So Long AAA! Lowering the Cost of Car Insurance in My House

Cost of Car InsuranceWhat do you say to the car insurance company you’ve had for the past 10 years when they won’t budge on their rates?

Don’t let the door hit your butt on the way out!

That’s exactly what I forced to say recently to my insurance provider, AAA, when they refused to negotiate down on the cost of car insurance for our household.  Even though we gave them the chance to hold our business, we ultimately had to come to the decision to shop around only to discover that there were far better rates for basically the same amount of coverage.

Here’s what happened.


Reducing the Cost of Car Insurance:

Frequently in the MMD household, we like to choose one bill from our expenses and pick on it.

This month it was car insurance that we decided to attack and try to lower our overall budget.

To be fair, our auto coverage has had it coming for some time now.  Every 6 months for the last 2 years the cost of our auto insurance has done nothing but go up and up.  How much was my latest renewal notice?

  • $150 per month ($900 for a 6 month period).

That’s way too much!

Now I may not be a car insurance expert, but how much is car insurance when you continue to drive the same two used cars (the oldest being almost 9 years old) year after year and incur no traffic violations or accidents?  Shouldn’t my rates be getting cheaper?

I decided it was time to explore my options.


The Beauty of Shopping Around:

Man, I love the Internet.

Within minutes I had costs for all kinds of reputable car insurance providers.  Armed with actual quotes and hardcopies of new policy offerings, I had the power of persuasion right at my fingertips.

In the past when I wanted to lower my auto insurance expense, I would collect 3 quotes and send them to my agent.  Usually I’d use Progressive, Geico, and at least one other recognizable name brand.  For almost a decade my agent would write me back with at least some break in price.  They may not have been the lowest price, but at least they’d do enough on the cost to show they were willing to work with me and keep my business.

Then last year that came to a stop.  The only reply I’d get from insurance rep was the “that’s our price – take it or leave it” eloquent sort of response.

They did the same thing this time around too.

Well, I can’t say I didn’t warn them.  I know this from my own job:

When a customer threatens to go shopping around for a better price or service, they’re going to find it.  So if you’re smart, you won’t even give them a reason to go looking.

Unfortunately this is a lesson that my car insurance company has yet to learn.  Because I did end up finding a much better deal …


Cheaper Auto Insurance is Out There:

Cost of Car InsuranceThe thing about giving someone an ultimatum is that you have to be prepared to really make a hard change if things don’t go the way you want it to.  You have to let them know this is NOT a bluff.

That’s exactly what I forced to say recently to my insurance provider, AAA, when they refused to negotiate down on the cost of car insurance for our household. Even though we gave them the chance to hold our business, we ultimately had to come to the decision to shop around only to discover that there were far better rates for basically the same amount of coverage.

It kind of stunk.  I’ve been with them for 10 years.  Sometimes I get AAA discounts when I shop.  But none of this anywhere close enough to keep me around and pay way more than I need to.

So who did we end up going with?  Believe it or not, Progressive had the best price.

For the insurance policy I put together, they only wanted $558 for 6 months (if I paid it all up-front).  That’s about $93 per month.  Can you believe that?  That’s almost 38% lower than what AAA was about to charge me for basically the same thing.

This experience is yet again another shining example that it pays to shop around for better coverage prices and explore your options.  In this day and age of instant Internet quotes and auto insurance being pretty much nothing more than a commodity, you’d have to be a fool not to work with your customers and try to get them the best price.  Name brands don’t really carry much weight anymore.  As long as I’m working with a reputable company that is going to honor my claims and be there when I need them, I’m going to find the best deal possible!

Readers – What is the cost of car insurance in your household?  Have you had to switch around service providers when one of them refused to work with you on cost?


Related Posts:

1) It’s Time to Get Real About Our Household Expenses

2) You’re Going to Need A LOT More Emergency Cash – Bad Things Will Happen!

3) A Financial Plan Sample – How Should I Budget My Money?

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  1. says

    Nice work MMD! I could not agree more, especially in today’s age, that if you want a better price it generally is pretty simple to go out and find one. I think it’s the companies that are unwilling to flex that’ll run in to trouble in the future. We pay around $70-80 per month on our two cars with USAA and they call us several times per year to see how they can lower it which is nice. :)
    John S @ Frugal Rules recently posted..How Has Paying Off Debt Changed You?My Profile

  2. says

    Living in Boston our car insurance is expensive. About $2400 per year. I’ve shopped around a few times and found policies that were slightly cheaper but Amica actually does lower their rates from time to time and the service is always great. I’ve never felt like switching was worth it when I wasn’t sure what kind of service I’d get on the other end.
    Matt Becker recently posted..This is the Moment Where All That Saving Pays OffMy Profile

    • says

      $200 per month? Ouch – that’s quite steep. But I do understand that for the area that’s probably what’s driving the premium. I admit I was nervous as well to switch because I wasn’t sure how the new service would be; especially when I needed it the most. I did read a few reviews which helped to put my mind at ease ..

    • says

      I have never heard of Grange before; I’ll have to look that one up. I’m hoping Progressive lives up to its reputation. I’d hate to get in an accident and find out otherwise.

  3. says

    I’ve been with Progressive for over 10 years now. Ironically, AAA was my previous insurer. What took you so long?! Haha I’ve had wonderful experiences over the years with Progressive. My favorite thing is their responsiveness via email when I’ve had questions. In 10+ years, I’ve never once talked to a Progressive rep on the phone. I do everything online – including my payments. And I love it that way.
    Matthew Allen recently posted..[Dumb] Passive Income Report for January 2014My Profile

  4. says

    I’ve switched several times. I try to do the auto and homeowner’s with the same company to get a discount. Progressive was really good with the auto but customer service was terrible with home owner’s. They also doubled our rate, so out they went. I don’t really have any loyalty as long as they have a good rating.

    • says

      I noticed that Progressive outsources the homeowners insurance to someone else. I’ll probably just stick with the car insurance portion.

  5. says

    That’s some serious coinage you saved right there. Timely post too, because I just received my renewal notice from Geico. I’ve been with them for years, no tickets or accidents, and it’s just kept going up. I don’t understand how it can be either. I called at my last renewal and they gave me the sort of “take it or leave it” response you received. It was too late for me to shop around, but it isn’t this time, and you bet I’m going to do it! Thanks for all the info.
    Ryan @ Impersonal Finance recently posted..early retirement is actualMy Profile

  6. says

    We currently pay $360 every 6 months for full coverage on Greg’s Prius and liability on my minivan. I shop around every time our policy comes up for renewal but I haven’t found anything enticing enough to get me to switch yet! =)

    • says

      What’s funny is that I never really used their service much for travel or discounts anyways. I don’t think I’ll be missing much. I made sure to buy Roadside assistance with Progressive. I don’t care who I’m with – that’s the one thing I need!

  7. says

    You’ve just reminded me, I need to get on top of my insurance!
    I just sold a car earlier this week and I need to cancel the insurance today. I’m spending around $150 a month on the insurance on that car, so the quicker I end the policy, the better.

    I have started shopping around more for things like insurance since I started on my quest o be a millionaire. You’re right, insurance companies aren’t going to jump out of their skin to give you a good deal, you really need to shop around. I’ve been using a lot of comparison sites to help in the process.
    Mr Ikonz @ Project Ikonz recently posted..I’m now debt free! (and have no car)My Profile

  8. says

    Have to say I’ve been incredibly happy with AAA for our insurance. We shopped around 2 years ago when putting the wife’s car on my policy, and found a few places which were slightly cheaper, but I love AAA’s customer service. The few times I’ve needed them they went above and beyond, no questions asked. That’s worth quite a lot to me to know my insurance company isn’t going to betray me when the times get rough.
    Jack @ Enwealthen recently posted..Simple Tax Mistakes You Want To AvoidMy Profile

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