Find an Affordable Car Insurance Rate

Written by Editor in Chief, Pick The Brain - 26 Comments
Categories: money and finance

Police car wreckedOne 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!

  • Adam

    Useful info. Getting insurance is a pain, but at least you only need to deal with it occasionally. I’d add that if you want to keep your costs down its important to drive carefully (no speeding tickets) and drive a fairly conservative car. Those are 2 of the biggest factors for insurance rates.

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  • Jimbo

    You also need to re-check your rates periodically. Insurance companies will increase rates on your policy and you need to keep them honest. The company that offered you the cheapest rate initally may not be the cheapest when you renew after the first or second year.

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    Excellent advice. One more thing to consider: I have found that compared to the major companies AAA offers very competitive auto insurance.

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    Nice advice, its a very useful blog with much information regarding ealth in all terms……..

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    How do you include in the cost of insurance going down after you are with a company for a number of years? Has anyone else gotten discounts after being with a company for so many years? I received a check from state farm this year because the stock holders decided to give some kind of rebate to customers because they had a good year.

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