Five Tips for Lowering Your Auto Insurance Premium

Posted on Dec 16th 2009, 07:15 pm, under Improve Your Auto Insurance Rate

When you're shopping around for auto insurance, the premium cost is probably one of your key considerations. You may feel that the first price you see is a take-it-or-leave-it offer, but you'd be wrong. In fact, there are many things you can do to lower your auto insurance premium. Read on and find out:

1. Pay in cash up front.

If you've got the funds for it, you might find it better to pay for a full year of insurance up front instead of opting for a monthly payment scheme. You'll save more money in the long run, and on top of this, many insurance firms offer discounts for up-front payment. Even if you decide to switch insurance providers later on, you don't need to worry, because all insurers are required to pro-rate your bill and refund you for the time you aren't covered by their policy.

2. Drive carefully.

How well you drive is still one of the most important factors that insurance providers consider. Most companies look back at least three years, while some go back five or more. They'll check your records of major traffic violations and whether you've been in an accident. Any significant blemishes on your record could seriously raise your premium.

3. Drive less.

The less time you spend on the road, the lesser your chances of getting into an accident, and that's just how insurance providers want it. If you've moved closer to your place of work, or if you cut down on your mileage through other ways, ask your insurance company if you can get a discount. Some firms have programs that let you pay by the mile; if you don't drive a lot, you may want to look into this, since it could potentially save you a lot of money.

4. Buy multiple policies from one insurer.

If you've got several assets that need insurance, then it's best to buy coverage from a single company. Almost every insurance company offers big discounts to customers who buy multiple policies, whether it's auto, home, or life insurance. When comparing insurance quotes, you may find that some companies with high single-policy premiums are better deals over-all when it comes to multiple coverage.

5. Increase your deductible.

You might be able to reduce your total premium by up to 25 percent if you take out a bigger deductible. If you don't have comprehensive or collision coverage, or if you own an older, lower-value car, then taking out a large deductible might be the smart thing to do. Read more on how to pick the right deductible level for your budget here.

Next week, we'll have even more tips for you on how to lower your premium, so be sure to come back to check them out.