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How to save money on auto insurance
In May 2008, gasoline prices in the United States are hovering close to $4 a gallon. While most consumers are focused on the increased cost of gasoline, another cost of automobile ownership is increasing: Auto insurance.
| Auto | Annual Premium | |
|---|
| Dodge Ram Pickup | $1336 |
| Ford Econoline Club Wagon | $1119 |
| Chevrolet Impala | $1091 |
| Ford Escape | $1022 |
| Toyota Prius | $1210 |
| Honda Accord | $1203 |
| Chevy Silverado-C/K pickup | $1280 |
Source: insure.com
Facts:
- Auto insurance prices increased 1.05% from January to March 2008, or about $8 - $9 on the average insurance bill.
- "The cost of auto insurance is on average increasing but at a very modest pace well below the pace of overall inflation," said Robert Hartwig, president of the Insurance Information Institute.
- Average annual US cost of insurance in 2005: $829
Tips for lower auto insurance cost:
| Deductible | Possible Savings on Insurance |
| $200 | $0 |
| $500 | 30% savings |
| $1000 | 40% savings |
- remove comprehensive coverage from any cars over 8 years old - insurance reimbursement for a catastrophic collision may be very low for these cars
- Get all the auto insurance discounts you may be entitled to
- good driver discount
- B or higher average good student driver discount
- 5-10% discount for defensive driving course
- low mileage discount if you do a lot of carpooling or public transit to work
- Check insurance prices before buying a new car
- Factors that influence insurance costs: repair costs, popularity with thieves, safety record for that model, location of residence
- "With insurance costs already being a substantial and becoming more expensive, getting insurance quotes should be part of a car-buying process, not an afterthought," says Sam Belden, consumer director for Insurance.com
- shop for a new policy before your current policy expires - 12% discount possible
- compare discounts available for combining insurance with the company you get homeowners or renters insurance from
- shop around - an independent insurance agent who represents many companies can be helpful in this regard
Other tips:
- don't drive without insurance - fines and penalties such as loss of license are very strict. If you get caught, to re-establish insurance you may have to get a high risk policy, or a special filing such as an SR-21 filing.
- be sure to have a new policy in place before cancelling old policy
- cancelling a policy near the end of its term may result in a very small refund because insurance companies consider a large part of the premium to be earned at the beginning of the policy
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