Holding Down Auto Insurance Costs

Here's how you can save some money on car insurance.

Automobile insurance rates for identical coverage can vary significantly from company to company. If you are a good driver, with no accidents or tickets in the last three to five years, many insurance companies will offer you reduced rates for insurance coverage. And automobile insurers offer a wide array of discounts for a variety of reasons. For example, if you drive your car less than 10 thousand miles per year, you will pay less than someone who drives 20 thousand miles a year. If you live in a rural or suburban area, your rates are likely to be lower than if you live in the city where there's more traffic and higher theft and vandalism rates.

Young drivers usually pay more than older drivers for the same coverage. However, if your son or daughter has completed an approved driver training course, or maintains good grades (usually at least a B average) he or she could be eligible for a discount.

If your car is equipped with an airbag or motorized seatbelts, or if you've installed a car alarm or other anti-theft device, you may also be entitled to receive a discount. You could also get a reduced premium if you purchase your auto insurance from the same company that provides your homeowner, health or life insurance policy, or if you insure more than one car with the same company. Finally, you may want to consider raising your deductibles (the amount you pay out of your own pocket) as one way to lower your automobile insurance costs. For example, if you raise your collision deductible from $200 to $500, the cost of that coverage could drop 20 percent or more.

It's a good idea to check with your insurance agent from time to time to make sure you are receiving every discount you are entitled to, since many agents won't volunteer this information. Remember that insurance agents generally receive a percentage of the amount you pay for coverage as their commission, so getting you the cheapest coverage takes money out of the agent's pocket. As with other consumer purchases, it pays to shop around for the best deal possible, so don't hesitate to compare the cost of identical coverage from other insurers with that offered by your current insurance company.