One of the reasons many people have bad financial habits is that frugality isn’t sexy. The tasks that save you money are generally tedious and time consuming. Finding an affordable car insurance rate is a perfect example. No one enjoys filling out endless forms, searching for quotes, and haggling over the phone.
It’s tempting to make a snap decision and go with the first company that comes to mind. Unfortunately, this isn’t likely to land you the most affordable car insurance.If you can get past the aggravation and spend a couple hours shopping, it’s likely you can save yourself a few thousand dollars over the life of your car. That works out to an impressive hourly rate, and the experience will help you save on future purchases.
Step 1. Do Your Research
The first step to finding cheap car insurance is researching rates. Depending on your location, age, and vehicle, premium sizes can vary significantly (as much as 25%). The fastest way to get quotes is online. You should get online quotes from at least a half dozen major companies to get a feel for the market.
Beforehand you should know what type of coverage you want and how high a deductable you’re willing to pay. This information will make the process faster and generate more accurate quotes. It’s also helpful to ask people in your age range what company was the cheapest for them–it’s likely to be the same for you.
Step 2. Narrow It Down
Once you’ve gotten a range of quotes, it’s time to narrow it down. Generally, the most important factor is cost but there are other points like service and additional benefits that can influence your decision. Depending on your personal preferences, pick out 1-3 companies that seem to fit the best for you.
Step 3. Make the Call
Once you’ve got your short list, it’s time to grab the phone and get some real quotes. Be prepared to pay significantly more than the online rates. In my case the difference was over 30%. The reason for this is that online rates factor in every imaginable discount, making them much lower than the real rate. Although this seems a bit underhanded, all insurance companies do it. Fortunately the comparative prices between companies are reasonably accurate.
Make sure you have your driver’s license, vehicle registration, and current insurance policy on hand. Information from these documents is necessary to get a quote, so save time by having them ready.Do a bit of company specific research, decide exactly what policy you want, and prepare for psychological warfare. The company representative is trained to persuade you to buy more insurance than you need. To entice you, they’ll say that your car insurance premiums will decrease if you buy renter’s insurance or add other options. This sounds good, but you’ll actually be paying more overall.
By deciding on a policy ahead of time, you can tell them exactly what you want without getting confused. When you’re ready, get on the phone and get down to business.
Step 4. Purchase and Celebrate
After you’ve gotten real quotes over the phone, it’s time to make a decision. Go with the best value you can find. Personally, I’m a fan of the lowest price, assuming the coverage is equal. Call back, make the purchase, and bask in the knowledge that you’ve saved yourself a hefty chunk of change.Solid personal finance isn’t about cashing in on the stock market or making big moves. It’s about maintaining the effort and diligence required to get the most out of your money. Now if only you can find a decent auto loan!