If you own a car and drive it, having insurance is not really an option. In most states, you are required by law to have at least a minimum amount of liability coverage. There are things you can do, however, to cut your auto insurance costs. Some of these ideas may work for you and some not, depending on your circumstances.
- Shop Around. This is the #1 way to save money. A good time to comparison shop is when your current policy is about to be up for renewal, especially if you find that your premium has gone up. You could save several hundred dollars a year for the exact same coverage on the same car.
- Good-Student Discount. Students with GPAs of 3.0 or higher can be eligible for discounts of as much as 25%.
- Group Discounts. See if your employeer, military groups, or other professional associations offer discounts.
- Drop Some Coverage. If your car is worth less than 10 times the amount you'd pay for coverage — you may want to consider dropping collision and comprehensive coverage altogether. They can account for 40% or more of the cost of your premium, and covers only the car's replacement value. If any claim payment you'd receive wouldn't substantially exceed your premiums minus the deductible, then it's probably not worth it to get the insurance.
- Combination Discounts. You can often knock off 10% to 20% from your premiums if you insure both your home and your car with the same company, or by insuring more than one car with the same company.
- Keep an eye on your credit report. Your credit history is an important factor for most auto insurance companies. Many studies have shown a relationship between your credit history and the risk to an insurance company. Paying your bills on time and maintaining a good credit history will allow you to enjoy lower auto insurance rates.
- Install a car alarm. You might get a discount if your car has anti-lock brakes, automatic seat belts, airbags, or anti-theft devices such as car alarms. They reduce the chances of your car being stolen or vandalized.
Check out http://www.thrifty411.com/ for more on being thrifty and frugal.
