Affordable car insurance is an elusive concept but if you follow these steps, you have a great chance of slashing your next auto insurance bill. The key to finding the most affordable rates is to shop around and take advantage of available discounts.

How to shop around for affordable car insurance

Being a licensed property and casualty agent, I can give you a few pointers about the best way to find affordable car insurance. The key is to compare rates from as many companies as possible, including independent agents, captive agents and online companies. There may be some overlap, since some online companies also sell via the independent agent channel, such as Progressive Insurance.

If you have access to an independent agent, that would be a good place to start your search for affordable car insurance. Independent agents write with many different companies and can do the legwork for you in comparing rates. They may write with smaller companies that don’t have large advertising budgets and you may not have heard of. This is not necessarily a bad thing, as long as the companies have a solid financial rating.

The next place to quote your coverage is with captive agents. Companies such as State Farm, Allstate and Farmers use captive agents. These agents can only provide rates for the company they work for, and cannot provide you with quotes from other companies. Once you have rates from both independent and captive agents, you are ready to move on to the next step, online shopping.

Online car insurance companies such as GEICO operate exclusively online, and you can quote your own coverages via the internet. Progressive is the other major player in the online market, so be sure to quote them if you did not receive a Progressive quote from your independent agent.

Apples-to-apples not apples-to-oranges

The key to making a fair comparison of car insurance quotes is to make absolutely sure the coverages you are comparing are identical or as close as you can get. Some companies may have slightly different liability limits or deductibles, but they need to be as close as possible to compare.

Here’s a tip for saving some time and gas when shopping for affordable car insurance. If you have a current policy and you want to compare the rates of other companies to your current carrier, photocopy your declarations page that shows all your current coverages (mask your current premiums with a black marker). Type a cover letter to each agent you wish to contact explaining you want a price quote using your current coverage levels. Mail the cover letter and the copy of your policy dec sheet to each agent and give them a week or so to reply. Specify in your cover letter that you wish to have a printed comparison mailed to you and you will contact them after receiving their quote if you feel it is competitive.

The purpose of this is to give each agent identical information to compare, and at the same time, preventing them from contacting you to upsell other products or coverages that are not on your current policy. This should ensure the most accurate apples-to-apples price comparison. Some agents may elect to not quote your coverage, so don’t expect a 100% reply rate to your letter.

If you want to get the most accurate quote possible, you will need to include Social Security numbers, driver’s license numbers and dates of birth for all drivers. If you prefer to not provide that infomation in your letter, instruct the agent to call you for the information once they receive your letter. Agents need your Social Security number to run your credit report and your driver’s license number to obtain your driving record information from the state you are licensed in. Insurance companies use credit scoring to determine car insurance rates, so the better your credit, the lower your rates will be.

Narrow down your choices

Once you have a solid number of comparison quotes from independent and captive agents, as well as online companies, you can then site down and compare the bottom line for each company. Narrow your choice down to two or three that stand out, and then contact each company or agent to see what other discounts you may qualify for. If you own a home and want to compare rates for packaging your home and auto together with the same company, you can send your homeowners policy declarations along with your auto policy for comparison.

Does your agent relate?

It’s important that you connect and relate with your insurance agent, so if an agent provides your quote of choice, call them and set up an appointment to meet. This is as much for you to interview the agent as it is for the agent to interview you. If you don’t get satisfactory answers to your questions, it’s easier to not place your business with them now rather than having to move it down the road.

Finalize your decision

By this point you should have a good feel for which companies have the most affordable car insurance rates for your individual situation. Now it’s just a matter of finalizing the paperwork and paying the initial premium payment. Make sure you don’t let your current policy lapse while shopping for more affordable rates. Even a one-day lapse can cost you significantly on your new policy.

Hopefully these tips allow you to make an educated decision in buying car insurance, and enable you to find AFFORDABLE car insurance!