The Definitive Guide to Finding the Best Cheap Car Insurance

The fast and the furious introduction to cheap car insurance

Finding the best cheap car insurance can seem like an impossible and miserable task. But it's worth it. $388-a-year worth it, according to J.D. Power.

The research group found that by shopping around for better insurance rates, you can save nearly four hundred dollars per year. Getting a lower rate means putting more money towards important goals like increasing your rainy day fund, or paying off a mortgage (a little) faster.

But those decreased premiums won't matter much if your new policy doesn't adequately protect your car. By breaking down the different steps of finding affordable car insurance, you can painlessly find the right-for-you-and-your-car plan.

Read this guide to learn

  • Ways of measuring how much coverage your car insurance should provide
  • The different cheapest plans available, and whether they're right for you
  • Methods for lowering your premiums and making cheap car insurance even cheaper
  • How you can best research and compare prices so you can find the best car insurance that's right for you.

Interested in getting the cheapest car insurance possible? Read on!

1: Know the best, cheapest car insurance companies when searching for great rates

Just like detectives round up the usual suspects when solving a whodunit, the most logical place starting point in a search for cheap car insurance begins with the companies who usually offer the lowest prices. That doesn't mean these insurers will necessarily get you the best deal. However, if you know why certain companies have the best bargains on car insurance can help you track down an affordable plan.

Beware of little expenses; a small leak will sink a great ship.

Benjamin Franklin

Every state regulates the car insurance market differently. These different rules about how much minimum coverage a driver needs, as well as other contributing factors insurers use to calculate risk (such as the number of tickets or wrecks per state resident), affect how much insurance costs from place to place. That means that drivers in New Jersey pay the most for car insurance out of anywhere in America, with an average rate of $1334.54 according to the National Institute of Insurance Commissioners.

It also means the best cheap car insurance company in one state won't offer the lowest rates in another. For instance, The Simple Dollar took an exhaustive look at which companies offered the best rates for each state's minimum liability insurance. Progressive walked away with that honor in Montana, while Geico declared low price victory in New York.

2018 Leading Auto Insurance Companies in New York

You don't need the cheapest plan, you need the cheapest plan for your needs

The minimum coverage required by each state won't cover your costs unless you get in the daintiest of fender benders. Consider how much coverage you really need, and look for plans that can protect you from shelling out your life savings if you end up in a wreck. Picking out the perfect plan gets covered in the third section of this guide.

You also don't want a company that will go out of business before it pays off your claim. That's one message Coverhound makes clear in this piece about cheap car insurance. Even if a bottom-of-the-barrel company does offer the cheapest car insurance, that doesn't make it the best cheap car insurance company for you.

Returning to that study from The Simple Dollar, here are the three best cheap car insurance companies offering the lowest prices for the state-required minimum amount of liability coverage:

Geico knocked it out of the park by offering the cheapest prices in 19 different states. However, industry analyst JD Power states it offers below-average customer service in 2015. It also doesn't offer that many discounts for its drivers. That means if you're looking for greater coverage than the state minimum (and you really should), compare prices before committing to this gecko-fronted company.

State Farm came in first in 12 states. It ranked higher than Geico in customer satisfaction, offers many different kinds of insurance. This can present plenty of saving opportunities for folks interested in discounts from bundling their policies.

With the lowest rates in seven states, Progressive comes in at a solid third. The company also offers a lot of ways to save through loyalty discounts and low-mileage discounts, which can push prices down if you take advantage of them.

Start with these companies, but don't end with them

Just because these three companies offer the cheapest rates doesn't necessarily mean they offer the best coverage in your area. Comparing prices always pays off, so make sure you do the necessary legwork in getting multiple quotes and shopping around. Don't make a decision until you get a handle on which is the best cheap car insurance company for you.

2: Why spending more on cheap car insurance can actually save you money

Searching for the best cheap car insurance is like bargain shopping for a fire extinguisher – how much you save won't matter if it doesn't work when you need it.

With car insurance, sometimes shelling out a few extra dollars for more coverage can actually be less expensive in the long run.

Choosing the lowest priced plan can mean pricey damages payouts, possible lawsuits, or even life altering scams from fraudulent insurance companies.

Picking a program that meets your needs can help you avoid these worst-case scenarios.

You get what you pay for with the cheapest car insurance, and that means the least expensive plans only offer liability insurance. You can't easily escape (nor should you) buying liability insurance. 47 of the 50 states require that drivers carry some level of liability insurance, so you're legally obligated to get it before getting behind the wheel.

Arizona, Virginia and New Hampshire don't require insurance for its drivers, but individual state laws make life harder for folks without insurance. For example, in Arizona, uninsured drivers must be able to put up a $40,000 bond to prove they can pay for damages resulting from a wreck.

To learn more the minimum liability insurance and the differences between states, check out this comprehensive article from The Balance. Long story short, if you were looking for the cheapest options, then move to Florida.

Who should get it: Everyone who drives a vehicle should have liability insurance. This insurance protects you from financial ruin should you damage someone else's property or person.

Why the cheapest insurance can get expensive in the long run

Here's the thing about liability insurance – it basically covers everything except your own car and the people in it. A liability policy covers two types of damages in a car accident:

  • Bodily Injury Liability: This covers the medical bills for other people involved in an accident
  • Property Damage Liability: This pays for destroyed or damaged property in an accident

Liability insurance gets discussed in-depth in section four of this guide, but here's a quick rundown on the basics. Say you buy the minimum required insurance in Alabama, and get a policy that reads 25/50/25. Those numbers express how many thousands of dollars in coverage your insurer pays out for different things. Here's the breakdown:

  • The first number stands for $25,000 bodily injury liability per person. If someone requires $30,000 in medical bills as a result of a wreck, you're on the hook for the remaining $5,000.
  • The second number means your insurer will only pay out $50,000 in bodily injury liability claims per accident. That means if three people were in an accident, each requiring $20,000 in medical care, you're responsible for the remaining $10,000.
  • The third number stands for $25,000 in property damage liability. Say you lose control of your car and crash into a storefront. No one is injured, but you cause $45,000 worth of damage to the building. You're paying that leftover $20,000 out of your own pocket.

If you're in a car accident where the bodily injury and property damages go over these minimums, you can get sued for any costs that go over these individual limits.

That means if you held the minimum car insurance required in Alabama and get in a wreck like the one described above – three people claiming $20,000 each in medical bills and $45,000 worth of property damage – you would be held responsible for $30,000 as a result.

If you paid $240 per year for the minimum, which is crazy cheap, you would have to avoid a similar accident for ten years before seeing any true savings. That's a risky bet since wrecks can happen anytime.

Guess what you'll see when you search for anything about the average cost for bodily injury due to a car accident? LOTS of lawyers advertising their services. Keep that in mind as you tick the box for the cheapest option available.

Paying a few more dollars for more liability coverage could save you cash in the long term.

Things that sound too good to be true usually are, and car insurance is no different. If you find the cheapest car insurance company in your area offers rates that fall well below what other insurers offer, it may be ripping customers off.

That was the case in Michigan, according to a story featured in the Insurance Journal. A broker had his license for selling insurance revoked back in 2013, but that didn't stop him from selling fake insurance certificates and pocketing the proceeds for himself. Drivers who purchased these fraudulent insurance plans lacked coverage and were illegally driving without insurance.

Luckily offers some extremely helpful advice on what to watch out for so you don't fall victim to these scams:

  • The price is way lower than what other companies offer
  • The company's paperwork or advertising contains typos typas spelling errors
  • Full payment upfront in cash or money order is required
  • Backdating the policy, where a company promises to insure you for something that has already happened (very few companies do this!)
  • Your insurance ID card never shows up

When you should go with the cheapest car insurance

The one time you should choose the absolute cheapest car insurance available is when saving money becomes a necessity. If you find yourself choosing between paying your electricity bill or a more expensive car insurance plan, go with keeping the lights on. Money Crashers offers some great tips on prioritizing your bills when low on cash:

"Remember to take care of your basic human needs including food, shelter, and safety before you worry about your debts. Once you take care of yourself, tackle your debts in order of priority. Don't let concerns about your credit card rating, or threats from a debt collector, scare you into paying for something you don't absolutely need to pay for right now – especially if paying the bill will keep you from being able to take care of yourself."

Sometimes paying more means saving more

The trick for finding cheap car insurance isn't finding the cheapest car insurance – it's finding the cheapest car insurance that meets your needs. Knowing how much coverage you need will help you shop around for great rates on plans that keep you protected.

3: Keep costs low by paying only for the coverage you need

There's no such thing as too much of a good thing – except when you're buying coverage. Finding cheap car insurance that can protect your car and wallet in case something happens to your vehicle can seem like a daunting task. If you know how much coverage your car insurance should provide, picking out the right plan becomes an easier task.

As mentioned in the second chapter of this guide, picking a plan with a low price and little coverage can leave you stuck with crippling expenses if you ever get in an accident. However, tons of other unexpected events could leave you shelling out unnecessary cash if you don't have enough coverage. That could include buying a new ride if your vehicle gets stolen, or paying for weather-induced damages due to a flood, hailstorm or other forms of Nature's wrath.

U.S. Reported Motor Vehicle Thefts from 1990-2016

On the other hand, buying too much coverage can sap your cash every month. If you live in a low-crime area, you probably shouldn't pay for insurance that protects you in the case of theft. Also, as this handy guide from Money Under 30 points, out, having too much insurance can make you the target of frivolous lawsuits if you ever get in an accident. Lawyers evaluate the amount of coverage you carry. The more you're covered, the more likely you'll get sued.

With so many types of insurance available, picking the right one can leave you sympathizing with Goldilocks – searching through plans offering a low price but little protection, or a ton of coverage at a high cost until finding one that's just right.

Once you know the different types of coverage available, you can better pick which ones are right for you. These plans get broken down in detail in an article on different types of car insurance, but here are the standard kinds of coverage on the market:

  • Liability insurance: Almost every state requires this kind of insurance at minimum. It covers a set amount of both property and bodily injury expenses.
  • Collision insurance: This covers your own vehicle in the case of an accident.
  • Comprehensive insurance: This will pay for your car if it gets stolen, vandalized, or otherwise damaged outside of a wreck.

Comprehensive vs. collision insurance – the similarities

Comprehensive and collision insurance aren't that different in a lot of ways. Unlike liability insurance, they both actually cover your car, and neither of these plans limits how much money gets paid out if your car gets damaged. You're insured for the cash value of your vehicle no matter what.

That means that if your car is worth $100,000, comprehensive or collision insurance plans will pay out that amount if it gets totaled.

Note that these types of insurance only cover the value of your vehicle at the time of an accident, not how much you initially paid for it, or the amount of money left on your car loan.

That means that if that $100,000 car you bought ten years ago is only worth $50,000 today, comprehensive or collision insurance would only cover up to $50,000 to buy you a new one.

Collision and comprehensive insurance also differ from liability plans in one important area – they both have a deductible, or set amount that you must pay before your car insurance takes effect.

For instance, say your car received $5,000 worth of damage in a car wreck or natural disaster, and your comprehensive or collision insurance features a $1,000 deductible. That would mean you would pay $1,000 up front, and your insurance would cover the remaining $4,000.

Raising your deductible can help you save money on your monthly premiums. This way to save gets covered later in the chapter.

Who should get it: If you own a vehicle that you plan to drive for a long time or has a high amount of value, then get this insurance plus liability. If not, one accident and your vehicle may never look and run the same again.

Comprehensive vs. collision insurance – the differences

The main way comprehensive and collision insurance differs is in what situations they cover.

If your car gets damaged by a natural disaster, vandalized or stolen, comprehensive car insurance pays out the current cash value of your car. As an example, say you had a nice sedan worth $20,000. If a flood damaged your car like one of the 100,000 that were ruined in Baton Rouge, Louisiana in 2016, you wouldn't see a dime from your insurer if you only have liability and collision insurance coverage.

With comprehensive insurance, you would get $20,000 from your insurance company. That's money that could go towards buying a replacement vehicle, something well worth shelling out a few extra bucks in premiums every month.

Now say that same $20,000 sedan collided with another car. Like the name implies, that situation gets covered under collision insurance. Liability insurance would cover the damages on everything except for your car and its passengers, and then your collision insurance would pay for the worth of your car.

Who should get it: If you drive often, have a car with a relatively high resale value, and live in a high-risk area, then get this policy.

Deciding how much coverage you need

According to the financial guru Dave Ramsey, liability insurance isn't something you should skimp on. It doesn't cost much and protects you from lawsuits.

Generally you'll want coverage for around at least $500,000 of liability. It sounds like a lot, but add up the cost of your assets including your house, savings, and investments. If you don't have that amount of liability coverage, you're at risk of losing those assets if you get sued following a serious car accident.

Of course, if you don't have that many assets, you may not need as much coverage. Paying a little more for additional insurance on top of greater liability insurance could mean the difference between losing or keeping your house in the case of a serious accident, which makes buying adequate coverage a worthwhile investment.

If you drive an expensive car, beyond liability insurance, investing in comprehensive or collision insurance is a smart choice. Even if you aren't rolling around in a Mercedes, these plans may still be worth it. Ramsey recommends conducting a break-even analysis using the following example: "If you drive a $5,000 car, and dropping your collision coverage would save you $800 a year, you'd have to go more than six years without a wreck to break even." If you don't have that $5,000 in the bank, this could mean the difference between getting a new car and being left without a vehicle following a serious wreck.

However, if you have enough money saved up to buy a new car without taking a serious hit in the pocketbook, you can save some cash by opting out of comprehensive or collision insurance. WalletHub estimates that dropping comprehensive insurance on a $23,700 car could cut 12% off your monthly premiums while losing collision insurance saves 36%. That's still not necessarily a good deal – after all, replacing that car would cost more than however much you saved on premiums – but if you're looking for ways to cut your rates, it's something to consider.

In other words, someone paying $800 every year for insurance would only pay around $600 annually by dropping their collision insurance. That's some serious savings – but it's only worth it if you can actually afford to replace your car after an accident or another stroke of bad luck.

Going back to that Ramsey article, higher deductibles can lower your premium. However, you should only raise your deductible by an amount you can afford. Even if you save $75 a month by raising your annual deductible from $750 to $1,500, you'd have to have 10 accident-free years before recouping your costs. Also, if you get in a wreck and don't have $1,500 in the bank to meet your deductible, you may never get any financial help from your insurance.

Since insurance companies offer coverage for basically every situation except an alien abduction (just kidding – they do), it makes sense that there are many more forms of protection available for your vehicle. The sheer amount of different types of insurance can complicate choosing which plans you should pick. This crazily comprehensive guide from the Wall Street Journal provides answers for what coverage could be right for you. Here's a summary of a few interesting options:

Gap coverage

Purchased cars lose value as soon as you drive them out of the dealership. If you took out a loan for a new car and it gets totaled, your insurance pays out based on the current value of the car, not the current value of the loan. Gap coverage makes up the difference, ensuring you don't get stuck paying for a vehicle that now resides in a junkyard.

Who should get it: Drivers who took out a large loan for a recently purchased new or used vehicle can protect themselves with gap insurance.

Personal injury protection

While liability insurance covers the medical bills for the people who weren't in your car at the time of a wreck, personal injury protection (PIP) insurance will pay for your medical bills, as well as those of the passengers in your car.

Who should get it: If you have an adequate disability or health insurance through your employer, you probably don't need PIP insurance. However, if your employer doesn't offer, or only provides very little of those two forms of insurance, this could be right for you.

Uninsured or underinsured motorist coverage

Say someone without insurance slams into your car, and they're at fault for the accident. If that dismal driver is uninsured or carries only the minimum amount of liability coverage, it might not pay out enough to repair your vehicle or cover your medical expenses. Uninsured and underinsured motorist coverage account for this possibility and will make up the difference.

Who should get it: Pretty much anyone who can afford it, as you can't control how much insurance other drivers carry. Luckily this form of insurance is pretty cheap. ValuePenguinestimates that around $10 every month gets you $100,000 worth of coverage on average.

No-fault insurance

Some states require that drivers carry no-fault insurance, which pays out no matter which driver is at fault in an accident. This money comes with strings attached though, as it limits the driver who didn't cause the wreck from suing the person who crashed into them unless they experience a severe injury. The Insurance Information Institute explains that the idea behind states requiring no-fault insurance is that it cuts down on the amount of lawsuits and insurance fraud from folks looking for higher payouts after an accident.

Who should get it: Drivers in Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah and Puerto Rico where no-fault insurance must get this insurance. However, these plans can be fairly expensive, so shop around before you buy.

Make sure you're covered

Getting the right coverage can mean the difference between a car accident becoming a bad event and a life-ruining one. By picking out the plan that protects both you and your future, you can drive worry-free knowing that your insurance won't let you down.

Motor Vehicle Death Rates On The Rise In Select States (2015-2017)

4: Pick the perfect insurance based on your lifestyle

So now you know all about the different types of car insurance available – and there are a lot of them. That makes narrowing down the right plans and coverage difficult. To make things easier, consider these four types of hypothetical drivers and the types of insurance they get. If one of them sounds similar to your situation, start exploring whether that amount of coverage would be right for you.

Quick note first though – these estimates assume the average cost of each kind of insurance and don't take into account all the discounts that could lower these rates. That means you could possibly get rates hundreds of dollars cheaper than what's listed here, depending on where you live, your driving record, and other factors.

Example: Al Outamohney

Al's fallen on hard times. He struggles with paying rent every month, drives a beat-up '02 Honda Accord, and doesn't have an asset to his name.

What insurance Al should get:

  • Since Al's lack of assets means he isn't at risk of a lawsuit, he pays around $57 per month for the minimum liability insurance required by his state at 25/50/10 coverage levels. This lets him save money until he's on a firmer financial footing.

How much Al pays:

  • About $700 per year, $57 per month

Example: Sally Froogall

The young professional Sally works hard for her money and doesn't part with it easily. She's got $10,000 dollars in her savings account, stashing away part of her paycheck every month in hopes of putting a down payment on a house someday. She bought a used 2012 Ford Focus a few years ago that she keeps in good working order.

What insurance Sally gets:

  • Since Sally has some money in the bank, she pays around $60 per month for greater liability coverage than the state requires, clocking in at a 50/100/25 coverage level. That protects savings in case she gets in a fairly serious accident.
  • Even though her car isn't that expensive, shelling out around $7,000 for a replacement in case it gets totaled would put Sally's home ownership dreams on hold for a few years. She pays about $25 every month for collision insurance, just in case some negligent driver crashes into her.
  • Sally knows that not everyone takes her smart approach towards auto insurance. That's why she pays $5 more per month for a bit of uninsured/underinsured driver insurance, making sure she's protected from less-savvy folks on the road.

How much Sally pays:

  • About $1,080 per year, $90 per month

Example: Bob Goodman

With a house, good-paying job, and family consisting of a wife and 2 kids, Bob's the definition of the middle class. He's got a nice 401k that'll help pay for his retirement one day, and makes payments on a new 2015 Kia Sorento he purchased new a while back.

One thing does keep Bob up at night, though. He lives in a floodplain, and lately, it's been rainier than ever…

What insurance Bob gets:

  • Bob has some assets that need protecting – his house and 401k. That's why he pays $65 dollars every month for 100/300/500 worth of liability insurance.
  • Since he drives a nice car, Bob protects it with both collision insurance costing $50 per month, and uninsured/underinsured driver insurance at $10 per month. The prospect of seeing his vehicle washed away in a storm prompts Bob into getting comprehensive insurance as well, tacking on $35 dollars onto his bill every month.
  • Paying off a car loan on a wrecked car doesn't seem like Bob's idea of a good time. That's why he shells out $20 every year for gap insurance.

How much Bob pays:

  • About $1,940 per year, $162 per month

Example: Josephine Gildedgates III, MD, Esq.

No one really knows what Josephine does for a living. Rumors say she's a financial executive who dabbles in neurosurgery, while others allege she's on the board of directors for the Illuminati. All anyone can agree on is that it's strange seeing her slowly roll down the street in a Rolls Royce Phantom pulled by a team of dressage horses.

What insurance Josephine gets:

  • Any and all of it.

How much Josephine pays:

  • Money is meaningless to one wealthy as Josephine.

Make sure you're protected

In case this point hasn't been driven home enough, make sure you don't skimp out on some much-needed protection in exchange for the immediate gratification of saving a few dollars. If you know how much coverage you need, you can seek out the best cheap car insurance that won't leave you out in the cold after a wreck or other unfortunate situation.

5: Get the lowest rate by forgetting these myths about cheap car insurance

Drivers with a fender bender or a few tickets on their record can feel like their history puts cheap car insurance permanently out of their reach. This can be true if your automobile has seen more collisions than a bumper car, but in many cases, false beliefs about insurance rates and eligibility keep people from searching for plans with lower prices.

Knowing the myths and facts about what actually affects your premiums and which customers the cheapest auto insurance companies accept can help you better prepare for shopping around.

FACT: "High risk drivers" pay higher rates

In some cases, poor behavior behind the wheel can get you classified as a high-risk driver. While there's no exact definition for what makes someone a high-risk driver, in general, it's anyone car insurance companies believe will cost them money.

It's worth a lot of money to avoid being classified as a high-risk driver.

Car Insurance 101 estimates that if you don't become a high-risk driver, you can save up to three times as much on car insurance.

So, If you found a $500 car insurance annual payment that fits your budget, then always driving the speed limit and never (please) driving impaired from alcohol can keep you from paying $1,000 or $1,500 every year.

Think of it this way: imagine you're getting paid cash by the auto insurance company to NOT be a high-risk driver.

Who are high-risk drivers? Take a look at these risky behaviors below. Anyone (sorry teenagers) found engaging in this behavior pays higher rates and risks getting rejected by major companies offering cheap car insurance.

The following factors can result in getting labeled as a high-risk driver:

  • DUIs or DWIs: Go figure that PUTTING ACTUAL LIVES AT RISK makes insurers raise rates or reject applications
  • Excessive speeding: Going 20 MPH or more over the speed limit will make insurance companies wary
  • Multiple accidents or moving violations: Everyone makes mistakes, but drivers who keep making them over and over again get noticed
  • Driving without insurance: Pay for whatever insurance you can afford now, or go without it and pay more later
  • No driving experience: New drivers make insurers nervous, and pay higher rates until proving themselves safe
  • Drive exotic vehicles: C'mon now, you can afford increased insurance premiums if you can afford a Lamborghini

Spectacularly risky drivers who frequently violate the first four categories may lose eligibility for all traditional companies, and must use state-sponsored insurance offered by the Automobile Insurance Plan Office until their driving record improves. Everyone else, including high risk drivers can still shop around for cheap (or at least cheaper) car insurance.

MYTH: Every accident makes rates go up

Some drivers feel hesitant about searching for new plans after any sort of accident. Luckily, insurers won't hike your rates just because some dingus dented your bumper in an accident a few months ago. Esurance provides a simple explanation on how insurers actually examine your driving history:

"Minor accidents and fender benders may not translate to a rate increase — particularly if you have a history of otherwise-safe driving.

"The same goes for fault. If you weren't at fault in an accident, your premium could stay the same. Some insurance policies also include accident forgiveness, which rewards safe-driving patterns by looking at your driving record on the whole (and not just a recent incident)."

Don't let a minor incident derail your search for cheaper insurance.

MYTH: Tickets follow you around forever

Do the ghosts of tickets past rear their head every time you consider searching for cheap car insurance? Don't worry too much – mistakes won't make your premiums increase forever. This article on Nerdwallet breaks down the different time frames these past indiscretions will affect your rates:

"Accidents and tickets generally stay on your record for three years, while DUI convictions usually remain on your record for up to five years. Ask your agent when you'll be able to get car insurance quotes from the standard market again."

FACT: Shopping around always pays off

Even high-risk drivers benefit from comparing quotes from different companies when searching for cheap car insurance. Knowing what actually affects your rates – and for how long – lets you know when you should focus on improving your driving record, and when you should start looking for a newer, cheaper plan.

6: Save cash by buying the right car insurance for new drivers and cars

Auto Insurance Premiums Increase For Drivers With Bad Credit Scores

Finding the best cheap car insurance takes to know the different needs of different drivers. Whether you're insuring a teen or college student, a recently purchased vehicle or just shopping around for a better rate, understanding what types of plans best fit these unique situations can help you keep some money in your wallet.

How new drivers and cars increase your rates

Insurers hate risk. Unfortunately, the Center for Disease Control finds that teen drivers crash more than anyone else. That makes them a pretty risky bet for car insurance companies; hence why buying or adding them to an existing policy costs a significant chunk of change.

Buying a new or used car also presents its own complicated set of premium-increasing challenges. Kelly Blue Book provides a detailed list of all the different ways getting a new automobile may make your car insurance rates jump:

  • The large size of SUVs means they can cause more potential damage during an accident, driving up the cost of liability premiums
  • Repairing expensive cars gets, well, expensive, so insurers charge more for policies on these vehicles
  • Faster vehicles raise your rates since they statistically get in more accidents

Don't worry though, because there's still hope for finding the right cheap car insurance for your new driver or car.

Car insurance for a teen or new drivers doesn't have to leave you penniless. It just takes shopping around for plans that offer the right discounts or incentives. Teen driving experts MOTOcoach offer some great tips on what features let you cut prices when insuring younger drivers:

  • High grades, low costs: Some insurers offer good student discounts on premiums for teens with a B or higher grade point average. For instance, Allstate offers up to 20% off for these budding scholars.
  • Train to save: Taking defensive driving or other driver training can result in lower rates for young drivers.
  • Drive less, pay less: If you know your teen or new driver won't be on the road much, some insurers offer low mileage discounts for infrequent drivers. Safeco cuts rates by up to 20% for driving under 8,000 miles annually.
  • Age – it can be just a number: Some plans charge up to 100% during the first year of insuring a new driver, regardless of their age. Make sure you ask about these kinds of costs when shopping for a policy.

Buying a new or used car costs enough already – don't let car insurance make it even more expensive. The good folks at give some great pointers on getting cheap car insurance when purchasing a vehicle:

  • Get insurance quotes on any car you're seriously considering before you buy it. You may find that insurers other than your current provider offer lower rates for your new ride.
  • Check which plans offer Gap (Guaranteed auto protection) coverage. CARFAX notes that cars lose 10% of their value the moment you drive off the lot, and most plans cover only a car's current cash value. That means if you get in an accident while rolling out of the dealership, your insurer won't pay out enough for you to pay off the car's loan in full. Plans that offer Gap coverage will make up the difference between a car's value and how much is left on a loan, ensuring you won't get stuck paying for a car that was totaled in a wreck. That means if you buy a $30,000 sedan that gets totaled a block away from a dealership, Gap insurance could save you $3,000 dollars. Considering that Money Crashers states that Gap insurance usually only raises your premiums by 5%, that's an affordable bit of protection.
  • Look for multi-vehicle discounts. Most insurers offer lower payments for adding additional vehicles onto a policy. If you plan on keeping your current car, see which plans will cut your rates for covering all your vehicles using a specific company's policies – like Geico, which offers savings up to 25% for multi-vehicle insurance policies.

Get the right car insurance for your situation

While insuring new drivers and vehicles always costs more, picking the right plan helps you save money. Keeping your eyes open for discounts in these potentially expensive situations and you can find the best cheap car insurance available.

7: Shop around like a pro to get low rates

The best cheap car insurance won't just drop in your lap – you've got to go out and look for it. Shopping around can seem like a difficult process, with different companies, independent brokers, and car insurance agents all claiming that they can give you the best deal. By knowing the best ways of navigating the car insurance market, you can easily find a great plan at the lowest rate possible.

Where you can shop for the best cheap car insurance

Today, you can get a car insurance quote during a face-to-face consultation with an agent or directly from a company's website. However, these different ways of getting rates come with their own advantages and drawbacks. A post on the website Moneytips offers some useful advice for evaluating the pros and cons of these different ways of searching for insurance.

Captive insurance agents

Captive insurance agents work directly for a company like State Farm or Allstate. They try matching your needs with the insurance plans offered by their employer.


  • Specializing in only one company's plans mean they possess deep knowledge of all the ins and outs of its products
  • Captive insurance agents get paid on commission, meaning they get a percentage of the cost for each plan they sell. However, these commissions tend to be lower than what independent agents receive. This makes it less likely for them to push expensive products you don't need so they receive a higher payout.


  • Since they only work for one company, captive insurance agents can't search for lower-priced products other insurers offer. This means they can't be your one stop shop for comparing quotes.
  • Further complicating any hopes of comparing prices, each insurance company describes the discounts and factors that can affect your rates differently. For instance, both Nationwide and Allstate offer discounts for drivers without accidents or tickets on their record for the past five years. Nationwide calls this their Safe Driver discount, while Allstate refers to it as their Premium Plus discount. If you're speaking with many different captive agents trying to compare one plan against another, then sorting through all these labels adds another layer of complexity.

Independent insurance agents

Independent insurance agents work with multiple insurance carriers. They basically shop around with different insurers for you.


  • Independent insurance agents are, you guessed it, independent. Since they're not limited to just one company, they can offer you many plans from different providers.
  • Independent agents work on a higher commission than captive agents. That means they're more motivated to provide great service and keep you coming back year after year.


  • Since independent agents work on a higher commission than captive agents, they're more likely to sell you coverage you might not need so they make more money.
  • Working with multiple companies means that some agents don't possess the depth of understanding captive agents will have the features of each individual plan.

Comparing prices on company websites

The magic of Google and sites like Quote is that everyone can act like their own insurance agent, getting quotes and comparing prices so they can find the cheapest car insurance companies.


  • You can shop around for every possible car insurance company on your own schedule, looking for which plans offers the best coverage for the lowest price.
  • Doing it yourself means searching on your own schedule without worrying when your agent is available.


  • There's a ton of car insurance companies out there. Consumer Affairs lists over 50 of them on its website. That means a lot of clicking around before you know which offers the lowest price for the right coverage.
  • Learning the ins and outs of every plan takes a lot of time. Sometimes it can be difficult deciphering the terms and conditions of a plan without an agent's expertise guiding you.

How to shop for car insurance

Whatever way you decide to conduct your quest for cheap car insurance, comparing multiple quotes will be the most important part. This advice popped up frequently when we compiled advice from 39 experts on getting the best rates on car insurance. Janet Ruiz of the Insurance Information Institute offered the following tip:

"Don't choose your insurer because you like a company's ads. Compare at least three quotes for your insurance, and make sure that you're comparing the same coverage levels. You can save hundreds of dollars a year by shopping around."

Making cheap car insurance even cheaper

The savings don't have to end once you purchase the best cheap car insurance plan you can find. There are tons of tricks for making a low rate even lower. Whether it's something simple like getting a new anti-theft system or a life-changing event like getting married, you can keep more money in the bank by taking steps to cut your premiums.

Auto Insurance Customer Prefer Digital Interaction Channels

There are a ton of ways you can save if you just know about them.

Finding the best cheap car insurance means looking around.

Finding an affordable rate on great insurance frequently takes using some combination of all the different ways of shopping for car insurance. Look around online for who may be offering the best quotes on car insurance coverage, and then speak with a captive or independent agent for a detailed explanation of a specific plan's ins and outs. You can't save money without first knowing what's available.

The bottom line

Finding and keeping the best cheap car insurance rates requires comparison shopping, getting the right coverage, and staying informed. Getting the lowest rates means you can spend more money on the stuff that actually matters – vacations, hobbies, and paying off that pesky credit card debt!

What's been the best way you've found to lower your car insurance? Let us know in the comment section below.

Car Tips From the Pros: Quotes, Coverage, and More

100 Experts Explain How New Drivers Can Get Cheap Car Insurance

If you’re a new driver – or a parent of one – finding affordable auto insurance can seem both confusing and costly. With so many companies and quotes at your disposal, it’s hard to know how to get the coverage you need at a price you like.

That’s why we’re bringing you a little expert help – or a lot of it, actually! We reached out to dozens of leading experts in the field of auto insurance and asked them to give you their tips for new drivers seeking cheap car insurance.

Check out their advice below; what they say could change what you pay!

Tell us what you're looking for,
and we'll sort the expert tips for you!

Showing 100% of Tips

Ready to put that expert advice to good use?

See how much you can save:

By clicking the button above, you certify that you have read & agree to our Privacy Policy & Terms of Website Use. Questions? Please Contact Us.