good option if you're looking to bundle multiple policies.

But there is a catch. State Farm's rates are affordable if you have a clean driving record and good credit. If you've had a recent accident or poor credit, your rates will spike by up to 180%.

Discounts are great, but it might be easier to shop with your target price in mind. The next insurer lets you pay within your budget.

Choose Your Price: Progressive

  • Average 6-month premium: $793
  • Pros: Name your price tool, safe driving program, good discounts
  • Cons: Average customer service and claims satisfaction

Progressive has a bunch of tools to help bring your car insurance down. They offer multiple ways to get a quote. You can name your price and get a policy that works with your budget.

If you want to bring down prices even more, try out their Snapshot program. A device is installed in your car to track your driving behavior. You'll be rewarded for safe driving with discounts on your premium.

The Snapshot program might not be for you if you don't feel comfortable having your driving tracked. Progressive doesn't have great customer satisfaction ratings. That's something to keep in mind too.

Fun fact: The actress who plays Flo the Progressive girl based the character on her mom.

Driving a lot can also drive up your insurance rates. The next pick offers lower prices, even if you're a fan of cross-country trips.

High-Mileage Drivers: Farmers

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  • Average 6-month premium: $834
  • Pros: Good for bundling, easy to file a claim, lots of discounts
  • Cons: High premiums for bad credit or driving record

You know them for their catchy jingle, but Farmers can get you good savings too. They offer many coverage types, so it's a good idea to bundle your insurance with them. In addition to car insurance, they offer home, renters, motorcycle insurance, and more.

If you drive often, you know that mileage affects your car insurance premium. Farmers doesn't raise prices as much as some other insurance companies for higher mileage. It's worth getting a quote from them if you love to take road trips.

Not everyone has a perfect credit score or driving record. If this is you, look for a different car insurance provider. Farmers' prices are high if you have bad credit or a recent accident on your record.

One of the best ways to save on insurance is to get multiple policies from the same provider. Find out where you can bundle your home, life, and car insurance below.

Bundle Policies: Allstate

  • Average 6-month premium: $912
  • Pros: Good customer service, many coverage options, easy claims process
  • Cons: Not as affordable as other picks, expensive for bad credit and DUIs

You're in good hands with this car insurance company. Allstate also carries home, life, motorcycle insurance, and more. So you can get all of your insurance under the same roof. Their multipolicy discount is a great way to save.

Although they don't have the lowest base rates, you can take advantage of their many discounts. You can get a lower price just by going paperless or setting up autopay.

Like many other insurance companies, Allstate has a safe driving program that gives you a discount for good driving. If you let them track your driving, you can get a discount of up to 25%.

Infrequent Drivers: Metromile

  • Average 6-month premium: Pay per mile
  • Pros: Easy sign-up, cheap if you drive <10,000 miles per year, only charges up to 250 miles per day
  • Cons: Only available in some states, app tracks your driving

If you're thinking, "I don't want to pay $700+ when I barely drive," this company is for you. With Metromile, you won't have to pay a high premium if you're a low-mileage driver.

Each month, you'll be charged a base rate plus a per-mile rate. Base rates start at $29 per month, with a per mile rate of around $0.06 to $0.08. If you drive 500 miles a month, that comes out to $59 (or $354 for a 6-month period).

Metromile is only available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington. Low-mileage drivers in other states will have to look elsewhere.

Choosing the Right Coverage

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If you want cheap car insurance, it's tempting to just get your state's minimum coverage requirements. This isn't always a good idea.

Having the minimum might work if you can't afford more and you drive an old car. If you have a newer car or get in a serious accident, the minimum isn't enough. Consider additional coverage to protect yourself:

Liability
Most states require bodily injury liability and property damage liability insurance. This covers damage to other people and their property if you cause an accident.

Your liability limits should roughly equal your net worth. To get your net worth, add up all your debts and subtract that from your assets. Assets include cash, investments, real estate, and cars you own.

For example, if you have $70,000 in assets and $20,000 in student loan debt, your net worth is $50,000.

Collision
If you get in an accident, collision insurance will cover damage to your car. The coverage kicks in regardless of who caused the accident.

Comprehensive
Comprehensive covers damage to your car that isn't caused by a collision. It covers theft, vandalism, falling objects, and more.

Uninsured/Underinsured Motorist
This coverage protects you when another driver causes an accident. If the driver doesn't have enough insurance to cover your damage, your insurance will pay out for you. Some states even let you use this coverage for hit-and-run accidents.

Ways to Lower Your Car Insurance

Always Shop Around
Don't stay with a company just for the loyalty discount. You can save hundreds on car insurance by comparing quotes every year. Insurance companies look at many factors when setting your rates. Shopping around helps you avoid unnecessary price hikes.

Drive an Older or Safer Car
This might sound obvious. But a fancy, new sports car will cost more to insure than a safe SUV. Insurance companies look at all kinds of factors when setting your rates. Your car plays an important role in that.

If your car has a lot of safety features and isn't super-expensive to repair, you'll pay less for insurance. A fast, flashy car is more likely to get in accidents. So it'll definitely raise your premium.

Usage-Based Insurance
These days, a lot of companies offer a discount if you let them follow your driving habits. Usage-based insurance involves tracking your driving though an app. The insurance company will get information like how hard you brake and how often you drive.

It sounds a little creepy, but you can save a good amount by joining these programs. You'll get 5% off just for joining. Actual savings are usually around 10% to 20%.

Improve Your Credit Score
Improving your credit score can get you lower rates. Statistically, people with bad credit get in more accidents. So, car insurance companies charge more if you have bad credit (except in California, Hawaii, and Massachusetts).

Best Discounts for Car Insurance

Bundling
Many car insurance companies sell other types of insurance too. If you need home, renters, or life insurance along with auto, bundle them together. You can get around 15% off if you buy multiple policies from the same company.

Multi-Car
If you have more than one car to insure, you can get some pretty nice savings. Insurers give you up to 25% off for having multiple cars on your policy. This is a good incentive to keep families on the same policy.

Safe Driver
No one wants to get in an accident. If you're able to stay accident-free for 5 years, you can get a hefty discount. Some companies offer up to 30% off for safe driving.

Good Student
It's expensive to get car insurance for college students. But you can bring that cost down by getting good grades. Many car insurance companies let you save if you maintain at least a B average grade. That's a win-win for your GPA and your wallet.

Paperless Billing
You've probably transitioned to online for many of your bills already. But going paperless for car insurance can actually get you a small discount.

Paid in Full
Pay for your entire policy upfront and you could get a discount. The discount can be as high as 20% with some insurers.

Bottom Line

If you want to save on car insurance, don't just hack away at your coverage limits. Instead, get quotes from different companies for the coverage amount you need. You'll be glad you have enough insurance if an accident happens.

There's a chance the cheapest insurance companies still aren't cheap enough for you. Luckily, there are things within your control that can lower your rates. Drive an older, safer car, try driving-tracking apps, and work on improving your credit score.

And don't be afraid to bug your insurance agent about any discounts you might qualify for.

More from CreditDonkey:


Best Car Insurance for Young Adults


Average Cost of Car Insurance


Auto and Renters Insurance


Car Insurance

What is Full Coverage Car Insurance

Do you really need to pay more for full coverage car insurance? Learn below if you need extra coverage, and see the cheapest prices.

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Best Car Insurance

Is cheaper better for car insurance? Not always. Check out the best car insurance companies for price, customer service, and more.

About CreditDonkey®
CreditDonkey is a car insurance comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

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