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1. Don’t have an accident
Maybe this goes without saying but the most important thing you can do to keep the cost of your auto insurance low is not have an accident that’s your fault. Auto insurance companies determine your premium by “rating” you according to several different groupings, including age, marital status, where you live, your driving record and … whether or not you’ve ever caused an accident. If you have an accident this moves you from the “accident free” group to the “at-fault accident” group, which may cause your premium to spike.
2. Watch your driving
Try really hard to not have any driving violations, especially speeding. Insurance companies see speeding tickets as red flag that you might be an irresponsible driver and calculate your premium accordingly. Here’s a real-life example of how this works. I recently asked one of America’s largest insurers to give me a quote on our auto/homeowners policies as our current insurer had just raised our premium considerably. When I hadn’t heard from the other company for a week I called to see about the quote I had requested. “We can’t do better than your current company,” I was told, “because of your wife’s two speeding tickets last year.” Ouch.
3. Get comparison quotes before you renew
Auto insurance companies have to compete just like fast food restaurants. Get comparison quotes from several different insurers. You may find that one of more will give you a great “introductory” price just to get you as a customer. It’s easy to get competitive quotes these days thanks to the Internet. You could go to a site such as wwe.esurance.com, fill out one form and get quotes from as many as six different companies. Just understand that what you’ll get are quotes and not firm prices. As a next step, you’ll need to narrow down your choices to one or two and then ask for firm prices.
4. Ask about discounts
Insurance companies give discounts for lots of different things besides just safe driving. Fir example, you could earn a discount by ensuring multiple cars with the same company or by ensuring both your car in your home. You could earn a discount by taking a defensive driving course or by being a good student. There are also military discounts and discounts if you set up automatic payments. Be sure to talk with your insurance agent or company to make sure you're getting all of the discounts to which your eligible.
5. Think before you buy a car
One of the best ways to keep the cost of your auto insurance low is to think carefully before buying a car. You can save a lot just by choosing a car that has a top safety rating. You can also keep the cost of your insurance reasonable by choosing a small, lower-cost car, rather than a huge SUV. Older cars are usually cheaper to insure than new cars so you might want to buy a used car instead of a brand-new 2013 model. It's a good idea to talk with your insurance agent or company before buying a new car to find what would be the exact rates for the different vehicles you're considering.
6. Take mass transit
Another factor that the insurance companies take into consideration in rating you is how many miles you drive a year. You'll pay more if you use your car to commute to work every day. If you could use mass transit so that you’d be racking up fewer miles, you might be able to save money. However, it’s usually necessary for you to decrease your mileage dramatically before you earn a discount. You might ask your insurance agent or company about its different mileage levels so you could see what might make sense for you.