How to Get the Cheapest Car Insurance

Cheap Car Insurance on Minivan
••• Getty Images/Stewart Cohen

Ever wonder what the cheapest car insurance option is for you and your family? It definitely takes a little research to determine what company is offering the best rate. One thing we know for sure is that in the majority of states, auto insurance is absolutely mandatory -- and the penalties for not having insurance are never worth the risk. But despite the fact that you need it, you can’t wait for an annual sale (if only!). However, there are still ways to make sure you are getting the cheapest insurance rate possible.

If you review each of these seven steps, you will be well on your way to the lowest priced car insurance of your life.

1. Shop Different Insurance Carriers

Rates can vary widely between major insurance companies -- and small ones, too. One company may deem you an average risk and charge you an average rate, while another may find you to be a preferred risk and give you a much lower rate. Others still might deem you an above-average risk, and you definitely want to avoid those insurance options! A couple of ideas to make shopping easier include contacting an independent agent or using an online quoting website, as well as speaking to local friends and family about the insurance coverage they have, since rates and policy options vary widely across state lines.

Independent insurance agents have access to multiple carriers and can guide you to the best company without the pain of making lots of phone calls. For the web savvy, various online quoting websites are popping up to help find the cheapest company for you as quickly as possible. Just make sure that any website or person that you give personal information to (especially financial information!) is trustworthy.

2. Bundle All Insurance Policies

Policies grouped together are almost always cheaper than policies insured with different companies. The multi-policy discount is a great way to save money on insurance. If you are insuring multiple cars, homes, and toys then insure them all with the same company to maximize your savings.

3. Verify all Discounts Available

Car insurance companies are notorious for odd discounts. Know all the possible discounts and verify which ones you are receiving. A couple of discounts to inquire about are the homeowner discount, paid in full discount, and good student discount. Regardless of how many discounts a company offers, it is the final price that counts.

4. Keep a Clean Driving Record

Safe drivers get some of the best rates. If you are looking for the cheapest rate possible sometimes it can come directly from your own actions. Set your cruise control, turn your cell phone off, and consciously pay attention to the road.

5. Good Credit

Good credit is another example of how your actions can influence your insurance rates. Whether you agree or disagree, most insurance companies are basing your rate off of your insurance credit score. Keep your credit score high and your insurance credit score is sure to follow. A great insurance credit score can leverage surprisingly low insurance premiums.

6. Avoid Fees

Look for ways to avoid extra fees. Lots of insurance companies charge payment fees. Essentially they are charging you for the processing and paperwork of your bill. Paying your premium in full or having your payments taken automatically out of your bank account could save you some money. Late payment fees can be even higher so be sure to pay on time. Also, find out if combining multiple policies into one billing account can lower fees.

7. Get the Right Coverage

The coverage you carry on your vehicle is a personal choice. Determine the value of your vehicle and weigh the value against the cost of full coverage. Be smart; if you are not driving one of your vehicles put it in storage. If you do not know all your coverage options, get advice from an experienced agent.

What do you do after evaluating each of these seven steps and you are still not happy with the price of your car insurance policy? I do not think anyone is exactly happy to pay car insurance. Most people really want to know they are paying a decent rate. Keeping an eye on your credit score and driving record can drastically improve your car insurance rate over time. When your credit score improves or a traffic violation falls off your record, it is time to shop for a new policy.

Getting the cheapest car insurance possible is something that needs to be reviewed every few years if not more. Car insurance is always changing along with your history and future needs. Talk with your insurance agent for a review of your policy and if you do not like the results, call around for some quotes for comparison.