Purchasing a vehicle is already a big enough financial commitment without considering the insurance costs first. Because Insurance premiums can vary significantly based on your chosen vehicle, driving history, and even where you live, you’ll want to investigate before going to the dealership.

Understanding how to estimate car insurance can help you effectively budget and avoid unexpected expenses.

Step 1: Gather the necessary information

Before you get started, you'll need to have some basic information on hand. This readiness will make the process smoother when using online calculators or requesting quotes from insurance providers. You’ll typically need:

• ZIP code (it impacts cost due to theft rates, accident statistics, and more)
• Credit score range (some states factor this into pricing)
• Age and gender (younger and male drivers often face higher rates)
• Vehicle details (year, make, and model)
• Desired coverage limits (liability, comprehensive, collision, etc.)
• Driving history (accidents, violations, or previous claims)
• Annual mileage (your risk increases the more you drive)

Step 2: Determine the coverage you need

As you estimate costs, it's important to understand the available coverage. Your policy should provide enough protection for your needs while balancing affordability.

Here are the most common types of car insurance:

• Liability coverage – Covers bodily injury and property damage if you're responsible for an accident; it’s mandatory in most states
• Collision coverage – Pays for car repairs after a collision, regardless of who is at fault.
• Comprehensive coverage – Covers damage from theft, vandalism, natural disasters, and other non-collision incidents
• Uninsured/underinsured motorist coverage – Protects you when a driver with insufficient insurance hits you
• Personal injury protection or medical payment coverage – Pays the accident-related medical expenses for you and your passengers
• Gap insurance – Covers the difference between what you still owe on a car and its actual cash value (if it's totaled)

Step 3: Use an online car insurance calculator

Online calculators can provide estimated car insurance costs based on your personal details and coverage needs. While not as precise as getting direct quotes, popular insurance cost estimators from Bankrate and NerdWallet provide a ballpark estimate of monthly costs.

Many major insurers also offer their own calculators, which can provide more exact info.

Step 4: Compare quotes from multiple insurers

You should shop around for at least three quotes to find the best deal. When evaluating quotes, compare identical coverage levels to get an accurate comparison.

While pricing is important, consider customer service ratings and claims satisfaction. NerdWallet, U.S. News & World Report, and Consumer Reports may be able to help you here.

Step 5: Look for discounts to lower your premium

Many insurance companies offer discounts. It’s always a good idea to ask an insurance agent about any available discounts, as some may not be advertised. The most common discounts include:

• Safe driver discounts – For when you have a clean driving record
• Low mileage discounts – For when you drive less than the national average
• Good student discounts – For young drivers with a high GPA
• Vehicle safety feature discounts – For cars with airbags, anti-lock brakes, or advanced driver assistance systems
• Anti-theft device discounts – For cars with security features like an alarm or GPS tracking
• Multi-policy discounts – For those who bundle auto and home insurance together

Doing your research will pay off in the end

Finding a budget-friendly policy requires knowing what factors influence your premium, comparing multiple quotes, and looking for discounts. With a little legwork, you can guesstimate the cost and potentially lower the premium.

If you’re in the market for a new or used car, Credit Acceptance can help you explore financing options that meet your needs. We work with over 12,000 dealerships coast-to-coast and allow you to get pre-qualified for auto financing online.