Many of you are familiar with the common television promotion of the talking reptile that assures you he will reduce your expenses if you apply for their cheap car insurance. Nonetheless, is the cash-saving lizard genuine, or is it just more marketing subterfuge put on by the glib admen of Madison Ave?

A couple years ago, the insurance industry began offering free online price quotes, Not long after, literally hundreds of insurance companies have jumped on the bandwagon with the mission to urge customers to buy their cheap car insurance. The insurance companies achieve this by showing their rates compared to their competitors and solicit you to choose them as the source for cheap car insurance.

However, is it possible for every car insurance company to actually be the cheapest? Yet, at least one company has to be more costly, otherwise, all prices would be the same. Well, there must be an answer to how the cheap car insurance strategy is possible.

The insurance companies employ a great deal of statistical data to determine a cheap car insurance premium to charge a specific customer, moreover, the standard set for individual classes of drivers will vary from company to company. The various classes of drivers inherently has a likelihood of filing a claim due to a covered occurrence, and therefore some insurers are able to absorb the costs of higher risk class drivers than others. Accordingly, this permits some insurers a large variance in the capacity to offer cheap car insurance.

For example, Company Y writes 72% of their insurance to middle-aged (low risk) drivers. Because they are ‘heavy’ with low risk drivers and the probability of claims is extremely low, they are better situated to offer high-risk (males 18-25) policies for less than some companies who write only high risk policies. The insurance company will solicit drivers in that high risk demographic to secure their business as a new customer. Even though the amount saved may be less than 15%, the consumer is (satisfied that he has received|glad to get} a cheap car insurance rate from a respectable company and the company is glad to have a new customer. They usually have special quotes about women car insurance.

It is improbable an insurance company will disclose their statistics or demography used in computing their formulas for premiums, for that very reason it is important to comparison shop for a cheap car insurance quote. Logging into a few insurance provider’s sites will eventually produce a suitable and affordable quote. The lizard may save you more than the caveman, however you could be in better hands with a good neighbor, if you just comparison shop to secure a cheap car insurance premium.

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