August 5, 2011

Three Ways To Cut Down Your Auto Insurance Costs

Auto insurance rates are fairly low, but even so, they're a major expense for most households. In states like New Jersey, drivers can easily spend over $1,000 per year on car insurance, and rates are much higher for drivers who have a few traffic incidents or claims on their records. Fortunately, there are quite a few ways to keep auto insurance costs down, and by taking a few simple steps, most drivers can save a tremendous amount of money on their insurance bills.

One of the best ways to see a fast decrease in auto insurance rates is to look for insurance discount programs. Discount programs are given to drivers who display a lower-than-average risk of presenting a car insurance claim. As hundreds of factors are taken into account when pricing auto insurance rates, most drivers qualify for at least one discount. Common examples of auto insurance discount programs include discounts for homeowners, married couples and good students. There are also additional opt-in programs that can yield discounts. Drivers can take safe driving courses for a discount of up to 20%, depending on the insurer. Some states also allow loyalty discounts, in which an insurance provider lowers the cost of a policy for a driver who stays with the insurer for a certain length of time. In states where this type of discount is illegal, there are usually discounts for drivers who keep an insurance record without any lapses in coverage. Other discount programs vary, but drivers can look into these programs by contacting their insurance providers.

Looking into various ways to pay a policy's auto insurance costs is another great way to get lower premiums. Many drivers can save a significant amount by switching to an "in full" payment policy, in which payments are processed on a six-month or annual basis rather than month-to-month. While in full payment policies can be difficult to budget, they're well worth the hassle: a six month payment can reduce the cost of car insurance by a significant percentage. Some insurance companies also charge drivers less for paying with a checking account, as the insurance providers make less money through credit or debit card payments.

Finally, drivers can get auto insurance rates by looking at a few quotes before making a purchase. Car insurance companies use different methods to price their customers' policies, so there's no single company that offers the best rates for every driver. By looking at quotes and negotiating for the best possible coverage every six to eight months, drivers can keep their auto insurance costs low. This allows for an easier-to-budget insurance agreement, especially when combined with the right payment and discount programs.