Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 24, 2020

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Here's what you need to know...

  • As a consumer, you may only be interested in finding low rate insurance or the cheapest policy
  • However, your insurance company is only interested in providing coverage without losing any money
  • To understand why these industry secrets are important, it’s first necessary to understand how auto insurance works
  • Find the lowest car insurance rates by comparing quotes at a third-party website. Get online quotes and save up to $859 a year.

Most of us who own cars want low rate car insurance premiums. There are a few aspects of car insurance coverage and rates that most people don’t know about.

A car insurance company is risking a potential financial loss every time it agrees to cover a driver.

That risk must be weighed against the company’s potential to earn a profit from the money collected in premiums.

How do you get the lowest car insurance rates? You can compare car insurance rates online right now, by simply entering your ZIP code in the above FREE tool.

Table of Contents

Low-Rate Car Insurance Requires Good Credit

You need a fairly good credit rating in order to get the best price on your car insurance policy. You may think that your credit scores are in no way related to your risk is a driver, but unfortunately, statistics indicate otherwise.

Usually drivers with a poor credit history are also more likely to file a claim.

Accordingly, they now assign drivers with poor credit histories a higher rating of risk; as your risk potential goes up, so do your rates.

So the next time someone tells you that cleaning up your credit rating will help you get better rates on loans and mortgages, remember that it will also get you better rates on your auto insurance.

If you have no credit to clean up, establishing credit with a prepaid credit card is a good way to get started.

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Adjust your Deductibles for Low Rate Car Insurance

If you’re a relatively safe driver with few or no insurance claims throughout your driving career, consider raising your deductibles.

In case you don’t know, a deductible is the amount of money you would pay to cover damage after an accident before your insurance policy kicks in.

Raising your deductible is a measured risk because it could cost you if you have a serious accident.

But for most people who are relatively safe drivers, increasing deductibles is an effective way to reduce monthly premiums with a relatively low risk.

Even if you do file a claim in the future, the amount of money you save could still end up being more than your deductible, if factored out for the life of your insurance policy.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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Who has the cheapest car insurance?

If you’re serious about getting low auto insurance rates, you must also be serious about what type of car you purchase. Some cars are more expensive to insure than other cars.

Minivans, small sport-utility vehicles and crossovers, and mid-sized sedans tend to be the cheapest cars to insure.

These cars tend to be very inexpensive off the lot, are generally considered safe, maintain a decent Blue Book value, and are not high on the list of car thieves.

Discounts for Low Rate Car Insurance

Finally, when you’re shopping for low rate auto insurance always ask about discounts.

You may be able to get discounts for things like:

  • Using public transportation for your daily commute
  • Parking your car in a garage overnight
  • Taking any number of defensive driver courses

Some discounts drivers qualify for easily while others require some effort. But either way, they are available if you ask.

Start your search for low rate car insurance with FREE online car insurance quotes by entering your ZIP code now.

References:

  1. http://www.consumerreports.org/cro/car-insurance/credit-scores-affect-auto-insurance-rates/index.htm
  2. https://www.thebalance.com/how-does-a-prepaid-card-work-960201
  3. https://www.esurance.com/info/car/car-insurance-deductibles-the-basics
  4. http://www.kbb.com
  5. http://www.marketwatch.com/story/11-little-known-car-insurance-discounts-2013-10-22