Published: September 9, 2022Updated: September 20, 2022

The Best Time to Buy Car Insurance

When to shop the market for a better deal

You buy a washing machine on Labor Day weekend, a mattress on the Fourth of July, and all of your toilet paper for the entire year on Prime Day. But what about auto insurance? Is there an ideal time to shop for that?

It turns out that there’s no “best” time of the year to get insurance coverage. Rather, you should compare quotes before your current policy expires or if you’ve experienced a major life event. In other words, the ideal purchase time is going to vary.

Times of Year

Again, there is no bad or good time of year to get car insurance, unlike buying a car at the end of the month to take advantage of a car salesperson’s monthly sales goal. While vehicles themselves are often discounted around holidays like Christmas, New Year’s, and the Fourth of July, car insurance companies typically don’t offer seasonal deals. Rather, the best time to switch or buy new car insurance depends on your life circumstances.

Big Life Changes

Did you recently celebrate a big birthday, move, or get married? Now could be the perfect time to switch and save on auto insurance costs. Big life changes, like those outlined here, can significantly impact your car insurance rates. These are the times you should explore changing policies to get the most cost-efficient coverage.

Age

If you have a teen driver in your household, you probably experienced a huge increase in insurance premium when they started driving, due to their lack of driving experience. However, car insurance premiums tend to decrease with age, so as you or someone on your policy ages beyond 25, expect lower rates. It could be worthwhile to shop around and see which provider can offer you the most affordable rates for your age range. For example, see Progressive’s average annual rates by age group below.

Age Change in average annual rate from Progressive (9/20-8/21) Percent change from previous age group
17 and under $206 N/A
18 $230 12%
19-20 $203 -12%
21-22 $176 -13%
23-24 $153 -13%
25-29 $136 -11%
30-34 $127 -6%
35-39 $124 -2%
40-44 $122 -2%
45-49 $120 -1%
50-54 $111 -8%
55-64 $100 -10%
65-74 $96 -3%
75+ $101 4%1

Driving Record

Maybe you got into an accident and are now considered a high-risk driver. If so, you might want to switch to a nonstandard insurer like Acceptance or National General. On the other hand, if a ticket or at-fault accident is no longer on your driving record, you may be able to get lower rates. It all depends on your driver classification.

Credit Score

In most states, insurers can take credit score into account when determining a driver’s car insurance costs. As a result, if your credit score increases significantly, it’s worth seeing if insurance providers can offer you a lower rate than what you’re paying currently.

Note that some states prohibit car insurance companies from taking credit scores into account. In Michigan, Massachusetts, California, and Hawaii, for example, they can’t use credit scores to determine prices at all, so a change in credit score won’t affect your rates in these states. Otherwise, if you have poor credit, get car insurance quotes without credit checks.

Degree

Believe it or not, around 60 percent of car insurance companies vary their rates based on a person’s level of education. The more education you have, the lower the insurance premiums you’ll pay, as studies show more educated people are less likely to perform risky driving behaviors and get into accidents. In the same vein, more education generally translates to a higher income, which can also mean lower premiums.2

If you completed college, you can save anywhere from $300 to $600 per year on car insurance compared to if you graduated from high school only. Finished high school only? You could save $300 compared to someone who dropped out.

FYI

Insurance savings have diminishing returns as you get graduate degrees. For example, having a doctorate versus a master’s degree will save you only about $50 per year, on average.3

Marriage

First of all, congratulations on your nuptials! Aside from your dreams coming true, you can also save on car insurance through a multi-vehicle discount, provided both you and your partner each own a vehicle. Once you walk down the aisle, reach out to your insurance agent about adjusting your policies to account for wedded bliss.

Buying a House

In general, homeowners pay less than renters for car insurance. In addition, you could unlock savings by bundling your home and auto insurance under the same provider. Shop the market to see which insurance vendor is offering the best package for your circumstances.

Moving

If you move to a different area, it’s more than your home that’s changing. Insurance might cost more or less than at your previous residence due to changes in:

  • Weather (if you move from a place like Florida, which has frequent hurricanes, to a more temperate climate like Pennsylvania, you could save)
  • Rates of crimes such as auto theft and car vandalism
  • Road conditions
  • Population density
  • Number of claims submitted in the area

 

In addition, each state has different minimum coverage requirements, leading to different average rates.

DID YOU KNOW?

The difference between the state with the lowest average annual auto insurance cost (Maine at $696.37) and the state with the highest (Louisiana at $1,557.22) is 224 percent higher.4

Child Going to College

Many car insurance companies offer a “student away from home” discount if your child leaves their car at home and goes to school at least 100 miles away. Consider providers like American Family, Allstate, Clearcover, and Erie, to name a few offering this opportunity.

New Car

Leasing a car? Many leasing companies require you to get gap insurance in addition to comprehensive and collision coverage. Even if you buy a car outright, your insurance costs could change based on vehicle safety ratings, repair costs, and other factors. Any time you get a new car, take the time to explore how your insurance rates may be affected and where you can save.

Policy Up for Renewal

It’s worth shopping for car insurance every time your policy is up for renewal to see if you can get lower insurance costs. But make sure you do your research before your policy expires; a gap in insurance could lead to higher rates, so cancel your current policy only after your new policy’s effective date.

Citations

  1. Car insurance for teens. Progressive. (2022).
    https://www.progressive.com/answers/teen-driver-insurance/

  2. How Your Diploma Affects Your Auto Insurance. Freeway Insurance. (2022).
    https://www.freewayinsurance.com/knowledge-center/auto-insurance/saving-money-on-auto-insurance/diploma-affects-auto-insurance/

  3. How your education could impact your car insurance. . Tomkins Insurance Agencies. (2022).
    https://www.tompkinsins.com/blog/does-your-level-of-education-impact-your-auto-insurance-rates#:~:text=Studies%20have%20found%20that%20drivers,degree%2C%20master%27s%20degree%20or%20Ph

  4. 2018/2019 Auto Insurance Database Report. NAIC. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf