Auto Insurance

Tips to reduce the insurance premium of your new or used car

Before buying a car, new or used one, check into the insurance costs. Premium of your car is calculated based on the total worth of the car, its safety record, cost involved in its repair and its possibility / ease of theft. When the car has in-built features to reduce these inherent risks, many insurers come forward voluntarily to offer some discounts in the premium.

Provision of air bags, anti-lock braking system, anti-theft devices are certain aspects that qualify for discounts. Certain types of cars are likely to be stolen more frequently than others and these “thieves’ favorites” are expensive in respect of premium. Insurance Institute for highway safety gives more information and will help you decide the right kind of car.

Bargain and get maximum deductibles from your insurance agent. Higher the deductibles lower the amount of money you pay before the insurance policy comes into effect.

If you happen to own an old or used car, consider dropping either collision or comprehensive coverage or both. It is futile to insure your old car worth less than 10 times the amount you would pay for comprehensive coverage.

Shop from the same insurance company for your multiple insurance needs. Many insurance companies are likely to offer you a discount if you purchase two or more kinds of insurance from them. For E.g. getting a home owner’s policy and auto insurance from the same firm will compel them to offer you a discount. More the number of vehicles, higher the discount offered. Long time customers get more benefit than a new comer.

Low mileage discounts : Insurance companies offer attractive discounts

for those who drive a lower than average number of miles per year. This is also applicable to carpoolers.

Group insurance : Group insurance is more advantageous when it comes to calculation of premium and hence look for offers through group plan from your employer, alumni association, professional organization or club.

Good credit : Maintain good credit and it has a bearing on what you pay for the insurance. The credit rating may vary from state to state and the drivers with long, stable credit records are likely to have fewer accidents than those with poor credit scores. But don’t loose your heart for your poor credit score because various internet services allow you to monitor your score and even provide tips on how to improve them.

Insurance companies offer discounts for drivers who have not had any accidents or moving violations for certain period or years.

Different insurers offer different discounts and when you do comparison shop, the following points have to be clarified.

They are $500 or $1000 deductibles, owning more than one car, no accidents or moving violations for the past 3-5 years, old age drivers (falling between 50 and 55 years of age), those having undergone driver training or defensive driver course, low annual mileage, car safety features like air bags, anti-lock braking system, day time running lights, holding multiple insurance policy from the same company, student drivers with good grades, college student away from home, long time customer or any other discount apart from the one discussed above.

Although not all the insurance companies may offer you all the discounts said above but the key to savings and in turn to success is arriving at the final price. So, don’t shy away from a company that offers few discounts but still may have a lower overall price.

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