Wouldn’t it be nice to get free auto insurance? Full coverage without premiums, deductibles, and other costs might sound like a dream. But it turns out that the requirements and details are a bit more complicated.
That’s because auto insurance is based on shared risk. Riskier drivers pay more for their policies. Lowering your rates might require taking on more risks yourself by dropping extra coverages or having a higher deductible.
That said, it might be possible to qualify for free auto insurance or to get a car with insurance included in a few specific scenarios. Learn more about it.
- Free car insurance doesn’t really exist.
- Some states offer insurance cost-assistance programs. And some dealerships may offer cars with coverage included in the price.
- Be skeptical of offers of free or extremely low-priced insurance. Look closely at the terms and requirements before agreeing to a policy.
Does Free Car Insurance Exist?
There may be a few assistance programs or all-inclusive auto leasing agreements out there. But free car insurance doesn’t really exist. However, you should be able to find free insurance quotes or policy estimates. These quotes should always be free.
You might see advertisements for “cheap” auto insurance; they may claim to have prices lower than any other policy. Be skeptical. Some offers may be fake insurance with a forged contract. For instance, older adults have been targeted with fliers for low-cost insurance that didn’t actually exist.
The National Association of Insurance Commissioners warns of any agent who uses high-pressure tactics or offers rates 15% to 20% lower than competitors. Also, be skeptical if you can’t find the company’s information.
Purchased and Leased Cars and Free Insurance
Some dealerships offer free insurance bundled in with a new or leased vehicle. In the past, GM and MetLife offered a free year of auto insurance. This was only for buyers of specific new models in certain states. Volkswagen offered a similar option in 2005.
You can lease a car from Volvo with insurance included. This all-inclusive monthly lease is almost like a subscription. It includes auto insurance from Liberty Mutual. And it also has gap insurance in case the car is totaled.
This plan, called “Care by Volvo,” offers a limited number of vehicles with starting prices ranging from $825 to $1,090 per month. In the UK, Peugeot offers a similar car-plus-insurance option on newly purchased vehicles.
Some dealerships do include gap coverage with their leased vehicles. It depends on the state where you’re leasing the car. This coverage helps make up any difference between the car’s actual value if totaled and how much you owe on the lease. But this is only as long as you have the required insurance. Other dealerships charge for optional gap coverage.
Rental Cars With Free Insurance
Some rental cars come with liability insurance. It depends on the state and rental agent.
This helps cover any bodily damage or physical property damage you cause to others. But what if you're at fault for an accident? You could still be responsible for damage to the rental vehicle. There are three common ways of dealing with insurance and rental cars. You can:
- Purchase damage waivers from the rental agency.
- Use your own car insurance policy to help cover any damage. Be sure to ask your insurer first.
- Use your credit card’s primary or secondary damage coverage.
Should You Accept an Offer of Free Insurance?
What if you’re offered free insurance? Or what if you're offered insurance included in a purchase or lease? You should be sure to investigate what you’re actually getting.
For instance, the Volvo plan described above includes your state’s minimum liability insurance or more. But all the coverages and limits are selected for you, And they can’t be changed. The insurance coverage also prohibits using your car for ridesharing or delivery. That means you couldn't get Lyft or Uber side gigs.
You’d also want to compare the costs. Look at a short-term, all-inclusive lease like Volvo’s. Then, look at the costs of standalone financing or leasing options if you shop for your own insurance.
What to Ask Before Signing Up for Insurance
If you’re offered incredibly low-price or free insurance, the Los Angeles County District Attorney’s office suggests that you should:
- Get the first and last name of the salesperson and their insurance license number.
- Ask the salesperson for the name of the insurance company. Then, call the company to verify the agent’s identity.
- Go to your state’s department of insurance website to verify whether the salesperson is licensed.
In addition, the Coalition Against Insurance Fraud recommends paying via a non-cash method. Also be sure to get a receipt, and contact the insurer if you haven’t received your policy documents within 60 days.
What Programs Help With Car Insurance Costs?
Some state programs are available to help lower the cost of auto insurance for those who meet income requirements. However, these programs are limited to three states:
- New Jersey
Hawaii offers free no-fault auto insurance to eligible households.
How Can You Save on Car Insurance?
Insurance can be expensive, particularly if you’re a high-risk driver—but coming up with enough cash to cover an annual premium upfront can be difficult for anyone. Here are some ways to consider saving money on your auto insurance:
- If you can’t pay for a year’s worth of car insurance, ask to break your payment into smaller monthly installments. Ask if there’s a fee for doing so.
- Ask to raise your deductible on collision and comprehensive coverage to lower your premium. Just be sure that you can afford to pay the deductible in an emergency.
- Some states require insurers to provide you with discounts for having a car with safety and anti-theft equipment.
- Insurers may offer discounts for taking a safe driving course, being an accident-free driver, or choosing a paperless policy.
- A mileage-based auto insurance plan could help you save money. This is especially true if you don't drive often.
- Get quotes from a variety of cheap auto insurance companies to compare rates and coverage.
- Work on the variables that affect your auto insurance rates. This could include your driving history, credit history (in some states), and car usage.
The Bottom Line
You may not be able to easily get a car with free insurance. But there are ways to lower your auto insurance premiums and get more affordable insurance. However, you should also investigate and be skeptical of any offers for free or heavily discounted car insurance.