Is buying dirt-cheap auto insurance safe? (2025)

With a lot of purchases, you hear sage advice like “buyer beware” and “if it’s too good to be true it probably is,” but when it comes to auto insurance, that need not be the case.

So how do you know whether those dirt cheap auto insurance rates you’ve found are worth it in the long run?

Those rates are safe if your prospective insurance company is basing them on the internal guidelines they’ve set out. Use our FREE quote tool to compare auto insurance companies today.

Things to Consider About Dirt-Cheap Auto Insurance Rates

If you’re seeing really low insurance rates, and are not expecting to, here are some things to consider:

About the Driver

Here are some things to remember when it comes to the driver:

• Driver demographics: One of the first things the auto insurance industry looks at is the age and gender of the driver. Young drivers, owing mostly to lack of experience are responsible for more accidents. Men have more accidents than women. The insurance companies want to work with you, offer rate discounts at 21 or 25 years old.
• Driving record: If your driving record is clean and accident-free, and has been that way for a while, chances are you’ll qualify for a discount with auto insurance companies. Many of them will be looking for accidents within the last 5 to 10 years.
• Driver location: You might have heard anecdotes and jokes about the driving habits in California or New York, or about the frequency of auto theft in Florida or Texas. Insurance companies gather data on accidents and auto theft, revealing that certain states, metropolitan areas, and even specific neighborhoods can lead to either penalties or rewards for residents. For instance, if the person at fault in an accident has no insurance in California, it can significantly affect the claims process and insurance rates.
• Credit score: Car insurers have, as a general practice, started considering credit records when determining rates. They do this because it can be another indicator of how responsible the driver is likely to be. If you have a bunch of debt and you’re not paying it on time, they may wonder how good of a driver you are. (Read More: How Credit Scores Affect Auto Insurance Rates)

As you can see, insurance companies consider various factors about the driver when setting rates.

About Your Car

How old your car is, as well as the type of car it is, play important roles in determining rates.

A car equipped with safety features such as anti-lock brakes (ABS), airbags, automatic seatbelts, and a theft-deterrent system is likely to receive a better insurance rate than a car without these standard safety features or one considered higher risk (like the Explorer rollovers). The insurance company is usually the cheapest for a 30-year-old, offering the best rates and the cheapest insurance for full coverage.

About the Insurance Company

Here are some things to know about the auto insurance company:

Profession Discounts

– A lot of insurers offer special auto insurance discounts for different types of employment.

Professions such as teachers, public safety officials like police officers and firefighters, government employees, and military personnel often qualify for special insurance discounts. Additionally, young drivers, particularly 17-year-olds in Washington state, typically pay the most for car insurance.

Customer Loyalty Discounts

Having multiple policies (e.g.: life, auto, homeowners; or more than one auto policy) with the same insurance company is often a great way to save on rates.

Similarly, staying with an insurer for a long time demonstrates a loyalty that these companies often reward.

You may even experience the increasingly popular accident forgiveness with these companies, since they consider your comprehensive profile when determining rates.

Special Discounts

Many auto insurance companies provide specialized discounts for various reasons. For example, some companies offer reduced rates to full-time college students who maintain a specific GPA. This can be especially beneficial when considering insurance for a 17-year-old in Ireland or finding the best insurance for an old car.

Insurers also may have affiliate programs that offer special discounts to drivers who are members of a certain club or organization, like AAA or AARP.

About Your Coverage

Here are some things to know about auto insurance coverage:

• Minimums or more: If you are carrying more than the minimum liability auto insurance, your rates will logically be higher. This is also tied to state requirements – some states require more minimum coverage than others. The effects are noticeable in rate comparisons.
• Additional coverage: If you have opted into roadside assistance coverage, free towing, tire protection, windshield protection and special additional coverage for uninsured motorists, then your rates will reflect that. Accordingly, if you don’t have these sorts of additional coverages, your rates will be lower.
• Deductibles: If you have a high auto deductible (the amount you pay out of pocket in the event of damages), then your rates will be lower. It’s something to consider when comparing rates. Lower auto insurance deductibles mean higher rates.
• Risk factors: How far you drive in a year, and whether or not the car is being used for pizza delivery or taxi service will also play a role in rates. If you don’t drive much, or your commuting distances are short and you alternate between driving and public transit, you could be saving quite a bit on your car insurance. (Read More: Pleasure-Use vs. Commuter Auto Insurance)

The types of auto insurance you buy impacts your rates. So, it’s important to only get what you need to keep rates as low as possible.

Other Considerations When Researching Insurance Companies

If, after reviewing these considerations you are still concerned about taking advantage of dirt cheap car insurance rates, here are some things you to check:

• Fine print: Is the rate offer promotional, or does it require special qualifications? Companies are required to disclose policy conditions prior to purchase, so read carefully.
• BBB: If you’re concerned about the company itself, check the Better Business Bureau‘s online portal and scour the web for information about the insurer you’re considering.
• Business reviews: Sometimes you’ll see dissatisfied customers expressing themselves on websites like Yelp. It can be a great source of reassurance if you’re questioning those cheap insurance rates.

Extremely low insurance rates are quite common and can be exceptionally cheap in some cases. Insurance companies compete by customizing rate quotes to fit your unique profile. While searching for affordable options, it’s important to consider that the most expensive form of car insurance offers extensive coverage. Additionally, Erie has a strong reputation for being good at paying claims.

More About Whether Buying Dirt-Cheap Insurance Is Safe

Auto insurance companies stay competitive by offering competitively low rates. Because of that, the consumer wins. To determine what low rates they can offer, insurers look at:

• Your personal profile
• Your credit profile
• Your driving record
• Your car
• Your coverage
• Special discounts that may apply

After understanding your relative appeal to different insurance companies and conducting some research, you can confidently select dirt cheap auto insurance online with low rates.

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