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Lower Your Auto Insurance Premium

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Owning and maintaining a car costs a lot of money, but it doesn't have to leave you broke. Here are 15 strategies to help you reduce your auto insurance premium:

1. Reduce Coverage on Older Vehicles

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Photo © Erin Huffstetler
If your car is old and paid for, consider eliminating your collision coverage. This is the coverage that pays for any damage that you cause to your own vehicle, and it makes up a big portion of your insurance cost.

2. Use One Insurance Company

Group all of your insurance policies – auto, home/renters, etc. – at one insurance company, and you'll earn a multi-line discount, good for up to 10% off of your total premium.

3. Raise Your Deductible

Slash your auto premium drastically by raising your deductible – the amount you pay out of pocket when you make a claim. The difference between a $250 deductible and a $500 deductible is usually quite substantial, and the difference between a $250 deductible and a $1,000 deductible, even more so. Decide how much you can afford to spend out of pocket, and then adjust your deductible accordingly.

4. Get a Quote Before You Buy

Before buying a new vehicle, call your insurance agent to find out how much it's going to cost to insure the vehicle. Premiums can vary widely based on the make, model and year of a vehicle. This is one instance where smart shopping really pays.

5. Drive Carefully

Safe drivers are rewarded with a better insurance premium. Avoid speeding and stay out of accidents, and you'll save 5% or more on your premium. Most companies will further reduce your rate every time you go three years without a traffic violation.

6. Drive Less

Are you an infrequent driver? Then, tell your insurance agent about it. Less time on the road means less opportunity to get into an accident, and this often translates into a lower premium for you. Are you a carpooler? Then, be sure to mention this as well. There's more than one way to earn the low-mileage discount.

7. Buy a Safe Car

Choose a car with added safety features like air bags, anti-lock brakes, electronic stability control and automatic seat belts, and your smart choice will be rewarded with another discount.

8. Seek Teen Driver Discounts

Insuring a teen driver can be expensive, but there are things that you can do to minimize the expense. Ask about a good-student discount if your teen carries a B-average; then check to see if taking a safe driving course could result in a second discount. These two questions could net you a savings of 5 to 25%.

9. Skip Monthly Bill Pay

The high cost of insurance may make monthly bill pay seem like a good idea, but you'll usually pay for the convenience with add-on fees. To avoid these extra charges, request to be billed every 6 or 12 months instead (and ask for auto-billing to save even more).

Note: If the large bill makes you nervous, you can set up your own monthly bill pay. Just divide your premium by twelve, and deposit that amount into a savings account each month. This will ensure that you'll always have the money when the bill comes due.

10. Protect Your Car from Theft

Garage kept cars and cars with alarm systems are less likely to be stolen, and therefore less expensive to insure. Be sure to ask your insurance agent if your car qualifies for a theft-deterrent discount.

Did you know? Some insurance companies will give you a discount if you etch your car's VIN number on the windows, install wheel locks or have an ignition cutoff switch.These lesser-known discounts are certainly worth asking about.

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