The Best Cheap Car Insurance Companies

June 19, 2013

Getting cheap car insurance involves your choice of car, aggressively asking for discounts, comparing insurers through consolidator sites, and more.

Discount Minded

When shopping cheap car insurance companies, the prices you are quoted depend on many variables. Some companies specialize in providing less expensive coverage on certain types of vehicles or to certain demographic groups of people. For example some companies are known for offering lower premium rates on cheaper vehicles to people with poor driving histories and credit scores, while other companies offer their best rates to well qualified drivers with higher than average incomes that drive more expensive vehicles. Of course there are many other factors that affect insurance rates, such as the area you live in, where your vehicle is kept and how far and often you drive.

Get Free Car Insurance Quotes >>

Choose Your Coverage
The first step in shopping for insurance is deciding what type of coverage you need and want. Decide on deductibles and coverage limits. Keeping your deductibles high will lower your premiums. It is important to make sure you have enough money to cover the deductible in the event of an accident.

Quotes
Getting tons of quotes is the best way to find a great deal when it comes to insurance. Insurance companies have different formulas and criteria when computing rates, so every quote you get will be a bit different. Soliciting lots of quotes guarantees that you will find a wide range of prices and coverage options to choose from. When you compare car insurance quotes, make sure you are being quoted the same coverage levels and deductibles. Always compare apples to apples.

Cheap Car Insurance for Economy Vehicles or Lower Incomes
If you own a less expensive vehicle or a vehicle considered to be an economy model, you should look at insurance companies that offer programs designed to attract drivers of less expensive cars. Statistics show that drivers of less expensive vehicles usually earn lower incomes and have lower credit scores than drivers of more expensive vehicles, that tend to be more affluent and have better credit scores.

Companies known to offer lower premium rates in these situations are:

Inexpensive Car Insurance for High End Vehicles and Higher Incomes
If you are fortunate enough to be in a higher income group, and enjoy a good or excellent credit rating, you will receive lower car insurance premiums in most situations. If you drive a high end vehicle or car considered a somewhat expensive or luxury model, there are 4 insurance companies that really offer the best overall average rates. These companies are:

While there are many companies that offer high income drivers with good credit low rates, the companies listed above are very aggressive in targeting this group of drivers. Not only do more affluent drivers make their insurance premium payments in a timelier manner, they also have far fewer claims than lower income drivers that drive cheaper cars. Consequently, the above insurers view these drivers as much lower risk, and price policies for this group accordingly.

Specialty Insurance Companies
If you own a specialty vehicle, such as an antique, classic or modified vehicle, you may want to avoid many of the mainstream or standard car insurance companies. Although you may be able to purchase a policy from mainstream companies, you will generally save a lot more money in the long run by going with a specialty coverage company. Companies like Grundy Worldwide, Hagerty Insurance and JC Taylor Insurance Agency all specialize in insuring hard to value classic vehicles. Insurance for these types of vehicles is always expensive; however, specialty coverage companies have many programs and options that can help owners of these types of cars reduce insurance costs.

Consolidators
These sites can save you loads of time. Filling out one simple form will return between 5 and 15 quotes from insurance companies and local agents. NetQuote and InsuranceQuotes.com are the most reputable.

Brokers and Agents
If you have general questions or are not sure what type of coverage you need, it is a good idea to use an agent or broker. An Internet search or a quick flip through the Yellow Pages will help you find a local agent.

Discounts
One way to lower your premiums is to ask for discounts. Insurance companies give discounts for a number of reasons. Make sure you are getting every discount you are eligible for. Insuring multiple vehicles, or multiple policies are just a couple of discount examples. You can also save money by passing a defensive driving course, paying your yearly premium in full or receiving your bills via email.

Local Cheap Car Insurance Companies vs. the Big Guys

The issue that comes up with cheap car insurance companies is trust. What do you do if you find somewhere local offering cheap car insurance and you're with one of the big companies? Should you cancel your policy and switch? It can be very tempting, but you really need to consider a number of factors before you make a change. Cheap can be good, as long as it doesn't end up coming at a price.

Reputation
Big insurance companies aren't perfect. People do have problems with them. By and large, however, they became big companies by paying quickly on claims and offering good service and rates. They've usually been around for decades and have dealt with thousands, if not millions of people. Most of those customers have been very satisfied in the past.

Cheap insurance companies are after your business. That's why they're cheap. This is usually because they're not established or they're coming out of a bad patch and want to grow. Undercutting the competition is one way to do that. The problem is that they might not have solid reputations.

Details
You need to look at what exactly is being offered by the car insurance provider. Make sure you understand what the deductible is. The larger the deductible, the more you have to pay before the insurance company picks up the tab. There are many resources where you can find great comparison information. You need to know what you are getting for the amount you are paying. Most cheap car insurance companies will not provide guarantees on any repairs or free courtesy cars when your car is being fixed.

Local
Location can be an attraction when dealing with cheap insurance companies. They have their office in your area so you feel the service will be better. That's not always the case. Big companies have regional offices and agents in most cities and towns. These days, with virtually everything handled by phone or online, location can be irrelevant.

First Time Drivers
If you're a new driver looking for cheap car insurance, price is going to be important. You're probably on a tight budget. Before signing with that local company, ask a few questions. Will the rate you pay be the same or less next year? What will happen if you have an accident? What kind of effect will it have on what you pay? Will they even continue to insure you?

With the big companies, you might pay more, but you generally know where you stand and that you won't be dropped for a single accident. You end up paying more, but you'll still have insurance.

Customer Reviews & Financial Information
However tempting the prices charged by the cheap car insurance companies, if they can't deliver as a company, then it's not money well spent. To determine their performance, you need to undertake plenty of research. Check online to see how other customers have rated them.

Get testimonials and reviews from others that have insurance from this company. Determine if the claims process is smooth or if customers have had problems. This is a great resource, and you can learn a lot about a company based on previous clients. If a company has many negative reviews, then you will want to stay away.

You also want to investigate the company's finances. If they are free of debt and are ranked well with business bureaus, you should not have any difficulties getting a claim filed. However, if the company does not have a long history or has questionable finances, you may have difficulties getting your money when you file a claim. It is best to determine this before you get insurance from them.

If you know people with the company, ask them about their experiences, particularly to discover if their rates have gone up. Find out all you can before you come to a decision. The big companies will still be there tomorrow; can you say the same about the cheap car insurance companies?

Watch out for Scams
There are many scams out there and you want to be savvy and avoid these. Make sure you know what the legal minimum insurance is required for your state. You also should see what the price is from large insurance companies. If the price you are being offered from an unknown company is dramatically different, you should be wary and do further research. Watch out for hidden fees. You may be getting a great price on your car insurance, but when you receive the first bill, the actual amount is much higher than quoted. Many companies will have hidden surcharges that are not apparent when you get a quote.