Save Money on Auto Insurance


Studies have shown that insurance is the second largest expense for most Americans. And the cost for insurance has continued to increase. There are ways to reduce this cost. One way is to save money on your auto insurance. Here are a few ways to save money on your auto insurance.

Change Where the Car is Garaged

The cost for auto insurance is based in part on where the car is garaged. Each state is divided into rating areas and different rates apply to each area. Areas with larger metropolitan cities — which have a higher number of insurance claims — have higher insurance rates. Thus, changing where the car is garaged can change the amount you pay for your auto insurance.

Get Married

The cost for auto insurance also accounts for marital status. Research has shown that young single males tend to get in more accidents than young married males, young single males are charged higher premiums. Thus, getting married may reduce the amount you pay for your auto insurance.

Change the Use of the Car

The cost of insurance is also computed based on how you use the car. There are several classifications of use, including farm, pleasure (i.e., under 3 miles to work each day), commuting to work (under 15 miles each day and over 15 miles each day), and business use. Farm and pleasure use have the lowest rating. Thus, modifying the use (or pointing out that you use your car less than determined by your insurance company) can reduce the amount you pay for car insurance.

Take Driver Education

The cost of auto insurance is, in part, based on your driving record. Thus, it may be possible to reduce the costs of your car insurance by taking driver education courses.

Go to School and Get Good Grades

The cost of auto insurance can also be reduced by good student discounts. These discounts are based on the idea that a good student is a better driver because they are more cautious, risk adverse, mature, etc. To qualify, the driver usually has to be a full time student in high school or college and either have a certain GPA, class rank, or be on the honor roll.

Buy a Second Car

The cost of auto insurance can also be reduced by adding a second car to your insurance policy. Insurance companies refer to this as a multicar discount. This is based on the notion that you will not be able to drive two cars as frequently as you would drive one.

Buy a Different Car

The cost of your auto insurance also factors in the make, model, and year of your car. Thus, you may be able to lower your auto insurance costs by buying a different car.

Carry Higher Deductibles

The cost of your auto insurance also depends on the amount of the deductible you carry for collision and other-than-collision coverage. The higher the deductible, the lower the cost of your auto insurance. Increasing the deductible from $250 to $500 can reduce the cost of your insurance by as much as 30 percent.

Drop Collision Insurance for Older Cars

Collision insurance pays for the cost to repair your vehicle. For older cars, the cost to repair the car will often be more than the cost of the vehicle. Because the insurance company will not pay more than the current fair market value of the car, this coverage may add little value if you have an older low-value car. In that case, you can reduce the amount of your auto insurance by dropping this this coverage.

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