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How to Get Cheap Car Insurance

The cost of driving your car increases every time you turn around. As money gets tighter, it is important to find ways to save. One way to save money is to lower the cost of your car insurance. 

Cheap Car Insurance Tips

  1. Check with your state's Department of Insurance.
  2. Ask for a discount.
  3. Check your credit and driving record.
  4. Maintain your car.
  5. Don't let your insurance lapse.
  6. Boost the security of your car.

Buy Insurance Together

Like anything, buying in bulk can save you money. Many companies will give you a discount if you buy more than one type of insurance with them. This could mean insuring all your cars at the same place or buying your homeowners and car insurance at the same place. 

However, this tip should never overrule shopping around first.c

Get a Discount

Discounts can save you up to 25 percent on your insurance premium. The trick is that you have to ask for them and the company is not usually going to offer them outright. 

One word of warning: discounts often depend on the state you live in and the car you drive.c

Low Mileage

Most insurance carriers offer a discount to people who drive less per year than normal. These are called "low mileage discounts." On average, driving less than 7,500 miles a year you can save you five percent while driving less than 5,000 miles a year can save you 10 percent.c

Farm or Ranch Vehicle

If your car or truck is used exclusively for work on a farm or ranch, some companies will offer you a discount.c

Professional

Teachers, farmers, scientists and engineers are often eligible for a discount because studies have shown that people in these professions are lower risks. Other professions that might be eligible for a discount include mail carriers, locksmiths, artists, clergy members, accountants and more.

You should also check with your employer to see if any group insurance rates are available, as well as any professional organizations that you are a member of, such as the National Education Association.c

    Military

    Members of the military can usually find a discount, unless they live in Georgia, Indiana, Maine, Massachusetts, Michigan, Mississippi, New Jersey, New Mexico, Tennessee or Texas.

    You should also check with your insurance company about reducing your coverage if you are sent overseas and put your car in storage. Veterans are also eligible for certain discounts.

    Club Membership

    Being a member of certain organizations such as the Automobile Association of America (AAA) or the American Association of Retired Persons (AARP) can save you money on your car insurance. 

    For example, Hartford's AARP Auto Insurance Program can save members up to 45 percent on their car insurance by insuring multiple cars, combining it with their homeowner policy or staying with their company for five years.

    Special Safety Features

    Certain safety features on your car could lower your insurance premium. These include things like air bags, anti-lock brakes, daytime running lights and motorized seat belts (also known as "passive restraint systems").

    Good Driver

    This is the most commonly advertised and well known deal on insurance. Most people think the only way to get this discount is by having a good driving record free of accidents and moving violations. This is not true. You may also get this discount if you have taken a defensive driving or safety-driving course.c

    High GPA and Student Discounts

    Most parents with teens are familiar with this discount. Some insurance companies offer a discount to teens who have a high grade point average. 

    Another way to encourage teens to study: make them pay the difference between the premium rates if their grades drop. Some insurance companies will offer discounts to teens who volunteer or join civic and community organizations such as the Boy Scouts of America. 

    Insurance companies will often lower rates for parents who have children who are attending a college away from home, since they have less access to the car.c

    Raise Your Deductible

    A deductible is how much you will pay before your insurance covers the cost. A lower deductible equals higher premium costs. The higher the deductible, the lower your premium will be. 

    According to the Insurance Information Institute, raising your deductible from $200 to $500 can reduce your premium by 15 to 30 percent. Raising your deductible to $1000 will reduce your premium by up to 40 percent or more. However, if your car is over ten years old, the savings may not be significant.c

    Pay Your Premium Annually

    Most insurance carriers charge a fee to customers who pay their annual in installments or give a discount to customers who pay annually. This charge can be anywhere from $3 to $10 a month. 

    The less often you pay, the more you will save. This tip works well if you have a small premium. If you cannot pay annually, try to pay semi-annually. If you have a higher premium, you might save more if you invest your money elsewhere.c

    Improve Your Credit Rating

    It started with a 2004 study done by the Texas Department of Insurance that stated that people with the worst credit records were up to twice as likely to file a claim than people with the highest credit records. That one study was enough that more than 90 percent of auto insurance companies will use your credit information as a factor in determining your policy.c

    A bad credit rating can cost you up to 50 percent more on your premium. However, states are striking back. Several states have passed laws that have made this practice illegal on the basis that it discriminates against lower income families.c

    Don't Let Your Coverage Lapse

    Insurance companies will use lapses in coverage to disqualify you from discounts and as a reason to raise your premium. Try not to let your coverage lapse, even briefly, to avoid this. Furthermore, many car insurance companies will not insure a driver who is presently uninsured.c

    Ask for a No Claims Bonus

    A "no claims" bonus can save you up to 75 percent on your car insurance. A no claims bonus is a reduction on your premium for every year that you do not file a claim. Typically, no claims bonuses max out after five years.c

    Buy a Different Car

    The type of car you drive is going to affect your insurance premium. Car insurance companies place cars into groups. They also look at particular features of each car such as its age, body type, vehicle class, safety features and if it is a frequent target for car thieves. c

    When looking at purchasing a car, find out its safety record and how much on average the car costs to repair to help you determine how your insurance premium might be affected. You should also call your insurance company and get a quote before you purchase a car.c

    Reduce Coverage on Older Cars

    If you have an older car, you may want to lose collision and comprehensive insurance; you might end up paying more in insurance that the car is worth. 

    Here is how you can tell:
    1. Go to the Kelley Blue Book website and find out what your car is worth (or ask your local dealer).c
    2. Add up your comprehensive and collision premium. Multiply it by 10. If the second number is higher than the first number, you don't need collision and comprehensive insurance. The reasoning is that the average policyholder makes a claim once every ten years.c

    Maintain Your Car

    Although insurance agents won't ask you about your car's maintenance history, the reality is good maintenance will reduce your insurance costs. If your car breaks down, it could cause an accident and that would raise your insurance. 

    Also, make sure that you have a spare set of keys, plenty of gas and that your car is in good working order. This is a good way to prevent expensive charges such as towing fees and locksmith charges that you might submit to your insurance company.c

    Check Your Driving Record

    If you have had any transgressions with tickets in the past, get a copy of your driver's record and check it for errors. Court clerks can make mistakes and leave paid tickets on your record or list you as having a suspended license even when you do not.c

    References

    Cars, Money and You Course

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