Is Cheap Car Insurance Possible?

Auto insurance is one of those irritating expenses of car ownership that has no immediately obvious benefit. We pay and pay, and may never get anything in return. Teenage first car buyers are always a bit startled by the high cost of insurance.

Car insurance is one of the most expensive costs of owning and driving a car, especially for teenagers and other new drivers who can least afford it.

In this article we’ll show you how and where to find the car insurance company for your first car that has the best rates and provides the best service.

We frequently hear the question, “Which auto insurance company is best?” or “Where can I find the cheapest car insurance?” or “What is the cheapest insurance for a 16 year old?” It would be nice if there were a quick simple answer to those questions.

It’s a fact that you will find an insurance company that has the lowest rates for you, your car, and your personal situation than any other company.  But that same company may not have the lowest rates for someone else.  Because rates depend on so many different factors, and insurance companies are not the same in how they base rates on those factors, rates vary widely between companies.

Furthermore, an insurance company that offers low rates in one state may have totally different rates in another state, or may not even be licensed to operate in the other state. That’s why it’s not as easy as saying that XYZ company has the cheapest rates.

Teenagers bear the burden of the highest car insurance rates

It’s  because teenagers cause the most accidents. Rates for a 16 year old male added to his parent’s policy can easily double the cost of the policy. Depending on the state he lives in, where he drives, and the kind of car he drives, rates could be in the range of $1000 to $3000 a year.

Choosing an insurance provider should be based not only on good rates but also on how well the company services its customers. A company with low rates but is difficult to deal with when you file a claim may not be a good choice.Here is a strategy we recommend for finding a good auto insurance company for your first car.

Learn from the experience of others

Visit for the results of a consumer study of major insurance companies, rated in terms of overall customer experience, policy offerings, prices, and customer service. Some of the companies only operate in a single state or only in a few states.  Not all companies are listed, especially many of those who operate in a single state.

Avoid those companies with the lowest scores. Consumer Reports magazine regularly surveys auto insurance customers from all over the U.S. Its most recent survey covered 27 insurance providers and ranks them in terms of overall customer satisfaction and fewest problems with customer claims.  It publishes results on its web site at There is a subsciption fee but it’s well worth the cost.

Get free quotes from multiple companies

Visit or call multiple insurance providers in your area and ask them for rate quotes. A much easier way is to get your quotes online. You can always go directly to insurance company web sites such Esurance.comand get instant free rate quotes. Use multiple companies and compare rates.

Check your Insurance Commissioner’s web site

All states have an office of the Insurance Commissioner. The purpose of the office is to approve, license, and regulate insurance providers in their states. Many states maintain a database of insurance companies and customer complaints against those companies, which is available for public viewing on the state’s web site.  You should check the database for problems with any insurance company you may be considering. Check this web site for links to insurance commissioners in each state.

Get your CLUE report and credit score

When you make claims against your car insurance, a record of those claims can appear in a little-known database called CLUE (Comprehensive Loss Underwriting Exchange). Insurers use the database to set your premium cost. Sometimes, even questions about your coverage to your insurance agent that do not result in a claim end up in the database. It’s common for errors to appear in the database, which directly affects what you pay for your insurance.

When you shop for new insurance, the company will order a CLUE report. If your information is inaccurate, you can be left without insurance while you work to correct the errors. You are entitled by law to get a free CLUE report once each 12 months from The report shows you what insurance companies see about you. If you find errors or mistakes, you’ll be given instructions for filing a dispute.

Check your credit score

Most insurance companies also use your credit history report as a basis for setting your premium cost. They create an insurance score that is directly related to your conventional FICO credit score. If you have a low score that is related to late or missed loan payments or credit card payments, you’ll pay more for car insurance. Credit reports often have outdated data and mistakes that will increase your insurance cost.


Auto insurance for your first car can be expensive, but you can minimize the cost by shopping around for the best rates from the best companies.


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