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Low Cost Car Insurance

Written by Todd Clay. Posted in Research Last Updated: 12/01/2010

8 Proven Tips on Lowering Your Car Insurance Costs so you don’t have to take out a second mortgage.

How can you save money on your car insurance?

How can you save money on your car insurance?

Does low cost car insurance even exist?.  Just think about what you could buy every month if you didn’t have to shell out those auto insurance bucks.  A nice steak dinner or a new gadget – but instead your making your car insurance company rich off your premium checks.

Don’t worry.  There are several things you can do you lower your car insurance costs – to get cheaper car insurance.  We’ve put together 8 proven tips to lower your auto insurance costs.  Try them out.  Forget about the 15% GEICO says they’ll save you.  These tips could save you 50% or more on your car insurance costs… and I’m no caveman.

Tip #1: Shop Around

All kidding aside, GEICO could save you 15% on your car insurance costs.  But you’ll never know unless you ask.  If you haven’t shopped your policy in 12-18 months, then you’re probably paying too much.

According to our latest research, California drivers paid +257% more for a basic liability auto insurance policy from the most expensive company versus the cheapest car insurance company.  That’s 2½ times more for auto insurance!  Need I say more?  Shop around for a better rate, and lower your costs.  If you need several prices, get some quotes here.

Tip #2: Be A Safe Driver

Take it from someone with a ‘reckless driving’ hidden in his distant past – bad driving is expensive.  Add a couple of at-fault accidents to that record and you’re looking at a towering monthly car insurance bill.  Car insurance costs are directly related to the risk the auto insurance company takes when writing a policy. If you’re a bad driver, then the company is taking a bigger risk.

Slow down.  Watch those red lights.  Drive defensively.  If you clear up your driving record, and get incident-free for three years (no tickets & no at-fault accidents), you’ll see a substantial drop in your costs.

Tip #3: Raise Your Deductibles

A deductible is your portion of the car insurance.  The lower your deductible on comprehensive and collision coverage, the higher your auto insurance costs.  In other words, if you have a $50 deductible on collision coverage (which covers your car’s physical damage in case of an at-fault accident), then you’re probably paying too much.

If you have the savings to cover your deductible, then raise your comprehensive and collision coverage to $500 or $1000.  Ask your agent about the savings and you’ll be surprised on how this money-saver will help your auto insurance costs.

Tip #4: Drop Comp and Collision on Your 10-Year Old Car

This one is related to #3.  If you drop comprehensive and collision on your car insurance, then you’re taking responsibility for physical damage to your vehicle.

This one only works if you can afford to replace the vehicle and you’re not financing it.  Ten year old cars have usually depreciated enough where many people can afford to replace it if necessary. If you’re one of those people, then dropping comp and collision will lower your auto insurance costs significantly.

Tip #5: Clear Up Your Credit

Each car insurance company handles credit differently.  Many companies don’t check it once you’re with them.  However, almost all companies check your credit when you’re shopping for auto insurance.  If you have delinquencies, and other such issues on your credit report, try to fix them.  Clearing up your credit can have a significant impact on your costs.

Tip #6: Sell Your Sports Car

Alright, I know this doesn’t apply to everyone.  But if you’re strapped for cash and that Porsche payment is eating your lunch, you might want to consider selling it and buying a more affordable car.  Auto insurance costs will go down significantly depending on the car you’re insuring.  I’m not saying ‘buy a jalopy’, but you could sell your Viper to help your cash flow.  Plus, you’ll lower your car insurance costs in the process.

Tip #7: Review Your Policy with Your Car Insurance Company

If you’ve shopped your auto insurance policy recently, it’s still good to review your costs with your car insurance company.  Make sure you’re taking advantage of all the discounts available to you like: Multi-car discount, Multi-policy discount, Driver’s Education/Defensive Driving, and even, good driver discounts.

I’m not saying your insurer is pilfering you.  But they sometimes miss these discounts when signing up people for coverage.  Make sure you’re getting all the discounts coming to you when buying auto insurance.

Tip #8: Shop Your Car Insurance… Again?

I said it before, but it’s worth repeating.  There’s no easier way to get shave car insurance costs than to get several quotes.  Even if you ignore the other tips, don’t ignore this one.  No need to pay extra money for the same coverage.  Take the time and save some money.  Once again, get some quotes here.

Then have a steak dinner on me.
Can you think of anything else that can save others money?
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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He's worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook. Connect with Tood on Google+

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