Is It Cheaper to Buy Car Insurance Online?

You have probably heard that you can buy cheap auto insurance online. It sounds logical that insurers would sell policies cheaper on the internet. In the early days of online sales, many companies quickly realized that they could reduce their sales teams substantially if they could get their customers buy online. Insurers also knew that they needed to offer discounts to tempt more and more customers to engage with them using the Internet since it wasn’t wide spread and many consumers were reluctant. That is why they offered cheap online car insurance.

In a short space of time, online sales become commonplace and insurers have been reducing their sales workforce substantially, especially telephone sales. Although it may be disputed, insurers have been resisting vehicle insurance rate increases thanks to savings in wages. So, it is fair to say that the Internet was influential in keeping the rates low for everyone. However, the question to answer is can you get cheaper car insurance online today?

Is Car Insurance Cheaper Online?

If it is more economical anywhere it has got to be on the Internet. All other methods involve manpower and has to include either costs of wages or commissions and infrastructure. When a policyholder completes the forms and payment online the insurer saves money and it is only fair to expect that these savings are reflected on the premium. This logic seems to be accepted by majority of insurance companies as they tend to differentiate their rates depending on the outlet.

For example, Progressive lays out their position on their website clearly as below when they answer the question of why they offer different rates through agents, online or by phone.

“Buying direct or through an agent could result in different prices for Progressive policies because those areas of our business make independent decisions about the expenses they incur and the prices of their products. If you buy through an agent/broker, your rate includes the commission paid to the agent/broker for selling the policy. If you buy directly from Progressive, the rate reflects the cost of building, staffing and maintaining the sales centers and marketing costs of that aspect of our business.”

Automobile insurance companies and many other firms prefer their customers to interact with them online. This would save them money as they wouldn’t need to employ many people to answer questions and give quotations. It was a common understanding that it was cheaper to buy car insurance online than by phone or through agents. However, it is becoming commonplace to use the Internet to purchase auto insurance that few companies may not offer better deals on their websites. And clearly, some insurers make no bones about offering lower rates on the Internet. Furthermore, there are companies like Esurance whose business model is almost completely online. They offer a totally different experience compared to traditional agent base auto insurance buying.

Is It More Likely to Find Affordable Car Insurance Online?

Shopping on the Internet has other benefits apart from getting cheap online auto insurance quotes from majority of insurers. Buying online is a totally different experience and many people embrace it and like more than face to face or over the phone transactions. Here are some of the reasons why you have a better chance of finding cheap online car insurance.

  1. You can play around with your coverage and get new quotes until you find the optimum balance between price and coverage if you do it yourself online. It may sound a lot of work but you should remember that the internet today is lighting fast. It shouldn’t normally take more than an hour to make a decision. The beauty of it is that it is your time and you can decide when to stop, have a break and go again. It is almost certain that you will piss your agent off if you keep asking him/her to make slight adjustments to coverage, deductible or other details and get new quotes.
  2. There is no limit as to how many quotes you can get on the internet. It is normal that every agent, broker or comparison website has its limits. However, you can use two or three different comparison websites and get some direct quotes online. You can also, ask brokers to get quotes for you by filling their forms on their websites without the need to see or call them. You have a better chance online of purchasing inexpensive car insurance because you can get many more quotes.
  3. You can check the affects of changes in your life on your premium before the change happens. For example, you can quickly get a quote and see how much your premium would change if you move to a different zip code. You can also get insurance quotes for a car you want to buy. This takes the guesswork out of equation and gives you real numbers to consider. Try asking an agent to give you quotes for a different car every other day until you decide on your new ride!

Many people actually choose the Internet to purchase auto insurance. Quite a few people prefer human-less transactions wherever they can get. They don’t want to talk to a broker face to face or tell their details. In a way, they are their own brokers. They go through many alternative quotes online, consider different insurers and choose a policy that will fit their circumstances perfectly. When they need to make a change on their policies they can sign in to their accounts and make the change. They can submit claim and follow the process in real time as well.

It may be to do with your personality as well. You may like to bond with your agent/broker or you are a type of person who avoids contact. For now, you have the option of walking down the high street and talking to your neighborhood broker or go online and get a few quotes. In fact, there is nothing stopping you to take advantage of both outlets and see which one comes on top. In other words, you can test if you can get cheap auto insurance online or your agent can beat the online quotes. You can let the natural selection process work for you.

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