The best deals on car insurance premiums are typically found by shopping around. Comparing quotes can be done at any point in your coverage — and it’s advisable to get at least three — but the best time to shop for car insurance is often specific life events or at various points throughout the year.
A good driving record can also help keep car insurance costs low, but take heed — purchasing at the wrong time can cost you. Learn more about when you should consider shopping for car insurance and how events and timing can impact your premiums.
- Car insurance policyholders should shop around for new rates regularly as personal factors, coverage needs and financial situations change.
- Car insurance rates have increased by 14.5% as of February 2023. 44% of shoppers are market pricing checking and 42% are investigating their options due to rate hikes.
- Life-changing events, end-of-year inventory car sales and policy renewals are some of the best times to shop. The worst is after letting a policy expire or getting a DUI or SR-22.
When is the best time to shop for car insurance?
Personal factors can significantly impact the amount you’ll pay for car insurance. Rates can vary greatly based on where you live, how old or experienced a driver you are, your credit history, coverage limits and deductibles.
According to CarInsurance’s analysis, the average rate for state minimum coverage is $511, liability (50/100/50 limits) is $637 and full coverage (100/300/100 limits) is $1,682. As rates continue to fluctuate, up 14.5% as of February 2023, it can help you save money by estimating your car insurance costs regularly. You can also save by comparing quotes and learning the best times to shop for car insurance.
The end of the year is the best time to shop for car insurance
Shopping for car insurance at least once a year is an ideal starting point for most consumers. On average, 25% of Americans shop for a new policy annually, which can help them save money with a new insurer. In a recent study by J.D. Power, 44% of shoppers say they’re price checking and 42% explore options because of rate increases. However, the best time to shop for car insurance is at the end of the year.
Car dealerships clear out their inventory at the end of the year or when the new models come out, which makes it an ideal time to get discounts and incentives from dealers and car insurance price shop and research your policy options. It’s important to look into gap insurance if you’re considering purchasing a new vehicle. This type of coverage provides financial security if your vehicle is totaled before you pay off the loan or lease.
The end of the year is a good time to review your current policy for updates or discounts or price shop for new quotes. As you take inventory of your financials and budgets, annually reviewing your car insurance options in December is a great way to set your new year up for some cost-savings.
Shop for insurance when you’re buying a car
Taking your new wheels for a spin is a thrill, but you must have the right car insurance coverage for your investment. A good time to shop for car insurance is when you’re thinking of buying a car.
To help save time and money, shopping around for car insurance for your future car can identify coverage options and policies you can compare before you start test driving your next investment – and you’ll get an idea of how much it’ll cost.
If you’re purchasing a new vehicle or taking out a loan, your lender will require full coverage insurance — liability, comprehensive and collision coverage — before you drive off the lot.
You should consider gap insurance coverage if you’re financing a vehicle – a gap policy will pay the difference between the actual cash value (ACV) of your car if you get in an accident and the amount you still owe.
While shopping around may land you a great deal, don’t forget to have your current insurance company provide you with a new quote. You may save money by staying a loyal customer.
Learn more: How to insure a new car detailed guide
Shop when you’re renewing your policy
Your car insurance renewal is nearing, so now’s the time to consider your needs. Have you experienced a job change? Maybe you want to shift from full coverage to state-minimum liability? Perhaps you’re tightening your budget and are looking for ways to save. Before auto-renewing, take some time to shop for rates.
If you’re not staying on top of every change your policy is undergoing throughout the year, now is the best time to shop for car insurance options, terms and coverage to see if you can get a more affordable rate.
Additionally, you’ll skip any penalties your insurance company may charge for switching during your policy and maintain your monthly payment schedule as you’re stopping coverage with one provider and picking up with another.
Shop during significant life changes (getting married, adding a teen driver, after an accident, etc.)
Life changes often require adjustments to be made. Sometimes, this includes filing paperwork and reassessing needs. One of the best times to shop for car insurance is during a life-changing event. Again, car insurance companies quote based on personal factors. If you want to add your spouse to your policy, there can be significant rate decreases as a married driver compared to a single one.
You could be looking at a rate hike by adding your teen driver to your current policy or after an accident hits your driving record – moving to the same town can cause price differences. Remember to shop around for car insurance quotes to see what savings are possible when there’s a significant change in your life.
Check out our detailed guide on how often should you shop for car insurance
When is the worst time to shop for car insurance?
Shopping for car insurance isn’t always your best option. Sometimes, life experiences and timing do not work in your favor when saving on your premium. Car insurance companies view some personal factors as high-risk and may penalize your policy or hike your rate. This often means that despite shopping around, you’re not going to find savings and may find higher premiums than your current one.
After your policy has expired
While shopping for a new policy at renewal time is often a good idea, remember to switch policies before your current policy expires. Otherwise, you could face a lapse in coverage penalty.
According to CarInsurance.com’s rate analysis, a 30-day lapse in coverage increases your rate by 14% — which varies by state. A lapse in coverage can lead to losing driving privileges and reinstatement fines. The best time to shop for car insurance is when you receive your renewal policy or switch companies during your policy to avoid lapses in coverage.
After a DUI or if you need an SR-22
Getting a DUI or needing an SR-22 form is not the time to shop for better car insurance rates. On average, insurance premiums increase by 40% to 90% after a DUI but can be as high as 307% based on the state you reside in. While it may seem like the best time to shop for car insurance is after this kind of a life change, it’s a major infraction on your driving record and leaves you with a suspended license.
You may be dropped by your current insurance company, which will require you to shop for a new policy, but as a high-risk driver, you can anticipate high premiums until the DUI is removed from your record.
Resources & Methodology
Sources
- Insurance Information Institute. “Nine ways to lower your auto insurance costs.” Accessed June 2023.
- J.D. Power. “2023 US insurance shopping study.” Accessed June 2023.
- J.D. Power. “Get car insurance before buying a car.” Accessed June 2023.
- Statista. “How often do Americans comparison shop for car insurance.” Accessed June 2023.
Methodology
CarInsurance.com commissioned Quadrant Information Services to pull rates in 2022 for a 40-year-old male driver with a good driving record, 12-mile commute to work and full coverage insurance.
Ask the Insurance Expert
Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
Ask the Insurance Expert
John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
Ask the Insurance Expert
Leslie Kasperowicz
Managing Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
Ask the Insurance Expert
Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.
