Question: How do I find an insurance company that will offer me low, or at least affordable, car insurance rates? I’m young and buying my first car. The quotes I’ve received so far are almost $1,000 a month and other insurance companies won’t even send me a rate quote. I need to save money.
Answer: When you are under 25 and getting your own car insurance policy, unfortunately, rates are going to be high. However, there are ways to try and get a more affordable rate -- the main way is to comparison shop with as many car insurance providers as possible.
Why cheap rates are hard to find
Drivers under age 25 have been found statistically to be the riskiest category of motorists to car insurance companies. The amount of accidents and claims for this driver class of immature and inexperienced drivers is high, so car insurance companies charge more money for insuring these risky drivers.
If you’ve already had an accident or been convicted of a moving violation, such as speeding, then your insurance company can surcharge you (place an extra charge on top of your insurance base rates) and thus you’ll be charged even higher rates. Basically, the bigger the risk you pose to an insurer, the more you’ll pay.
How to get affordable rates
You can’t change your age, but there are items that can help you obtain lower car insurance rates. This includes:
Keep a clean driving record. This will help you show the car insurance company that you’re maturing as a driver and not as big a risk, so that rates can be lowered. Don’t be dejected if you already have something on your driving record. Violations fall off your driving record in most states, and most insurance companies will only rate on a violation for three to five years (though some do go out to seven years).
Keep continuous coverage. If you’ve been on your parent’s policy until now, let insurers know to show that you’ve had continuous coverage and see if it reduces your rates. Also, get a car insurance quote with the auto insurer that your parents use. Some car insurance companies offer a legacy discount for staying with it when getting your first policy.
Ask for discounts. There are discounts available even for the youngest of drivers. For instance, if you’ve taken a driver training course, then some insurers will discount a portion of your policy. If you’re in school and get good grades, then ask about a good student discount.
Try out a pay-as-you-go (PAYD) plan. Several car insurance providers offer a decent discount if you allow a telematics device to be placed in your vehicle and monitor your driving behavior. If your speed, braking, times at which you drive and other tracked items find you to be a low-risk driver, a discount will be offered. Very low annual mileage is a factor as well, because it means less risk.
Change coverages. A liability-only policy will cost less than one with comprehensive and collision. However, don’t drop comp and collision to save if they’re truly needed -- they’ll be required for a financed or leased vehicle and most owners still want these coverages on a newer vehicle, even if it’s paid for.
Change vehicles. It might be the vehicle that you’re looking to buy and insure is causing your rates to be high. High-priced cars with powerful engines will always cost more to insure than small inexpensive sedans. You may need to find a different car to buy until you can afford the premiums on the one you really want. When getting quotes you can change out the vehicle to see which is cheapest to insure of the models you are thinking about buying.
Comparison shop. Car insurance rates vary greatly from one company to the next, so you it’s very important to compare car insurance quotes with multiple companies. Each car insurance provider looks at rating factors -- such as age, ZIP code, driving record, and the vehicle being insured -- differently so by shopping around you’re able to find the company that offers the cheapest rates for your particular rating factors. The difference in rate quotes can vary by thousands of dollars.