Is there such thing as free auto insurance?

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Things to Remember...
  • There are a number of car owners who have found auto insurance coverage at no direct cost to them, but these deals are not something the average consumer can request from the local insurance agent
  • Free car insurance through a car manufacturer is not without its stipulations
  • Since car manufacturers will sometimes offer financing, providing this car insurance is a way for them to guarantee protection on their investment
  • Though a person is not likely to get insurance at no cost, being savvy while making comparisons can save a driver hundreds or even thousands of dollars over time

Is there such a thing as free auto insurance? Though many might assume that the obvious answer is “No,” surprisingly, that isn’t the case.

There are a number of car owners who have found a way to drive around on the streets with auto insurance coverage at no direct cost to themselves, but these deals are not something the average consumer can request from the local insurance agent.

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A Limited Time Offer

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Free car insurance is almost never an offer in and of itself. Auto insurance companies could not survive if they were willing to provide insurance at no charge to customers.

Most often, the free car insurance is advertised and provided by car manufacturers as an incentive to attract buyers. Such offers are similar to those of no interest or cash back upon purchase.

Finding these car manufacturer deals depends largely on where a customer lives and what promotions are currently being offered by the dealers in that area.

Such offers are rarely if ever, part of a nationally advertised campaign, due in part to varying state insurance regulations.

While a car buyer in one state might receive free auto insurance for a year after making a purchase, a person in another might travel the entire state and not find a similar offer.

The Fine Print

Free car insurance through a car manufacturer is not without its stipulations. Typically, a customer will not be able to choose the type of auto insurance or the company that will provide the coverage.

The level of that coverage may vary from manufacturer to manufacturer or from offer to offer. A buyer might find the dealer offers insurance that meets only the state minimum car insurance requirements.

Others will instead provide not only comprehensive coverage but also rental cars in the case of accidents.

Because the level of coverage can vary so drastically, the new car owner should be sure to read the agreement and its fine print.

This will prepare owners for what could be covered in the case of an accident, so that owners and their families do not count on reimbursement if they only have minimal coverage that will not provide it.

Free insurance that only conforms to the state minimum requirements can also affect bank financing.

Many financial agencies will require comprehensive auto insurance coverage as long as there is still a loan on the vehicle. Anything less could put a person in violation of the loan agreement and cost the car owner far more than comprehensive insurance rates.

Benefits to the Manufacturer

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This seemingly generous gift from the car manufacturer is usually more than that. Since car manufacturers will sometimes offer financing providing this car insurance is a way for them to guarantee protection on their investment.

Rather than relying upon the car buyer to get insurance to cover the cost of the car, the manufacturer provides the coverage to best suit its interests.

Even those companies that are not financing the car themselves find perks to offering free auto insurance.

Making an offer that could save owners upward of $1,000 a year is intended as more than a thank-you gift to customers. Such a promotion has the goal of bringing those customers into the business in the first place.

Often, it succeeds and pays for itself in selling additional cars or selling pricier models.

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When “Free” Usually Applies in Insurance

Unless the auto insurance is through a promotion, it is almost never free, but free quotes are becoming common in the industry. Some third-party sites will even provide rate comparison without extra effort.

When a would-be customer knows what he or she is getting into before purchasing insurance on a vehicle, the savings could total hundreds, perhaps even a thousand dollars each year, depending on the customer’s driving history, car use, place of residence, and vehicle to be insured.

Why do insurance companies offer free quotes? Much like the car manufacturers offering free insurance, free quotes help these businesses bring in new customers.

Most companies know that giving or doing something for free entices the public to deal with the business.

It bolsters the business’s image with consumers, even those not currently shopping for insurance. Sometimes the impression is so strong, that customers remember the company when it is time for renewal.

Discounts Add Up

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Because a good driver or loyal customer is valuable to an insurance company, many of these businesses offer a wide array of discounts and programs to customers with a clean driving history or who remain with the company for a number of years.

Safe drivers may find their insurance price drops after two, three or four years with the same company and without an accident.

Loyal customers may receive an auto insurance discount or get better coverage for staying with the same insurer for several years.

Though it is not a discount in the traditional sense, some companies reward their long-time clients with accident forgiveness.

Without forgiveness, insurance companies can add a surcharge from 10 percent to well over 30 percent for that first accident, and that surcharge can stick with an account for several years.

Over that period of time, if that incident were forgiven and a surcharge never added, an insurance customer could save the same as getting a full year’s insurance for free.

Insurance companies also offer other cost reductions that can save money over time.

A good student may find their insurance rates decreasing below fellow classmates.

Vehicles with better safety ratings will equal lower rates for their owners, and for the same safety reasons, owners who have taken additional driving courses will pay less for their insurance.

Insurers who deal in more than just autos often offer package deals.

Similar to accident forgiveness, over time, these discounts can mean a savings of a year’s or several years’ worth of insurance payments.

Getting the Most for Your Time and Money

Though a person is not likely to get insurance at no cost, being savvy while making comparisons can save a driver hundreds or even thousands of dollars over time.

A little research through a third-party site or the companies’ websites themselves can help would-be customers make the most cost-effective decision based on rates, discounts, package deals and special programs.

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