Learn When to Buy Car Insurance With This Handy Guide

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Written by Eric Schad Edited by Nick Versaw

Updated December 6, 2022

Sometimes, timing is everything. What is the best time to buy a car? The end of December. When is the best time to buy a plane ticket? Seventy days before you depart. But when to buy car insurance? That one seems harder to answer — at least to the uninitiated.

It’s important to note that auto insurance never goes on sale. There’s no magic month when rates are lower. While there’s no wrong time to switch car insurance companies or buy a new policy, you stand to save a little extra and potentially avoid fees if you time your purchase perfectly for you.

If you’re in the market for a new car insurance policy — whether you need full coverage, collision coverage, liability coverage, or something else — discover when to buy car insurance to maximize your savings.

When to Buy Car Insurance: Renewal Time Considerations

Most car insurance policies are just 6 months long. That enables your insurer to raise your rates rapidly after an accident or a claim. However, it also gives you the chance to shop around and potentially lower your insurance costs on the various types of coverage you need.

Twice a year, you probably get an email from your car insurance company that says something like this: “Your auto-renewal is all set! Thank you for being a valued customer. For your convenience, we’ll automatically process your payment.”

This sounds like a done deal, right? It’s not, though! This message gets sent about a month before your policy renews. That means it’s a great time to start shopping around for new car insurance if you’re unhappy with how much you’re paying.

Finding a better deal is easy with Compare.com — it only takes a few minutes to get free, personalized quotes from multiple insurance carriers. Some companies will even give you an early-bird discount if they see that you’re shopping for insurance 2-3 weeks before your policy expiration date.

What Are Some Other Good Times to Switch Car Insurance Coverage?

Maybe you suspect that you’re paying too much for insurance, but you just can’t get motivated to shop for the most affordable rate. Anyone can understand that! But as much as you may love finding great deals on car insurance, it’s not exactly a wild way to spend Saturday night.

If you’re searching for ways to save cash on your next policy, here are some ideas to get you started:

• Compare auto insurance quotes as part of a personal financial assessment. Is your bank account nearly empty by the end of the month? If that’s the case, shopping for lower auto insurance rates on top of other money-saving tips is helpful. Consider refinancing auto loans, cutting back on extra expenditures, transferring balances to a low-APR credit card, canceling monthly subscriptions, or even changing car insurance providers. Making all of these moves can save hundreds per month. At its core, the idea of when to buy car insurance is when it will benefit you the most from a financial standpoint.
• Compare auto insurance quotes after a significant life change. Are you getting married or moving soon? Is your kid turning 16 or heading to college? Do you have speeding tickets or a DUI falling off your driving record? These events can affect your insurance premiums dramatically and open up the opportunity for insurance discounts that can shrink the bill on a new or existing policy.
• Compare auto insurance quotes when you’re buying a new car. Your current insurance rates will definitely change when you buy a new vehicle. Late-model cars, while safer than older ones, are generally more expensive to insure than used cars. You may also want to increase your insurance coverage to protect your shiny new ride. In some cases, lenders require full auto insurance coverage to protect their collateral — including comprehensive coverage, liability insurance (bodily injury and property damage), and collision coverage.

So whether you’re expecting a huge change in your life, want a new ride, or need to improve your budgeting skills, now is always a great idea of when to buy car insurance.

Do I Need to Wait for My Policy to Expire to Shop for Auto Insurance?

No! Unlike other service contracts — such as a contract for a home security system — auto insurance policies generally allow you to cancel anytime. If you find a better deal from a different auto insurance company and you’re planning on changing car insurance companies anyway, go ahead and make the switch.

Call your insurer first to find out how to cancel your policy. For some, all you have to do is tell them on the phone. Others want a written cancellation request, which simply means writing something like:

• Please cancel my car insurance policy, #25275910, as of this date. I request that you confirm this cancellation in writing, cease all charges for premium payments, and refund any unused premiums.

Some insurers charge a cancellation fee if you end your policy before the end of the coverage period. The companies that charge a fee — typically around $50, or 10% of your remaining premiums — tend to be non-standard or high-risk insurance carriers, which cater to customers with past accidents, traffic convictions, or insurance lapses. However, double-checking is always savvy, as you don’t want to drive uninsured.

If you do business with one of these fee-charging insurance companies while also thinking about when to buy car insurance, just do the math. If your free quote on Compare.com reveals that you could save an annual average cost of $500 by switching, then that’s probably worth paying a one-time $50 fee to buy auto insurance now rather than later.

When’s the Right Time to Cancel My Old Auto Insurance?

Let’s say you shop for car insurance on Compare.com, and you get a quote that’s $100 less per month than what you’re paying now. Do you call your current insurer immediately and say, “See ya later!?” No! You need to buy your new policy before you cancel your old one. Keep in mind that most car insurance companies may have a short grace period, but you shouldn’t tempt fate by waiting until the last minute.

A lapse in your insurance coverage, even if it’s just one day, can raise your rates in the future. It’s better to have some overlap than to risk a lapse. If you let your car insurance lapse, you’re not only driving uninsured, but you will also see a sizable increase in your car insurance rates or car insurance quotes the next time you need a policy.

Whatever you do, don’t just stop paying your car insurance bill. Your insurance provider will charge you late fees and may even take you to collections if you avoid paying your bills. Take the necessary steps from day one to avoid the hassle or burden of not having proper car insurance.

How Can I Get the Best Car Insurance Rate?

The only surefire way to get cheap car insurance, the best rates, and the coverage limits you want is by shopping around routinely. This doesn’t mean that you need to add car insurance shopping into your weekly practices. It simply means that an increase in your rates or the need to lower what you pay for insurance should force your hand to shop around.

The good news is that finding a great rate on your car insurance policy isn’t nearly as difficult as you might think. For the best rate on your car insurance, shop quotes on Compare.com today. Pop in your ZIP code below to get started.

Eric Schad Insurance Writer

Eric Schad has been an expert content writer for nearly a decade. Before getting behind the keyboard, he worked in the finance and music industries. With eight years of writing experience in the automotive and insurance industries, he enjoys communicating information that makes shopping for car insurance a breeze. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.