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10 tips to help you get the best auto insurance rates

By Posted : 05/01/2009

1. Drive less and earn a discount

If you drive less than 7,500 miles per year, you may qualify for a low-mileage discount on your auto insurance. And, some car insurance companies offer a commuter discount if you use public transportation during the week.

2. Don't use your car for business purposes

Some insurance companies will add a "business use surcharge" or increase your car insurance premium as your annual mileage increases. But, if you must use your car for business, be sure to tell your company or agent, so that your daily business travel is covered.

3. Increase your deductible

You might reduce your annual auto insurance premium by as much as 10 to 15% if you increase your deductible from $250 to $500. But, remember that you'll be required to pay the larger deductible upfront if you have an accident.

4. Keep an eye on your credit report

Your credit history is one of many "risk factors" that most auto insurance companies evaluate when setting rates (in states where it's permissible by law). Paying your bills on time and maintaining a solid credit history will help keep your auto and home insurance rates lower.

5. Drive safely

You may be eligible for a price break on your car insurance policy if you have no accidents or traffic violations for a specified period (usually three years – but a few companies will look back five years). Even a single speeding ticket can increase your car insurance rates 5 to 10% depending on your state.

6. Buy a low-profile 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.

7. Move

If you live in a rural community with little crime and traffic congestion, your insurance 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. We love city life – but sadly it costs more for car insurance.

8. 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 get you to a slight auto insurance premium reduction.

9. Install safety or anti-theft devices

Car insurance companies offer a variety of discounts for 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 an insurance discount because they reduce the chances of your car being stolen or vandalized.

10. Look for discounts

You may receive a discount from your auto insurance company if you buy more than one type of insurance through that same company (e.g., auto and homeowners). A discount may also apply to your auto insurance if you insure multiple cars under the same policy or with the same company. In addition, you can earn money-saving discounts for taking a defensive driving course, being a AAA member or staying with the same auto insurance company for a number of years. These discounts vary by company.

10+ Shop around

OK, it might go without saying, but your current car insurance company might not be the best one for you in the future! We recommend researching your options 30 to 45 days before your current policy is set to renew, especially if you have not shopped recently. (Fact: Insurance.com customers reported annual auto insurance savings of $538 a year in April 2009. Your savings may vary.)

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