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7 Occasions To Look For Cheaper Car Insurance

By Dan Green

The company that sold the cheapest car insurance six months ago may not be the one that sells the cheapest car insurance today. There are a lot of reasons to shop for a new policy. Here are seven of them.

What Is Car Insurance?

Car insurance is an insurance policy that makes cash payments after a car accident, damage to a car, or car theft.

Car insurance is also known as auto insurance.

Most states require drivers to carry auto insurance. This is because car accidents tend to involve two or more automobiles. States want drivers who cause an accident to have insurance money available to pay for other drivers’ repair and hospital bills, as needed.

Auto insurance makes sure of that.

When accidents happen, auto insurance companies pay for repairs to cars; for bills to doctors; and, for damage to public and private property, including street lamps, guard rails, sign posts, and fences in yards.

Auto insurance also covers accidental damage to a car, including damage from weather and flooding; and from falling trees, as examples.

When you have a proper car insurance policy in place, you can get into an accident without wiping out your savings or getting yourself into bankruptcy .

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How Much Will You Pay For Car Insurance?

As a driver in the United States, you’re required to have auto insurance. Auto insurance protects you from the costs of an accident, damage, or theft; and, hands out cash to help pay for repairs.

More than a dozen different types of auto insurance protection exist.

The most common coverage types are:

  1. Bodily Injury Liability : Pays the medical bills of a person you hit
  2. Medical Payments Coverage: Pays for an ambulance and emergency room care
  3. Property Damage Liability : Pays for damage you caused with your car
  4. Collision Coverage : Pays for damage to your car from an accident
  5. Comprehensive Coverage : Pays for damage to your car from a random event
  6. Uninsured and Underinsured Motorist Coverage : Pays for damages not covered by another driver’s insurance

Optional add-ons exist, too.

For example, you can add roadside assistance insurance coverage to your coverage; rental car reimbursement insurance; and, tow truck reimbursement insurance, among other add-ons. Each additional coverage raises your overall bill.

Other factor affect your rate, too.

Insurance companies also look at where you live, what you drive, and how you drive; in addition to your gender and date of birth.

And every insurance company prices its drivers differently.

Some insurers give lower insurance rates to drivers in big cities; while some offer lower rates to drivers of SUVs. Some offer their lowest rates for cars that get parked in a garage.

There are dozens of traits that affect your car insurance rate. It’s why you should compare rates and shop for new insurance each time you have to renew.

Auto insurance policies renew every six months.

How Much Car Insurance Is Required In My State?

Great Reasons To Shop For Cheaper Car Insurance

Don’t ignore your auto insurance. You might miss the chance to save money.

Car insurance policies are based on things like your age, where you live, and for how many years you’ve been driving. The car you drive makes a difference, and it matters whether you lease or buy a car.

Other factors come into play, too, including your driving history and whether you’re single or married.

Each of these factors are fluid. They change all the time. Your age is increasing, along with your experience as a driver. You change jobs and change cars. You change where you live.

Your car insurance rates change because you change.

The way that auto insurers evaluated you six months ago is different from how they evaluate you today. Based on how you look today, auto insurers are willing to drop their rates sharply in order to make you a customer.

So, shop around when your auto insurance renews every six months. And, if you’ve experienced any of the seven life events below, the savings you get from shopping for new car insurance may be substantial.

1. You stopped parking your car on the street

The typical driver uses their car for less than 4 hours per day. Where that car is parked for the other twenty hours each day makes a difference in your car insurance rate.

For drivers that park in a garage, the risk of damage is low. Garages protect cars from the bumps and scrapes of street parking; from being involved as collateral damage in somebody else’s car crash; and, from outright theft.

If you’ve recently started parking your car in a garage — either at home or at work — it’s time to shop for new auto insurance. You’ll get a discount on your rates.

2. You recently finished college, trade school, or graduate school

Some auto insurance companies offer lower rates to graduates of college, trade school , and graduate school. Drivers with doctorate degrees pay even less.

The reason why drivers with additional formal education degrees pay less for car insurance is because the insurance companies have found a connection between the number of degrees and certifications a driver has, and how safely that person drives.

If you’ve recently graduated from college, trade school, or graduate school, get a car insurance quote today. You can lower what you’re paying.

How to compare car insurance rates.

3. You changed jobs

Your job affects your car insurance rates. The work you do, how far you commute, and where you park your car all make a difference. Plus, auto insurance companies like to favor certain professions.

Certain jobs are privileged.

Teachers, scientists, and paramedics will pay less for their auto insurance than will a doctor or a judge; and, a business owner who works from home will pay less for auto insurance than a business owner who works from an office.

If you’re changing jobs, shop for insurance. You may find something cheaper.

4. You’ve paid your car off

When you’ve paid off your car, your auto insurance rates don’t automatically reduce. However, because you no longer owe money on your car, carrying two types of auto insurance coverage becomes optional.

Comprehensive Coverage and collision Coverage are designed to pay cash when your car’s been in an accident. When you own a car with nothing owed on it, states will allow you to waive this coverage. You can also find it more cheaply if you elect to keep your car protected.

It makes sense to shop for auto insurance after paying off your car. Reducing your coverage can save you a lot.

5. You got married or formed a domestic partnership

If you recently married, go look for cheaper auto insurance.

Married drivers are involved in far fewer accidents as compared to non-married drivers; so, auto insurance companies charge drastically lower rates to drivers who are married or in a domestic partnership.

Your car insurance rates drop significantly for recently-married couples. Shop for a new auto insurance quote now.

6. You paid off credit cards and reduced your loans

If you’ve recently paid off your credit cards ; reduced your balances; or, paid down your student loans, get a fresh auto insurance quote.

This is because auto insurance companies use your credit score as a factor in your car insurance rate. Drivers with higher credit scores get access to cheaper car insurance.

Paying down credit card debt and paying off loans can raise your credit score by 100 points or more, which makes a major impact on what you pay for auto insurance.

Use your new credit score to your advantage. Use it to get cheaper insurance.

7. You bought a new house

Where you live makes a difference in your auto insurance rate.

Drivers who live in urban areas pay more for car insurance than drivers who live in the suburbs; and, drivers in the suburbs pay more than drivers who live in less-dense areas.

Any time you move — even if it’s just down the street — get an update on your car insurance quote. You may be eligible to get a reduction.

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Get A Car Insurance Quote Now

Twice a year, shop for new car insurance. Rates are changing all the time and your life is changing, too. The company that offered the cheapest car insurance six months ago won’t necessarily be the one that offers it today.

Get an instant car insurance quote. See what you can save.

Written by Dan Green

Dan Green is a mortgage lending expert and the founder of Growella. Prior to Growella, Dan was a six-time, top-producing loan officer; and, ranked repeatedly among the top 1% of loan officers nationwide. Dan's home buying expertise has been in print and on TV with The Wall Street Journal, NPR, Forbes, CNBC, and others.

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