The Cheapest Car Insurance for December 2021
Your car insurance rate is creeping up, and you’re worried that it’s too high for your budget.
Or, maybe you just want to confirm that you’ve done everything possible to obtain the lowest possible rate. Here’s what you need to know about buying the best cheap car insurance.
How to Buy the Cheapest Car Insurance
The cheapest car insurance that you qualify for depends on multiple factors, including:
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- The minimum coverage levels for your state
- Pricing models used by your state
- Your auto insurance company
- Your driving record
- Your credit history
- The type of automobile you’re insuring
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Cheapest Car Insurance by State
The premiums for similar insurance policies vary depending on the state where you purchase your car insurance.
Each state has its own laws about the minimum level of coverage you need. States with higher minimum coverage levels usually have higher insurance premiums.
For example, a state that requires you to buy underinsured or uninsured coverage and personal injury protection will have higher average premiums than a state that only requires bodily injury and property damage liability.
States with a lot of rural roads and minimal traffic often have lower premiums because drivers are less likely to get into accidents.
The cheapest states for car insurance are:
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- Iowa: Average annual premium of $382 for minimum coverage
- South Dakota: Average annual premium of $387 for minimum coverage
- Wisconsin: Average annual premium of $396 for minimum coverage
- North Dakota: Average annual premium of $422 for minimum coverage
- Wyoming: Average annual premium of $422 for minimum coverage
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Cheapest Car Insurance by Auto Insurance Company
Car insurance premiums vary among insurance companies. This makes it imperative to shop around so that you can get the best cheap car insurance.
USAA offers the cheapest average premiums for minimum coverage levels. The average annual premium is $384.
However, only individuals with a military affiliation may purchase insurance policies through USAA.
Geico is available to drivers nationwide and has the next lowest average premium. For minimum coverage, the average annual premium is $433.
One reason that Geico can offer low premiums is that the company has a variety of discount options.
Amica has premiums lower than Geico ($405 for an annual policy with minimum coverage levels), but they don’t offer policies in Hawaii or coverage for ridesharing drivers.
Erie Insurance Company also offers cheap auto insurance, but they’re only available in 12 states and Washington DC. This company has a program that allows you to lock your insurance premiums so that they don’t increase. As long as you don’t make changes to your insurance policy, your premiums will stay the same. An average annual premium for a policy with minimum coverage from Erie is $409.
Cheap Car Insurance After an Accident or DUI
One of the main things that insurance companies use to calculate your insurance premium is your driving record.
If your driving record includes an accident (even if you weren’t at fault or had minimal fault assigned to you) or a DUI, this will likely raise your insurance premiums.
To lessen the impact of an accident or DUI on your premiums, look for a policy that offers accident forgiveness.
Or, see if you can sign up for a defensive driving course in exchange for a lower rate.
If you’re committed to safe driving behaviors, signing up for a usage-based auto insurance policy can help you lower your premiums.
With usage-based insurance, your insurance company uses a device to monitor your driving behavior, like your braking habits and acceleration speeds.
If you exhibit safe driving behaviors, you may qualify for a lower insurance premium.
Cheap Car Insurance for New Drivers
New drivers are inherently risky for insurance companies to insure. A new driver has a limited driving record and they have less overall driving experience.
To find cheap car insurance for new drivers, make sure that you take advantage of any discounts they qualify for.
Some companies will offer lower rates for new drivers who have good grades, while others offer reduced rates for new drivers who complete a safe driving course.
Shop around and compare various policy options to figure out the cheapest insurance policy for a new driver.
It’s usually cheaper to add a new driver to an existing driver’s insurance policy rather than purchasing their own insurance.
However, you should always request premiums for both options to make sure you get the lowest rate.
How Does Poor Credit Impact Your Ability to Buy Cheap Car Insurance
Insurance companies use your credit history to calculate your car insurance rate. In general, drivers with good credit are less likely to file multiple insurance claims.
Having a poor credit score can raise your insurance rates by as much as 61 percent. To lower your rates and boost your credit, make your debt payments on time and work to reduce your usage of revolving credit.
How the Make and Model of Your Vehicle Impacts Your Rates
A vehicle with a lot of safety features and that’s affordable to repair will have a lower insurance premium than a car with minimal safety features or a vehicle that requires extensive labor and costly parts to repair.
Cars with powerful engines that can travel at high speeds also tend to be more costly to insure.
Frequently Asked Questions About the Best Cheap Car Insurance
Check out these helpful answers to some of the most frequently asked questions about how to get the best cheap car insurance.
Does DUI Diversion Affect Car Insurance?
Some drivers arrested for DUIs qualify for a DUI diversion program.
A DUI diversion program allows some first-time offenders to accept responsibility for their actions and complete a series of activities.
Once these activities are complete, your DUI is dropped from your criminal record.
However, just because a DUI is dropped from your criminal record doesn’t mean that it’s necessarily dropped from your driving record.
Your insurance company considers your driving record when determining your insurance premiums.
While a DUI diversion will likely result in lower insurance premiums than a DUI conviction, it’s likely to increase the cost of your insurance somewhat.
Opting for a DUI diversion is still an effective way to get cheap car insurance after a DUI.
Is MMG Car Insurance Cheap?
Maine Mutual Group, also known as MMG, is an insurance company that serves the following states:
- Maine
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- New Hampshire
- Vermont
- Pennsylvania
- Virginia
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They also underwrite policies for US drivers who drive in Canada.
MMG is a well-established insurance company that began offering policies in 1897.
Since MMG serves drivers in states where insurance premiums are higher than average, they’re not cheap compared to an insurance company that offers policies in states with low average premiums.
However, if you live in one of the states that MMG serves, MMG is a great option for cheap car insurance.
They have programs that offer lower rates for customers with clean driving records or automobiles with certain safety features.
Bundling multiple policies with MMG (like your home and auto policies) also qualifies you for a lower rate.
Can Geico Save You 15 Percent or More on Car Insurance?
Geico makes the claim that it can save you 15 percent or more on car insurance in 15 minutes or less.
How much Geico can save you (and whether it’s the best option for cheap car insurance) depends on your specific information and your state.
In general, Geico offers some of the lowest insurance rates, and they’re often lower than a state’s median insurance rate.
For many drivers, switching to Geico will save them 15 percent or more on their car insurance premiums.
However, Geico isn’t always the cheapest overall option for car insurance. It’s best to get quotes from multiple insurance companies to ensure you’re paying the lowest auto insurance premiums for your coverage needs.
What are My Options for Cheap Impounded Car Insurance?
If your car is impounded, you’ll have to submit the required documentation to get it back. This documentation includes proof of auto insurance.
You have a couple of options for cheap impounded car insurance.
One alternative is to purchase a conventional auto insurance policy, and take steps to lower the cost (such as increasing your deductible, lowering your coverage limits, or purchasing more than one type of policy).
However, if a conventional auto insurance policy is too expensive for your budget, another alternative is to buy temporary impounded vehicle insurance.
Temporary impounded car insurance is a type of short-term auto insurance designed to help you meet the qualifications to get your car out of impound.
The longer your car is in impound, the more it will cost you to get it out.
Many auto insurers charge expensive rates for vehicles that are currently impounded because they’re considered high risk.
Using temporary impounded vehicle insurance will give you extra time to shop around to find the lowest insurance rate and ensure that your car is out of impound when you buy a long-term insurance policy.
The Bottom Line
To find the cheapest car insurance, it’s essential to shop around with multiple insurance companies. Utilize any discount programs that you qualify for and work to improve your credit score so that you’re eligible for the best rates.
