The words “economical” and “insurance” probably shouldn’t be used in the same sentence, specifically when trying to find the cheapest car insurance for first-time drivers. Let’s familiarize you with some things that can significantly affect auto insurance prices, and come up with some ways to take a little off your next policy.
The vehicle model needing coverage is probably the largest consideration that determines whether or not you find the cheapest insurance for first-time drivers. Vehicles with lower performance, good crash test ratings, or a track record of few liability claims will cost quite a bit less to insure than adrenaline junky models. The next table shows auto insurance prices for a selection of the cheapest vehicles to buy coverage for.
| Make, Model, and Trim Level | Estimated Cost for Full Coverage |
|---|---|
| Ford Escape XLT 2WD | $11,070 |
| Honda CR-V LX 4WD | $11,077 |
| Volkswagen Jetta S 2.5 Station Wagon | $11,854 |
| Toyota Prius | $11,961 |
| Ford Explorer XLT AWD | $12,445 |
| Jeep Wrangler Rubicon 4WD 2-Dr | $12,453 |
| Dodge Grand Caravan SE | $12,445 |
| Ford Focus S 4-Dr Sedan | $13,023 |
| Ford Edge SEL AWD | $13,028 |
| Chevrolet Impala LT | $13,126 |
| Jeep Grand Cherokee Laredo 4WD | $13,136 |
| GMC Sierra SLE Crew Cab 2WD | $13,126 |
| Toyota RAV4 2WD | $13,132 |
| Chevrolet Equinox LS 2WD | $13,126 |
| Chevrolet Malibu LS | $13,134 |
| Toyota Camry LE | $13,126 |
| Toyota Tacoma Double Cab 4WD | $13,233 |
| Hyundai Elantra GLS 4-Dr Sedan | $13,803 |
| Honda Odyssey EX-L W/Rear Entertainment | $13,813 |
| Toyota Corolla XLE | $13,803 |
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Data assumes single male driver age 16, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Louisiana minimum liability limits. Discounts applied include claim-free, and safe-driver. Information does not factor in the specific area where the vehicle is garaged which can influence auto insurance rates considerably.
Looking at the data, we can infer that cars like the Ford Escape, Honda CR-V, Volkswagen Jetta, and Toyota Prius are likely to be the cheapest vehicles to insure for new drivers. The price for car insurance will be higher anyway because there is more risk for first-time drivers, but overall those models will probably have the cheapest car insurance rates compared to other vehicles.
Establishing which companies quote the cheapest auto insurance rates for first-time drivers calls for a bit more effort than just getting one or two price quotes. Each auto insurer has their own formula for setting rates, so let’s take a look at the lowest cost auto insurance companies in New Orleans, LA.
We do need to point out that New Orleans auto insurance rates are determined by lots of factors that control the price of coverage. Simply turning a year older, buying a different home, or getting caught speeding can trigger changes in premium that can make some companies cheaper in comparison to the competition.
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| Rank | Company | Cost Per Year |
|---|---|---|
| 1 | USAA | $1,626 |
| 2 | MetLife | $1,854 |
| 3 | Progressive | $1,927 |
| 4 | GEICO | $1,945 |
| 5 | Safeway | $2,198 |
| 6 | California Casualty | $2,246 |
| 7 | Southern Farm Bureau | $2,271 |
| 8 | State Farm | $2,359 |
| 9 | Safe Auto | $2,575 |
| 10 | Allstate | $3,035 |
| 11 | Encompass | $3,170 |
| 12 | Liberty Mutual | $3,756 |
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USAA generally has some of the cheapest car insurance rates in New Orleans at around $1,626 annually. MetLife, Progressive, GEICO, and Safeway are also some of the more affordable New Orleans, LA insurance companies.
In the above example, if you are currently insured with GEICO and switched to USAA, you might achieve yearly savings of around $319. Customers with Safeway could save as much as $572 a year, and California Casualty policyholders might see rate reductions of $620 a year.
Be aware that those premium estimates are averaged across all types of insureds and vehicles and are not factoring in a specific vehicle garaging location for first-time drivers. So the car insurance company that has the cheapest price for you may not even be in the top 12 companies shown above. That emphasizes why you need to get rate quotes using your own driver information and specific vehicle type.
One of the many factors that are looked at to help calculate auto insurance rates is where you live. Areas with a lot of weather claims or more people will most likely have higher rates, whereas areas that tend to be more rural can boast about having cheaper rates.
The illustration below shows the highest-priced areas in Louisiana for first-time drivers to purchase a policy in. New Orleans is listed at #1 having an annual price of $2,827 on average, which is about $236 each month.
| Rank | City | Annual Rate |
|---|---|---|
| 1 | New Orleans | $2,827 |
| 2 | Marrero | $2,544 |
| 3 | Harvey | $2,513 |
| 4 | Terrytown | $2,480 |
| 5 | Metairie | $2,254 |
| 6 | Kenner | $2,247 |
| 7 | Central | $2,223 |
| 8 | Prairieville | $2,191 |
| 9 | Baton Rouge | $2,165 |
| 10 | Shenandoah | $2,139 |
| 11 | Hammond | $2,128 |
| 12 | Alexandria | $2,054 |
| 13 | Laplace | $2,031 |
| 14 | Lafayette | $1,976 |
| 15 | Sulphur | $1,954 |
| 16 | Slidell | $1,919 |
| 17 | Lake Charles | $1,915 |
| 18 | Monroe | $1,911 |
| 19 | New Iberia | $1,909 |
| 20 | Shreveport | $1,894 |
| 21 | Houma | $1,846 |
| 22 | Natchitoches | $1,835 |
| 23 | Bayou Cane | $1,764 |
| 24 | Bossier City | $1,744 |
| 25 | Ruston | $1,669 |
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Rate information is comparative as vehicle location can decrease or increase price quotes noticeably.
Types of discounts on New Orleans auto insurance
Insurance companies that offer cheap quotes for first-time drivers may also provide discounts that could reduce prices by as much as 25% or more if you meet specific criteria. A few of the larger companies and their offered discounts are included below.
- State Farm may have discounts that include passive restraint, defensive driving training, anti-theft, multiple autos, accident-free, safe vehicle, and Drive Safe & Save.
- Progressive offers premium reductions for multi-policy, multi-vehicle, good student, homeowner, and online signing.
- Travelers may offer discounts for new car, IntelliDrive, hybrid/electric vehicle, save driver, continuous insurance, driver training, and multi-car.
- American Family policyholders can earn discounts including early bird, defensive driver, bundled insurance, Steer into Savings, good driver, multi-vehicle, and good student.
- Liberty Mutual includes discounts for new move discount, safety features, newly retired, good student, exclusive group savings, and teen driver discount.
The example below compares insurance rates with and without discounts applied to the rates. The costs are based on a male driver, no driving violations, no at-fault accidents, Louisiana state minimum liability limits, comp and collision included, and $250 deductibles.
The first bar for each age group shows insurance cost with no discounts. The second shows the rates with continuous coverage, anti-theft, good student, paperless filing, vehicle safety, and paid-in-full discounts applied. When drivers take advantage of discounts, theamount saved on auto insurance for first-time drivers is 28% or $1,199.
Rate comparison of full coverage and liability-only
Reducing premiums for auto insurance is important to the majority of vehicle owners, and a good way to save on the cost of insurance for first-time drivers is to not pay for full coverage. The diagram below compares insurance costs when comparing full coverage to liability only. Data assumes a clean driving record, no at-fault accidents, $250 deductibles, drivers are not married, and no additional discounts are factored in.
If the expense is averaged for all age categories, full coverage costs an additional $2,689 per year more than just buying liability only. Lot’s of drivers question when is it a good idea to stop buying full coverage. There is no set rule of when to stop paying for physical damage coverage, but there is a broad guideline. If the annual cost of coverage is more than around 10% of the replacement cost of your vehicle minus the policy deductible, then it might be time to buy liability only.
For example, let’s assume your vehicle’s claim settlement value is $7,000 and you have $1,000 deductibles. If your vehicle is totaled, you would only receive $6,000 after the policy deductible has been paid. If you are paying over $600 a year for physical damage coverage, then it may be the right time to buy liability only.
Why you should be shopping around
New Orleans auto insurance rates are influenced by many factors that will increase or decrease the cost of coverage. Improving your credit rating, having a teenage driver, or getting a driving violation can trigger price changes that can cause some rates to be cheaper than competitors. Also, insurers change rates as needed in order to protect their financial rating. A period of higher than normal claims may cause higher prices, while a profitable period can result in more affordable New Orleans car insurance rates.
To help illustrate this point, the graph below shows the companies that have the cheapest car insurance in New Orleans, LA for a 45-year-old male driver with no prior claims, no tickets, and great credit. When quoting prices based on his personal profile, USAA may offer the cheapest car insurance rates in New Orleans at $2,839 a year. This is $425 more than the average rate paid by Louisiana drivers of $2,414. MetLife, Progressive, GEICO, and Safeway round out the rest of the cheapest New Orleans, LA auto insurance companies.
Now we will give the driver from above an at-fault accident, poor credit, and a speeding ticket. Due to the fact that every insurance company has their own guidelines for filing rates in each state, comparing quotes may now show a different set of affordable companies as shown below.
California Casualty now has the best price on car insurance in New Orleans with State Farm, USAA, MetLife, and Progressive also being competitive. This example shows why consumers need to take the time to do a thorough rate comparison when trying to get the most budget-friendly auto insurance quotes for first-time drivers. Insurance rates are made up of many different factors and can increase or decrease at any time, so the cheapest company the last time you compared rates may now not even be in the top five.