How To Buy Affordable Auto Insurance

Just about everyone complains about the ever-increasing cost of auto insurance. So what steps can we take to reduce auto insurance costs?
You should seriously consider some or all of the following steps, depending on your circumstances, to reduce your auto insurance costs and put money back into your pocket.

1. Factor insurance into cost of your car purchase
First and foremost, you must factor the cost of insurance into your buying decision. After all, buying a car for most people is a long-term commitment and knowing you can affordably insure it year-after-year is important. No matter what kind of vehicle you’re thinking of buying compare auto insurance quotes from competing insurers first, because not only do rates differ between insurers but also between vehicles.

2. Compare Insurance Costs, Before You Buy a Car
Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals, and because statistically, the people who own them tend to drive more recklessly. If you own such a vehicle, you will likely pay a higher premium than if you owned a station wagon, sedan, or other low-risk vehicle.

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft and previous claims history for that vehicle. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include daytime running lights and anti-theft devices. To help you decide what car to buy, you can get information from state or provincial insurance agencies.

Cars that are more attractive to thieves, more costly to repair, and more commonly involved in accidents, cost more to insure. According to the information available at the Insurance agencies, the following 2002 and 2006 car models are most likely to incur an insurance loss:
1. Acura Integra, 2-door
2. Chevrolet/GMC 2500 4WD
3. Dodge Durango 4WD, 4-door
4. Ford Escort ZX2, 2-door
5. Ford Mustang/GT, 2-door
6. Ford Ranger 4WD
7. Honda Civic/Si, 2-door
8. Honda Prelude, 2-door
9. Hyundai Tiburon, 2-door
10. Lexus RX300 4WD, 4-door

Accordingly, you can better manage costs if you purchase a vehicle that is less likely to incur an insurance loss, such as:
11. Acura MDX 4WD, 4-door
12. Buick Regal, 4-door
13. Chevrolet/GMC Astro/Safari Wagon 4WD
14. Mercedes Benz C230, 4-door
15. Pontiac Montana
16. Saturn SC, 2-door
17. Saturn LS, 4-door
18. Saturn SL, 4-door
19. Toyota Camry Solara SE, 2-door
20. Volvo S40, 4-door

3. Shop the Insurance Market
Prices vary from insurer to insurer, so it pays to shop around. Coverage from one insurer to the next can vary by hundreds, if not thousands of dollars. Get at least three price quotes. You can call companies directly or access information on the Internet. When you are comparing rates, use the same deductibles, coverage, and limitations, so that you’re comparing apples with apples.
At comparison sites where you can actually compare competing rates side-by-side, they’ll do this for you. Visit some of the sites advertised on this website for this service. The only way to make sure you are getting the best base price for your policy is to compare, compare, compare.

4. Increase Your Deductible
The higher your deductibles, the lower your insurance premium so raise them as much as you can. Keep it affordable though, because this is how much you’ll have to cover if you need to submit a claim. Sometimes you can reduce your annual premium by 10 percent or more if you increase your deductible from, say, $250 to $500. If your claim is $2000 and your deductible is $500, you will pay $500 and your insurance company will pay $1500.

5. Insure your Home and Automobile with the Same Company
Buying your home and auto insurance policies with the same insurer may qualify you for a discount called the “Multi-line discount”, which may shave up to 10% on both policies. Most insures offer this saving as an incentive to get your home insurance business too.

6. Insure all Vehicles under the Same Policy
Similarly, most insurers offer a “Multi-vehicle discount” for customers who insure more than one car on the same policy. If you have multiple vehicles, placing them under the same policy can save you up to 10%.

7. Drive Safely and Follow the Speed Limit
Your driving record is one of the most influential factors in determining your insurance rate. You may be eligible for a price break on your policy if you maintain a clean driving record for a specified period (usually three years). A clean driving record generally means no accidents, moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.
Not only can speeding tickets be costly, but they can affect your insurance rates for up to three years and accidents stay on your record for at least six! With a bad driving record, you can find yourself paying a lot of extra premium over the years.

8. Maintain a Good Credit Record

Establishing and maintaining a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price auto insurance policies. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

9. Take Advantage of Low Mileage Discounts
Some insurers offer discounts to motorists who drive a lower than average number of miles a year. Low mileage discounts can also apply to drivers who car pool to work. If you drive less than a certain number of miles in a year (e.g., 7,500), you may qualify for a low-mileage discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, use public transportation instead of driving. When you go away on vacation, fly or take the train.

10. Seek Out Other Discounts

Other discounts may be available if you meet certain criteria. Examples may include age group, low mileage, occupation, if you install an alarm or other safety devices in your car, discounts for taking a defensive driving or drivers education course, being an auto club member, or staying with the same auto insurance company for a number of years. These discounts vary by insurer. Don’t forget to mention to your insurer if you have two occasional drivers living at home. You could pay the premium for only one, not for both.

11. Ask about Group Insurance
Some insurers offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups, or other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

12. Older car? Think about dropping your collision coverage
If your car is getting up there in age, you may want to think about dropping the collision coverage on your policy. You need to think about this one though - it’s not always a clear-cut decision. You need to weigh the cost of the collision coverage with the value of your car and your chosen deductibles. For example, if you had a 10-year-old car that was worth about $1,000, and your deductible was $1,000, that collision coverage is not going to be worth a hoot.

13. Don’t pay for coverage you don’t need
Eliminating certain options, such as glass replacement coverage or the comprehensive and collision coverage on a very old car, can put money back in your wallet. However, keep in mind that should certain situations arise for which you chose not to have coverage, you will, ultimately, be faced with the cost of those repairs.

14. Don’t drive to work
The more you are on the road, the higher your chances of getting in an accident. Insurance rates are higher for people who commute to work. So taking the bus or sharing a ride will not only help you save on parking and gas, but will help lower your insurance premiums.

15. New driver? Take a driver’s training course
Licensed drivers who have completed an approved drivers training course in the last 3 years pay lower premiums. Safer drivers pay lower insurance rates.

16. Have an anti-theft device installed in your car
You may receive discounts on your insurance if your car is equipped with one or more of the following options: anti-lock brakes, automatic seat belts, and airbags. Similarly, anti-theft devices such as car alarms and tracking systems (e.g., Lojack) may also get you a discount because they reduce the chances of your car being stolen or vandalized.

17 Move
If you live in a rural community with little crime and traffic congestion, your premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident. Granted, you shouldn’t move just to cut your auto insurance costs. However, this may be one of many factors in your decision if you’re thinking about relocating from the country to the city.

18. Keep your car in a garage
Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction.

19. Build a relationship with your insurance company
Most companies will charge an existing client who has more than one recent claim less than they would a new client in the same situation.

20. Keep your records updated
Make sure your insurance company always has correct and up-to-date information on file; it may be to your benefit! For instance, if you move from the downtown core of a large city to a suburban area, your rates may go down.

When you comparison shop, inquire about discounts for the following:
• $500 deductible
• $1,000 deductible
• More than 1 car
• No Accidents in 3 Years
• No Moving Violations in 3 Years
• Driver Training Courses
• Defensive Driving Courses
• Anti-Theft Devices
• Low Annual Mileage
• Air Bags
• Anti-Lock Brakes
• Daytime Running Lights
• Student Drivers with Good Grades
• Auto and Homeowners Coverage with the Same Company
College Students away from Home
• Long-Time Customer
• Other Discounts

The key to savings is not the discounts, but the final price. An insurer that offers few discounts may still have a lower overall price. The discounts listed may not be available in all states or provinces or from all insurance companies.

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