I’m sure you’ve seen the commercials from companies like Allstate, Farmers, and Progressive that promise enormous savings, so you just need to pick one randomly, right?
It’s not that simple, unfortunately, as there are many unknowns like your financial responsibility, whether or not your vehicle has good safety ratings, and if you own your own home, that all help calculate your car insurance rates. The content below will cover the types of things that cause high car insurance rates and also should give you a solid foundation to find cheaper car insurance in Tennessee.
For infrequent drivers, one of the more important considerations that are looked at to help calculate the amount you pay each year for auto insurance is where your car is garaged in Memphis. Areas with more people or even just a higher incidence of claims likely pay more, whereas areas with fewer weather claims and lower vehicle theft rates have the enjoyment of a little cheaper coverage.
The table below ranks the priciest cities in Tennessee for low mileage drivers to purchase auto insurance in. Memphis comes in at #1 with the annual price of $1,460 for the average insured, which is approximately $122 per month.
| Rank | City | Annual Premium |
|---|---|---|
| 1 | Memphis | $1,460 |
| 2 | Bartlett | $1,363 |
| 3 | Germantown | $1,360 |
| 4 | Collierville | $1,309 |
| 5 | Jackson | $1,253 |
| 6 | Columbia | $1,226 |
| 7 | Oak Ridge | $1,210 |
| 8 | Nashville | $1,201 |
| 9 | Murfreesboro | $1,194 |
| 10 | Smyrna | $1,194 |
| 11 | Clarksville | $1,194 |
| 12 | Knoxville | $1,194 |
| 13 | Cookeville | $1,182 |
| 14 | Brentwood | $1,179 |
| 15 | Spring Hill | $1,169 |
| 16 | La Vergne | $1,162 |
| 17 | Maryville | $1,160 |
| 18 | Hendersonville | $1,158 |
| 19 | Chattanooga | $1,149 |
| 20 | Franklin | $1,140 |
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Rates are approximated as zip code location can revise premiums greatly.
The make and model of vehicle requiring insurance is probably the largest consideration in finding cheap insurance for low mileage drivers. Vehicles with high performance, a lack of advanced safety features, or high incidents of liability claims will cost substantially more to insure than safer models.
The data below outlines auto insurance costs for a number of the most cost-effective automobiles to buy insurance for.
| Vehicle Make and Model | Estimated Cost for Full Coverage |
|---|---|
| Ford Escape XLS 2WD | $1,594 |
| Honda Accord LX-P 4-Dr Sedan | $1,603 |
| Toyota Prius | $1,767 |
| Honda CR-V EX-L 4WD | $1,784 |
| Chevrolet Malibu LS | $1,890 |
| Chevrolet Impala LT | $1,900 |
| Chevrolet Equinox LS 2WD | $1,890 |
| Volkswagen Jetta S 2.5 Station Wagon | $1,947 |
| Honda Civic VP 4-Dr Sedan | $1,952 |
| Honda Odyssey LX | $1,981 |
| Ford Edge Sport AWD | $1,989 |
| Toyota Corolla LE | $1,998 |
| Toyota Tacoma X-Runner 2WD | $1,989 |
| GMC Sierra SLE Crew Cab 2WD | $2,066 |
| Dodge Grand Caravan SXT | $2,109 |
| Ford Explorer Limited 4WD | $2,118 |
| Hyundai Sonata SE 4-Dr Sedan | $2,126 |
| Toyota RAV4 Limited 2WD | $2,136 |
| Hyundai Elantra Blue 4-Dr Sedan | $2,140 |
| Toyota Camry Hybrid | $2,160 |
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Data rating is based on single male driver age 40, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Tennessee minimum liability limits. Discounts applied include multi-vehicle, homeowner, safe-driver, claim-free, and multi-policy. Information does not factor in specific garaging location which can change insurance rates significantly.
By looking at the data, we can presume that cars like the Ford Escape, Honda Accord, Toyota Prius, Honda CR-V, and Chevrolet Malibu are a few of the less-costly vehicles to insure for infrequent drivers.
Illustration showing the impact of accidents and violations
In a perfect world, the ideal way to enjoy the most affordable auto insurance rates for infrequent drivers is to pay attention while driving and not receive tickets or have accidents. The illustration below shows how traffic citations and fender-benders can affect insurance rates for different categories of driver ages. The prices are based on a single male driver, full physical damage coverage, $100 deductibles, and no policy discounts are applied.
The chart shows that the average cost of car insurance in Tennessee per year with no accidents and a clean driving record is $2,220. Receive one speeding ticket and the average cost surges to $2,500, an increase of $280 each year. Next add two accidents along with the one speeding ticket and the annual cost of auto insurance for low mileage drivers increases to an average of $4,874. That’s an increase of $2,654, or $221 per month, just for being a careless driver!
Difference between full coverage and liability only rates
Paying less for auto insurance is important to most drivers, and a great way to pay less for insurance for low mileage drivers is to only buy liability coverage. The illustration below illustrates the comparison of auto insurance costs with full physical damage coverage compared to only buying liability only. The costs are based on no violations or claims, $100 deductibles, drivers are not married, and no policy discounts are applied.
If we average all the age groups together, physical damage coverage costs $2,220 per year over liability only. That is a big expense that brings up the question if you should buy full coverage at all. There isn’t a written rule to stop paying for physical damage insurance, but there is a general convention. If the annual cost of comprehensive and collision coverage is more than around 10% of replacement cost minus your deductible, then you might want to consider buying only liability coverage.
For example, let’s assume your vehicle’s replacement value is $9,500 and you have $1,000 policy deductibles. If your vehicle is severely damaged, the most your company would pay you is $8,500 after paying your deductible. If it’s costing in excess of $850 annually for physical damage coverage, then it might be time to consider dropping full coverage.
There are some cases where dropping physical damage coverage is not financially feasible. If you haven’t paid off your loan, you have to keep full coverage to protect the lienholder’s interest. Also, if your savings is not enough to buy a different vehicle if your current one is totaled, you should not drop full coverage.
Types of discounts on Memphis car insurance rates
Insurers that provide coverage for low mileage drivers may have special discounts that may potentially lower prices by as much as 30% if you meet certain criteria. A few of the larger companies and some of the premium reductions they offer are:
- Farm Bureau policyholders can earn discounts including multi-policy, renewal discount, multi-vehicle, safe driver, and youthful driver.
- State Farm offers discounts for passive restraint, student away at school, safe vehicle, anti-theft, and good driver.
- Progressive discounts include good student, homeowner, multi-vehicle, online signing, and continuous coverage.
- Allstate may offer discounts for premier discount, good payer, economy car, farm vehicle, multi-policy, senior citizen, and utility vehicle.
- Nationwide may have discounts that include good student, defensive driving, accident-free, family plan, multi-policy, anti-theft, and easy pay.
- MetLife has discounts for good driver, accident-free, good student, claim-free, and defensive driver.
The illustration below shows the difference between insurance costs with and without discounts applied to the rates. The prices are based on a female driver, a clean driving record, no at-fault accidents, Tennessee state minimum liability limits, comp and collision included, and $500 deductibles. The first bar for each age group shows insurance cost with no discounts. The second shows the rates with homeowner, marriage, safe-driver, anti-theft, passive restraint, and multiple policy discounts applied. When these discounts are applied to the policy premium, the average savings per year on auto insurance for low mileage drivers is 28% or $487.
Why you should be shopping around
Tennessee auto insurance rates are impacted by many factors which can substantially change the price of your policy. Simply improving your credit, becoming a homeowner, or getting a DUI may cause policy rate changes that can cause some rates to be cheaper than others.
Also, insurance companies amend premium rates as often as every three months to adjust for unexpected claims or profits. Larger than normal claims can result in high rates, while a profitable period can cause more affordable Memphis car insurance rates.
For instance, the data below shows a variety of companies that have the cheapest car insurance in Memphis, TN for a 40-year-old male driver with a good driving record, no prior claims, and a good credit rating. If we estimate rates based on his personal profile, Utica National offers the best car insurance rates in Memphis at $1,091 annually. This is $237 less than the average premium paid by Tennessee drivers of $1,328. Auto-Owners, Cincinnati Insurance, Penn National, and Tennessee Farmers round out the rest of the cheapest Memphis, TN auto insurance companies.
The next chart shows rates after we give the driver from the first rate comparison a couple of claims, poor credit, and a few traffic violations. Because each company has a unique formula to set policy rates, comparing quotes may now present a different ranking of the cheapest companies as shown below.
Erie now has the cheapest car insurance in Memphis with Nationwide, Allied, Westfield, and GEICO also having competitive pricing. This example illustrates why it is important to spend some time comparing rates when trying to get the most budget-friendly insurance rates for low mileage drivers.
Insurance prices are influenced by many different factors and change dramatically, so the cheapest company the last time you shopped your coverage around may now be priced much higher than other options.