By Ben LuthiWhen Is the Best Time to Buy Car Insurance?
Quick Answer
Some experts recommend shopping for insurance once a year in December, when many insurance carriers are setting rates for the new year.
As a consumer, you're often rewarded for your loyalty. But when it comes to your auto insurance policy, sticking with the same company year after year could be costing you. Insurance companies often reevaluate how they set rates, so it's a good idea to frequently shop around for coverage to ensure you're still getting the best rate. Here's when it makes sense to do it.
When Is the Best Time of Year to Buy Car Insurance?
There isn't necessarily a best time of the year to buy car insurance. Since the price you'll be quoted for insurance depends on various factors—such as the car you drive, your driving record and where you live—the best time to consider shopping for car insurance may be after a significant life event that can impact your rates (more on this below).
Broadly speaking, though, some experts suggest that December can be a good time to compare rates because that's when some insurers set new rates for the upcoming year. That said, you can switch insurance carriers anytime.
Learn more: Can You Change Car Insurance at Any Time?
Should You Look for New Insurance Every Year?
Yes, insurance experts recommend drivers evaluate their auto coverage and shop around for a better rate at least once a year. It's also a great idea to review your policy every year to make sure that your coverage still meets your needs, and to consider whether you're eligible for any new discounts.
Auto insurance policies typically last six or 12 months, after which you'll need to renew your coverage—potentially at a higher rate. In some cases, you may be able to save by switching to a new auto insurance provider. Shopping around typically doesn't take much time and, depending on your situation, could save you hundreds of dollars.
Tip: You should receive a notice several weeks before your renewal date with any changes for the upcoming period, including your new premium. You could use this window as an opportunity to compare rates before your policy renews.
Life Changes That Could Prompt a Car Insurance Change
In addition to reviewing your coverage and rate once a year, there are certain life events that may impact your insurance needs. Here are some life changes that could prompt a change in car insurance:
- Getting married: Married couples typically pay lower rates than single people. Additionally, many insurers offer discounts when you insure multiple vehicles with the same company. Even if you plan on keeping other aspects of your financial lives separate, you could save money by combining auto insurance coverage.
- Buying or renting a home: Insurance companies typically offer discounts when you bundle certain insurance policies, including homeowners and renters insurance. Additionally, if you move to a new city or state, you may be able to find cheaper coverage with a different provider.
- A change in employment: If you recently retired or switched to a job that allows you to work from home, you likely won't be driving as many miles per year as before. With less time on the road, you could be eligible for a lower rate.
- Reaching a certain age: For the most part, auto insurance rates go down as you get older. However, during your 20s, the annual decreases can be significant. The same is true once you reach your 50s.
- Buying a new car: One of the factors that helps determine your rate is your vehicle model. Depending on the model of the car you're buying and the one you're getting rid of, you may be able to get a lower rate.
- Adding a teen driver: Adding a teen driver to your insurance is often cheaper than buying them their own policy, so this may be a good time to review your policy and compare quotes from various insurers.
- Moving to a new location: When you move to a new city or state, it may impact your car insurance rate. Insurers factor your location in when setting premiums, so your insurance could go up or down after your move, depending on the area you move to.
- Changes to your credit: Some states allow for the use of credit-based insurance scores to help determine premiums. That means that, depending on where you live, an increase in your credit score could unlock better offers.
Another good time to shop around for a policy is when a major violation falls off your driving record or you've decided to raise or lower your coverage amounts.
Learn more: How Much Car Insurance Do I Need?
How to Switch Car Insurance
Whether you've experienced a life event or you're doing an annual review of your coverage, here are some steps to switch car insurance and help you ensure you get the best rate possible:
- Review your coverage. Before you start the comparison process, review your current rate and coverage. If your situation and budget have changed, it could make sense to increase or reduce your coverage options, levels and deductibles.
- Use a comparison tool. It's best to obtain a quote from at least three to five insurance providers. But going through the online quote process with each one individually can be time-consuming. With services such as the Experian auto insurance comparison tool, you can get personalized quotes from multiple insurers with a single form, saving you time and making it easier to compare options side by side.
- Look at more than just the rates. As you compare quotes, it's crucial to ensure that you're comparing policies with the exact same coverage. That said, some insurers may offer different types of coverage and discounts that could impact your rate, so consider those factors as well.
- Choose a provider. Based on what you find, you may decide to stick with your current insurance company or switch to a new one. If you decide to cancel your existing policy in favor of a different provider, you may receive a partial refund from your old carrier. That said, be sure to align your new policy date and your cancellation date to avoid any lapse in coverage.
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Improving Your Credit Can Help You Save on Auto Insurance
As you look for ways to save on car insurance, an unlikely suspect for higher rates could be your credit score. In many states, auto insurers use a credit-based insurance score to help calculate your premium.
Check your Experian credit report and FICO® Score☉ to evaluate your credit health. If your score is in fair or poor shape, taking steps to improve your credit can help you save on your auto insurance policy.
Don’t overpay for auto insurance
If you’re looking for ways to cut back on monthly costs, it could be a good idea to see if you can save on your auto insurance.
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About the author
Ben Luthi
Ben Luthi has worked in financial planning, banking and auto finance, and writes about all aspects of money. His work has appeared in Time, Success, USA Today, Credit Karma, NerdWallet, Wirecutter and more.
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