5 Things to Know Before Buying Auto Insurance

Before you buy auto insurance, research, (1) your state's laws, (2) lienholder's requirements, (3) factors that affect your rates, and (4) discounts you are eligible for.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 19, 2021

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Things to Remember...

  • Car insurance is required by almost every state in the country
  • If you are leasing a car, you will have regulations concerning insurance
  • Know the factors that affect your insurance and how you can save on rates

Whether you’ve owned your vehicle for a while, or are thinking about buying a new one, one of the biggest considerations you have is how to go about buying auto insurance.

Maybe you’re wondering whether you even need it.

Before accepting the first offer that comes along, there are some things to take into account to ensure you get the best deal, and the best auto coverage.

Compare auto insurance rates online by entering your zip code into our FREE tool on this page!

1. You Need It

If you’re still making payments on your car, you must have auto insurance. Your lienholder will require it to ensure they are able to recoup any losses if your vehicle is damaged, totaled, or stolen.

Most states also require a minimum amount of coverage.

Even if your car is paid off, and you happen to live in a state that doesn’t require any coverage, you need insurance.

The small amount of money you would save by not paying a monthly premium is insignificant compared to what you would have to pay if you were at fault or injured in an accident.

Insurance provides protection and peace of mind.

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2. Your Lienholder May Have Certain Requirements

If you’re buying a new car, find out if your lienholder has any requirements about the kind of auto insurance you need.

Some banks will require a low deductible because they want to make sure you’ll be able to pay it if you need to.

A lower deductible will give you a higher premium.

Check with your lienholder before calling any insurance companies.

3. There are Several Factors That Determine Your Rate

Other than the deductible you choose, auto insurance companies determine your rates based on several factors such as:

  • Your age
  • Whether you’ve been in any accidents before
  • Your credit score

Look at these factors and know where you stand before you start asking for quotes.

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4. Requesting a Quote Can Affect Your Credit Score

Do as much research online as you can before you start requesting quotes from insurance companies.

The first thing any insurance company will do before calculating a quote is to check your credit.

However, a high number of inquiries on your credit report can have a negative effect on your credit score.

Do your homework, narrow your choices down to three or four companies, then request quotes to keep the number of credit inquiries low.

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5. You Can Create Your Own Discounts

Most insurance companies will offer their policyholders discounted rates for having more than one policy with them.

Many companies will also offer safety discounts on auto insurance if your vehicle has special devices like:

  • Anti-lock brakes
  • Built-in car seats for children
  • Airbags
  • Anti-theft device

Keeping all your policies with one company, and making sure your vehicle has as many of these options as possible can help you save money.

Why not take advantage of cheap auto insurance rates?

Enter your zip code in on this page to get started comparing free auto insurance rates!

Free Auto Insurance Comparison

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

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