Negotiating Car Insurance Rates [Survey Results]

Here's what you need to know...

  • Negotiating car insurance quotes saves drivers about $220 annually
  • Only 42 percent of Americans negotiate their car insurance rates
  • People who buy their car insurance online pay about $38 less each year

Negioating Car Insurance Examining How People Reduce Their Annual Payments

America typically runs on a fixed price system: You go to the grocery store or shop for clothes, and the price on the tag is the price you pay. There’s no haggling with the cashier because the only way to get a lower price is typically when the items go on sale.

But in other aspects of the purchasing world, Americans walk in ready to negotiate. Car dealerships, yard sales, and even your boss’s office are the perfect place to pull out those bargaining skills and get the deal you want.

Most people don’t know that negotiating is possible in other areas – one of which is car insurance.

Choosing your car insurance typically involves requesting a quote and deciding if it fits your budget. But what happens when people negotiate their rate instead? We surveyed over 1,000 people about how they purchased car insurance and how much money they saved (or could have saved).

Keep reading because the benefits of negotiation will probably surprise you.

Strategies to Save Money on Your Premiums

Top Way to Save on Car Insurance by Average Annual Insurance Savings

Consumers may recall the promises made by a man named Mayhem and a talking gecko in memorable commercials, but the discount programs offered by car insurance companies like “good student” and “safe driver” saved respondents just under $12 annually. Research saved consumers a bit more, averaging nearly $53 in savings per year.

Negotiating, on the other hand, was by far the best way to save on car insurance, saving drivers about $220 annually.

Start by Doing Your Research

The more time spent researching and the greater the number of car insurance quotes one receives, the more likely one is to save money annually. Most people understand their car insurance policy and doing so means, on average, over 80 dollars in savings annually.

Thanks to the internet, information on buying car insurance is everywhere. From full guides about coverage to free online quotes from the top providers, researching before buying is easier than ever. Nevertheless, many people forgo the background knowledge.

Just 31 to 60 minutes of research saved auto drivers an average of $8.72 annually. Bump the time to at least an hour and savings more than doubled, with drivers saving $20.60 on insurance each year.

While savings increase alongside research, comparing quotes saved drivers even more. Those who purchased the first quote they received spent an average of $62.70 more annually, while annual savings for those who looked at just one to two quotes increased by nearly $8. Collecting five to six quotes before settling with a plan seemed to be the sweet spot – drivers who viewed at least five quotes paid $86.12 less per year.

Picking the lowest priced quote may seem like common sense, but it’s also important to understand the coverage you’re getting. Luckily, 87% of drivers were aware of their car insurance plan, and understanding their policy saved them over $85 per year.

By understanding the different types of coverage, drivers can pick the policy that best fits their needs and not pay for things that won’t benefit them.

Happy Haggling! It Works

More people don't negotiate their car insurance rate than do. Millennials are more likely than Generation X or Baby Boomers to negotiate their policies. On average, annually, people save 220.16 dollars after negotiation. Men are more likely to negotiate than women , and while discussing cost of policies mentioning providers competitors helped lower annual premiums. Though, respondents that threatened to leave their providers experienced an increase in their premiums.

Dropping insurance coverage may be a common way to save on annual premiums, but negotiating with companies can lead to significant savings without sacrificing protection.

Those who negotiated their car insurance rate saved an average of nearly $220 annually, yet 58% of drivers didn’t haggle with their providers.

Millennials and men were the most likely to use their negotiation skills, while baby boomers and women were the least likely to do so.

Negotiation techniques vary depending on the product, and citing competitors and threatening to leave can be common when buying a car. However, while mentioning competitor rates saved respondents close to $30 annually on their car insurance, threatening to take their business to a different insurance provider wasn’t as successful.

In fact, not threatening to leave saved drivers more money – those who threatened to leave their current provider paid over $67 more per year compared to those who didn’t.

Don’t Phone a Friend

Most people rely on themselves over friends and parents for help in negotiating car insurance. and people who relied on their parents or themselves experienced the largest savings annually.

Regardless of the negotiation technique, haggling success comes down to the person. Considering men see better results from negotiation than their female counterparts, it may seem obvious to turn to a male family member or friend to help snag a deal.

Take note: our study found the best deals were achieved when drivers relied on themselves to negotiate.

While 80% of people negotiated without any help, 13% turned to their parents for support, and 7% brought a friend to the table.

Negotiating without help, though, saved drivers an average of $234.14 annually. But bringing parents to the table wasn’t drastically different. Parental advisement saved drivers an average of $214.59 on their annual premiums while relying on friends ended up costing drivers $12.57 more per year than if they hadn’t negotiated at all.

Remember, It Doesn’t Hurt to Ask

Most people ask about discounts when setting up their car insurance, and those that did experienced a small reduction in their annual insurance rate.

Like any other business, car insurance companies are concerned with attracting and keeping customers. While this often boils down to affordability, cheaper car insurance may only provide minimum coverage and cost drivers in the long run.

Taking advantage of discounts is the safer way to lower annual premiums while ensuring coverage stays the same. But with so many discount options, it can be difficult for consumers to know what they are eligible for.

Generally, the only way to ensure the best possible deal is to do research. Seventy-seven percent of drivers asked about available discounts when setting up their insurance. And those who did saved an average of $11.49 annually compared to those who didn’t.

Get a Bargain from the Comfort of Your Home

People set up their car insurance mostly over the phone and online, though some still did in-person. However, people who set up their insurance in person reported having the easiest experience when compared to over the phone and online. The biggest takeaway of all would be that people saved the most money annually online when compared to over the phone and in person.

Thanks to the internet, researching car insurance coverage, comparing quotes, and even picking a plan is easier than ever.

But are buyers also negotiating online?

The majority of respondents picked up the phone to negotiate a better deal, while 36% of people kept their negotiations online. Despite a change toward a more online world, 24% of people opted to negotiate a deal in person.

Negotiating face to face was reportedly the easiest form of negotiation. Sixty-five percent of those choosing in-person negotiation found it to be easy, while half of those choosing online negotiation thought it was difficult.

When it came to savings, those who set up their insurance online spent an average of $37.56 less annually compared to those who set it up in person.

Should I switch providers to lower my rates?

People that didn't switch car insurance providers over the past 5 years experienced the largest savings, though people most loyal to their car insurance provider were least likely to negotiate rates and reported paying the highest annual premiums.

Switching car insurance providers can be a smart decision for getting a lower premium, but Americans seem to be loyal to their current providers.

The average respondent said they switched car insurances just once over the past five years. While switching providers can be beneficial monetarily, switching too often isn’t good either.

Auto insurance consumers who did not switch providers in the past five years saved an average of $46.75 annually, while those switching twice or more saved an average of only $34.42.

Loyalty to a provider doesn’t mean accepting their rates without question, though. Respondents who said they were extremely loyal to their providers were the least likely to negotiate, and those on the upper end of the loyalty scale paid the most for car insurance each year.

Compared to an annual premium of $1,524.44 for those classifying themselves as slightly loyal, self-professed extremely loyal customers paid an average of $1,638 annually.

Simplifying the Process: We’re Here to Help

There’s no denying that car insurance is expensive.

Doing research before buying, comparing quotes, and negotiating for lower rates are the best ways to ensure you get the most bang for your buck.

With so many providers, plans, and available discounts, though, starting the search can be intimidating. That’s why Car Insurance Comparison is here to make the process simpler.

Enter your zip code and compare hundreds of quotes from the top car insurance companies to find the plan and rate that work best for you. Visit us online to start your search and put your negotiation skills to the test.

Methodology

To perform this study, we surveyed 1,008 people using Amazon’s Mechanical Turk platform. To qualify for the survey, respondents had to be currently paying for the car insurance on their vehicle.

When calculating the average car insurance rates, we eliminated any outliers. We created a floor of $72, as that was the cheapest car insurance rate available from any major insurance provider we could find.

If respondents failed an attention-check question that was located about halfway through the survey, they were disqualified and their results were excluded.

Limitations

Self-reported data have some limitations. They include, but are not limited to exaggeration, telescoping, and selective memory. We can’t be sure closely our results line up to reality.

Fair Use Statement

As we saw in this study, negotiating insurance rates may seem difficult to do, but in the end, it pays off. Do you know what else pays? Sharing our results with your readership. All we ask is that it is for noncommercial purposes and that you link back to this page.

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