How Can You Find Budget Auto Insurance?
Last Updated on November 12, 2022
Millions of Americans overpay for auto insurance.
Some people pay $2,000 per year for car insurance. Others pay less than $500.
With a bit of research, you can find budget auto insurance that meets your needs.
Today, we’re explaining some of the best tips, tricks, and strategies you can use to find budget auto insurance.
- Top 13 Tips for Getting Auto Insurance on a Budget
- 1. Understand How Insurers Calculate Rates
- 2. Shop from State Farm, GEICO, or USAA
- 3. Compare Quotes Across Multiple Companies
- 4. Take Advantage of Discounts
- 5. Sign Up for Telematics / Driver Tracking Programs
- 6. Improve Your Credit Score
- 7. Drop Collision and Comprehensive Coverage on Older Vehicles
- 8. Adjust Your Deductible
- 9. Consider Insurance Before Buying a Car
- 10. Compare Insurance Quotes Annually and After Major Life Events
- 11. Take a Driver Safety Course Over Age 55
- 12. Use Usage-Based Insurance for Low Mileage Driving
- 13. Adjust Liability Coverage to Ensure Limits Match Your Financial Picture
- Final Word on Budget Auto Insurance
Top 13 Tips for Getting Auto Insurance on a Budget
There are dozens of ways to get auto insurance on a budget. We’ve covered some of the best and most effective tips below.
1. Understand How Insurers Calculate Rates
Insurers use hundreds of factors to calculate auto insurance premiums. You can change some of these factors, but not others.
Factors You Cannot Change
You can change some auto insurance factors but not others. Factors you cannot easily change include your:
Factors You Can Change
You can, however, change certain other aspects of auto insurance. By adjusting certain metrics, you could save money on car insurance.
Factors you can change include:
By targeting the factors you can change, you can save thousands per year on car insurance.
2. Shop from State Farm, GEICO, or USAA
Although State Farm and GEICO have average reviews for claims satisfaction and customer service, they’re known for their competitive prices.
USAA, meanwhile, is available to active duty and retired members of the military and certain qualifying family members. If your parent was a member of the military, then you could qualify for USAA membership. And, once you’re a USAA member, membership can pass to certain other qualifying members.
If you want cheap car insurance in the United States, then State Farm, GEICO, and USAA are three of the best companies for starting your search.
3. Compare Quotes Across Multiple Companies
America’s largest car insurance companies have competitive pricing. In most states, they provide quotes within a narrow range of each other.
GEICO, State Farm, and USAA tend to be the cheapest car insurance companies in most states. However, that’s not true for all states.
In some states, State Farm and GEICO are hundreds of dollars more expensive than smaller, local companies, for example. In other states, USAA is the cheapest option.
GEICO, State Farm, and USAA may also not be the best choice for drivers with a certain record. Drivers with a medium-risk or high-risk driving record, for example, may be better off with a different provider.
There’s no single “cheapest car insurance company” across the country; compare quotes across multiple companies to find the best rates in your area.
4. Take Advantage of Discounts
All car insurance companies offer discounts. Taking advantage of discounts can save you hundreds – even thousands – per year on car insurance.
Some insurers make it easy to qualify for discounts, while others make you work for it. Some of the best discounts to look for include:
- Bundling discounts, including rewards for bundling home and auto insurance with a single company
- Multi-vehicle discounts
- Good student discounts
- Paid in full discounts
- Group affinity discounts
- Clean driving record or safe driving discounts
5. Sign Up for Telematics / Driver Tracking Programs
Insurers now use technology to provide customized quotes to drivers. Most insurers use a smartphone app to track your driving behavior in exchange for a discount.
These telematics/driver tracking programs are optional, but they can help you save money.
These programs work by tracking things like:
- Stopping and acceleration
- Average daily/monthly driving distance
- Speeding habits
- Use of phone while driving
- Other driving behavior
Drivers with safe habits and low mileage could pay hundreds of dollars less than drivers with dangerous habits and high mileage.
Some insurance companies give you a discount just for signing up: you might save 5% to 10% just for using the driver tracking app, for example, with additional discounts available of up to 20% or more.
6. Improve Your Credit Score
You can improve your credit score to lower car insurance premiums. Insurers use your credit score to calculate car insurance premiums. The better your credit is, the less you’ll pay for car insurance.
Improve your credit score by paying off debt, consolidating loans, and opening new lines of credit to reduce your debt load.
Some studies show improving your credit can also increase your chances of filing a successful claim.
Four states have banned insurers from using credit scores to calculate premiums, including California, Hawaii, Massachusetts, and Michigan.
7. Drop Collision and Comprehensive Coverage on Older Vehicles
Collision and comprehensive coverage are optional in all states. They cover your own vehicle against accident damages and non-accident damages.
On an older vehicle, you can drop collision and comprehensive coverage to save money. Here’s how each coverage works:
Collision Coverage: Collision coverage covers the cost of repairing your vehicle to pre-loss condition after an accident. It’s optional in all states, although most dealerships and lenders require it on leased or financed vehicles.
Comprehensive Coverage: Comprehensive coverage protects your car from fire damage, water damage, theft, vandalism, collisions with animals, and other incidents that occur outside of accidents.
In fact, you may be able to reduce car insurance by 50% or more by dropping collision and comprehensive coverage.
When you drop collision and comprehensive coverage, you have no coverage for your own vehicle after an at-fault accident. However, these coverages may not make sense on older vehicles anyway, as the cost of repairing your vehicle is more than the car is worth.
8. Adjust Your Deductible
Adjusting your deductible can lower car insurance premiums. You pay more during a claim, but you’ll pay less for premiums each month.
A typical car insurance deductible is $250 to $750. By raising your deductible to $1,000 or beyond, you could save a small amount each month.
Of course, a single claim could wipe out any savings, so be careful when adjusting your deductible. Consider the likelihood of making a claim against the average cost savings.
9. Consider Insurance Before Buying a Car
Some cars have surprisingly high insurance premiums, while others are cheap.
Vehicle value affects car insurance premiums. Expensive cars have costlier premiums than cheaper cars.
However, insurance premiums also vary based on car safety rating, rollover risk, theft protection, and other vehicle-specific factors.
Consider insurance premiums before buying a new car. Otherwise, you may be shocked by how much your car insurance increases.
10. Compare Insurance Quotes Annually and After Major Life Events
Many people buy insurance and never compare quotes again. However, you could be missing out on big savings.
Compare insurance quotes annually and after major life events. Insurers adjust rates regularly. And, as your life circumstances change, a new insurer could be a better fit.
Check insurance quotes after events like:
Some insurers like having married homeowners in their insurance pool because they’re relatively low risk. Other insurers prefer medium-risk drivers for the higher premiums. By comparing quotes regularly, you can ensure you’re always working with the insurer that’s best for you.
11. Take a Driver Safety Course Over Age 55
Some insurers are raising rates on drivers over age 55. However, some states have passed laws requiring insurers to give discounts to drivers over 55 who complete a driver safety course.
It’s no secret teenagers can save money by taking a driver safety course. However, older adults can also save.
If you’re a driver over 55 who has watched your car insurance rates rise, then consider taking a state-approved driver safety course to reduce car insurance premiums. In some states, it’s an online course that could lead to 5% or 10% savings.
12. Use Usage-Based Insurance for Low Mileage Driving
The average American drives 14,000 miles per year. If you drive significantly less, then you may benefit from usage-based insurance as a low mileage driver.
With usage-based insurance, you pay a fixed rate based on the specific number of miles you drive. The insurance company tracks your mileage, and you pay based on that number.
Usage-based insurance is not ideal for everyone, but it can help low mileage drivers save significantly on insurance. If you work from home, rarely drive long distances, or use public transit to commute, then usage-based insurance could help you save hundreds.
13. Adjust Liability Coverage to Ensure Limits Match Your Financial Picture
Some drivers carry too much liability coverage. Others carry too little. In both situations, you’re risking your financial future.
If you have too little liability coverage, then you risk losing money from a car accident. You might only have $100,000 of bodily injury liability coverage, for example, even though the other driver incurred $500,000 of medical bills. In this situation, the other driver could sue for damages, seizing your money, home, and other assets to cover your liability.
Some drivers are over-insured. They have too much liability coverage. They might not own a home or have a significant number of assets, for example, yet they carry $2 million in liability coverage. You could be spending hundreds of dollars more per year than necessary.
Consider your financial picture and adjust your liability coverage limits as needed to match.
Final Word on Budget Auto Insurance
Finding good, cheap car insurance is easy.
You can find budget auto insurance by shopping around, comparing quotes, taking advantage of discounts, and adjusting coverage for your needs.
Start shopping today to find the perfect budget auto insurance for your needs.