Three Easy Steps to Get Cheap Auto Insurance in a High-Cost Market
Cheap Thrills Lyrics: 1 Auto Insurance
Important Points
- Purchasing auto insurance from Costco can result in savings of up to $600 on average.
- Purchasing a pay-per-mile policy could result in cost savings if your vehicle is primarily parked.
- Although they might not work with every insurance provider, independent insurance agents can shop around for you to find the best deal on auto insurance.
View our selections of the top auto insurance providers.
The cost of auto insurance isn’t going down. That’s not an opinion, either. The cost of auto insurance went up by 1.0% in October and November of 2023, according to the Consumer Price Index (CPI) report from November 2023.
That might not seem like much of an increase when you consider that car Also, since last November, insurance has increased by 19.2%.
Thus, we’re all essentially in the same situation when it comes to locating affordable auto insurance. Even though certain elements that affect insurance rates—such as the rising frequency of natural disasters—are beyond your control, there are still some ways to lower your premium. These are the three that I think are best.
1. Purchase auto insurance from Costco
Almost everything a person needs to live in the modern world is sold by Costco, including auto insurance. Although Costco does not directly underwrite insurance, it does offer substantial member discounts via CONNECT, its insurance partner (supported by American Family Auto).
How much can you save exactly? Costco claims that, on average, its members save roughly $600 during the first year of membership.
change to CONNECT. And depending on your insurer, that may be an underestimation. The Zebra, an insurance website, discovered that Costco’s auto insurance was not only less expensive than that of seven major auto insurers, but also roughly $1,700 less expensive than Farmers, which charged $2,790. Costco’s insurance, meanwhile, came with a $1,068 price tag.
The exclusive discount offered to Costco members is a major factor in the price difference. This can be paired with other savings, such as bundling policies and safe driving, to get your premium down to an extremely low amount.
Therefore, even if you’re not a member of Costco, it might be worthwhile to join for the savings on auto insurance alone.
2. Adopt a pay-per-mile strategy
A pay-per-mile policy could be the most economical option for individuals who don’t drive frequently to obtain auto insurance.
Check out our list of the top auto insurance providers to learn more.
Pay-per-mile policies are available from many companies and operate as follows: One set base rate is paid, and after that, a second rate is determined by the distance you drive. Among other things, the first rate is determined by your driving record, the car, your age, and your location. The second rate is a cost per mile, typically in the range of a few pennies.
In my first year, I made significant financial savings with a pay-per-mile policy that I formerly had. My per-mile rate was $0.047 and my base rate was roughly $45 per mile.
As I don’t drive very often, I was saving $480 a year, or roughly $40 a month, on auto insurance. But after spending much more money than I had anticipated on a round-trip car ride from Portland, Oregon to Breckenridge, Colorado, the policy did come back to haunt me. Even still, the savings outweighed any benefits I could have received from having standard auto insurance.
3. Assist a self-employed insurance representative
Finally, think about hiring a professional who will do the legwork for you if you are unable to locate affordable auto insurance on your own.
Drivers and auto insurance companies communicate through independent insurance agents. They are “independent” because they sell policies from multiple auto insurance companies rather than working for a single provider.
Probably a commission is earned when they sign you up for a company’s auto insurance, but dealing with an independent agent comes at no cost to you.
An independent agent’s benefit is that they can use your information to locate you a policy. They will frequently compare several auto insurance quotes for you in order to assist you in locating the lowest-cost provider.
The drawback of agents is that you’re only able to get the best rates from a select group of insurers because they don’t represent all auto insurance companies.
However, since the majority deal with large insurance providers, you can at least check which of the most reputable providers would charge you the lowest rate for the coverage you want.
Overall, you can find less expensive auto insurance elsewhere. Whether you discover
it through an agent or on your own, what matters is that you get a low price without sacrificing coverage. Take a look at your options, compare quotes, and don’t settle for the first discount you see — you might be surprised at how much you could save just by shopping around.
Notice: Until 2025, the highest cash back card we’ve seen offers 0% intro APR.
Not only is this credit card excellent, but our experts personally use it because it is so remarkable. This card offers a 5% cash back rate with no annual fee, as well as 0% intro APR for 15 months!
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