Car insurance companies are created to make money by selling a service. If they can get away with selling expensive policies, they will gladly do so. But thanks to fierce competition, they have to make do with average car insurance rates. They make more money by selling a lot of car policies to even out the risk of claims by car accidents, car breakdowns, theft and vandalism acts. Actually, most people never made an expensive claim on their cars but they still buy car plans for peace of mind to protect against unexpected costs which can run very high.

Low car insurance rates are available at both big established insurers as well as the newer companies. The bigger companies have lower running risks and can afford to give out low car insurance rates to hog up the market share while newer companies must keep their prices lower than the average car insurance plans in order to compete against the former.

When you are trying to compare several quotes you have gotten against the national average car insurance rates, do note that there are a few aspects which can dilute the accuracy of these figures.

Firstly, these rates are computed over a variety of personal and unique information. For example, if you are a young driver below 18 years of age, the cheapest auto insurance plan you can find will still be substantially higher compared to the national average. If you have made several major claims on your previous auto insurance policies, you can expect being treated as a high risk driver and will be charged higher rates. If you car is older and in use for more than five years, the fully comprehensive auto insurance plans will be very expensive and frankly speaking, not worth buying. If you do not wish to upgrade to a new car and enjoy lower insurance cover, you can still choose to pay for cheaper third party car insurance coverage.

The average car insurance rates are also lower if you live in a rural district with less traffic. This is because with lesser traffic, the correlated accident rates are also lower. Similarly, if you live in a high crime area where a car is stolen or vandalized every minute, you can expect to pay a lot more than the average car insurance premiums charged in other cities.

It can be confusing to compare average car insurance quotes, even when the rates are the same. For example, different additional benefits such as free car rental when your vehicle is under repairs or 24 hour roadside repair assistance may be bundled together but consumers have no idea on the true cost of such coverage. You are usually not able to remove these policy riders for discounts on the monthly car insurance rates.

If you think bad credit only affects your personal loans and interest payments, you are wrong. You will be charged higher than average car insurance rates because you are considered high risk to the insurers. Past statistics over the past ten years have shown that drivers with poor credit ratings made more claims, which increases the cost of business for the insurers. If you work on improving your credit rating, you will be able to get cheaper than average car insurance.

Instead of paying monthly car insurance premiums, you can get around 5% off the total cost if you pay in a lump sum for the entire year. The insurers save on the billing and service charges involved, and pass those savings back to the consumer this way. You can also take advantages of the offers and discounts on other items that come with your plan. For example, you can get cheaper safety driving lessons, defensive riding courses, car tour packages etc where the discount can be up to 30% over their usual prices.

Do you know that car insurance rates are not maintained at a constant level throughout the year? During the mid summer and pre Christmas seasons, many car dealers will hold clearance sales on their inventory to prepare for incoming stocks for the next season. Car insurance companies often hold similar discounts over their average car insurance rates to drive up sales volume during these periods. You do not have to be buying a new car just to enjoy these special prices. Just remember that it is time to show for the cheapest auto insurance whenever you see advertisements on car sales.

Do you know that on the average, at least 15% of the auto plan premium you pay goes into the pocket of the car insurance agent that sells you the policy and do nothing more than to persuade you to part with your money? Many insurers now offer online buying of car insurance, and since they do not need to pay the car insurance agent any commission you can get up to 15% of discounts on the average car insurance policies available.