Saving Money on Auto Insurance

In times of economic crunch, we all look for ways to save money, whether it's by curbing our shopping habits, or just making sure we have the most affordable auto insurance available. While changing insurance companies to take advantage of new-client specials is one way to knock down that premium, there are other methods of lowering your monthly insurance bill, as well. Here are a few:

Bundle Up: Whether you own or rent your home, you can save money by bundling your homeowners or renters policies with your auto policy, under the same insurance company. In fact, most companies discount both policies a little bit, rather than only giving you a discount on one or the other. As well, while those new-client deals at other insurers may seem attractive, they may not entirely offset the hassle of moving your policies around. Instead, ask your existing insurer about loyalty discounts – they're often available for customers who've stuck around for as few as two years.

Be Good: Good drivers and good students both qualify for discounts from many insurers. For the former, you need a clean driving record going back three years; for the latter a B average or better, and/or presence on the honor roll or Dean's list at your school. Parents of teen drivers take note: if your child is on your policy, their grades count toward this discount until they reach the age of 25 or are no longer full-time students, whichever comes first. Want to maximize your discount? Consider taking a defensive driving class. Doing so often nets you a significant (up to 10%) discount that lasts up to three years. Parents and students can take such classes together, and better yet, when those three years are up, you can repeat the course to reinstate the discount.

Be Safe: Even small safety measures, like parking your car in a locked garage instead of leaving it in the driveway, can help reduce your premium in some cases, but for significant savings, make sure that your vehicle is equipped with an anti-theft device. These include tracking devices, like LoJack, audio alarm systems, and less passive measures, like engine immobilizers. Just make sure that any aftermarket safety equipment is approved by your insurance company before you install it. Safety devices like airbags, and certain kinds of seatbelts that make driving your car less risky, may help you save money as well.

Raise that Deductible:  If you have a solid driving record, as well as enough money in savings to offset a higher deductible should you be in an accident, you can lower your premium by raising the amount you pay out of pocket. Think of the deductible as the equivalent of a medical co-payment. The more you pay up front, the less you're billed later.

Join a Club: Members of auto enthusiast's groups, job-related unions, and professional organizations often have access to discounts from affiliated insurance companies, and even some owners clubs are offering deals now, too. Ask around, and check with your benefits coordinator at work.

The five things listed above are just some of the many ways you can save money on auto insurance. When you're shopping for a new policy, or re-negotiating an existing one, remember to ask if there are any discounts you don’t already have. You may be able to save money because of your age, job title, or zip code, as well as the age of your car.

We all need auto insurance, but we need to watch our finances as well. By being a savvy shopper, you can save money without sacrificing coverage.