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How to Get the Best Rates on Auto Insurance

There's no escaping this; as long as you own or drive a vehicle, you must have auto insurance. However, no one ever wants to spend more than they need to on car insurance. If you are one of those people, we have compiled the following list of tips you can use to get the lowest possible rates on auto insurance:

1. Don't assume any single insurance provider is the cheapest

Big insurance companies spend millions on advertising to convince you that they offer the best rates on auto insurance. However, this is almost impossible as no single insurance company can be the price leader for everybody. The insurance provider that is cheapest for one person might be the most expensive for another person in a different state or driving a different car.

The best way to get the lowest insurance rates is by shopping around or going to an independent insurance agent.

2. Don't ignore local or regional insurers

Most people only trust the big insurance companies that they have been familiar with for decades. However, there are hundreds of smaller insurance companies, some of which could be offering much better rates than the established companies. Also, since they are smaller, they usually have higher satisfaction ratings compared to the big boys.

3. Ask about discount

The insurance industry has a lot of competition, which means that companies are always offering discounts to attract more clients. When shopping for insurance, always ask your insurer to explain to you all the discounts they have and how you can qualify for them. Remember to compare different companies' discounts.

Some of the common discounts include insurance bundling discounts, maintaining a clean driving record, making on-time payments for a long time, being a long-term client, being a member of a particular social group, installing safety features in your vehicle, among others.

4. Always pay bills on time

One of the factors insurance companies consider when determining premium rates is an applicant's credit score. According to insurance companies, a customer's credit score has a correlation with their chances of filing claims.

Having poor credit could increase your insurance rate by hundreds of dollars in a year. To avoid this, keep your credit score high by paying all your bills on time.

5. Before buying a vehicle, check insurance costs

Every car is different in the eyes of an insurance provider. Due to factors unique to different cars, insurance rates differ and some vehicles are significantly cheaper to insure than others. Some of the vehicle factors that may affect insurance costs include the type of vehicle, safety rating, likelihood of theft, safety features installed, among others.

6. Raise your deductibles

A deductible is the amount that the insured party pays for a loss before their policy kicks in and covers the rest. Choosing a high deductible will definitely reduce the premiums you pay and in some cases, it can save you hundreds of dollars every year.

7. Consider pay-per-mile or usage-based insurance

If you don't drive that often, a usage-based insurance policy can result in lower rates since it's is based on how much you drive.