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Five Ways to Lower Your Auto Insurance Premium

By Compuquotes Team on March 27th, 2008
Auto Insurance

Auto insurance premiums are one of the major expenses of keeping your car on the road, but there are ways to keep those premiums low. Everyone knows the standard ones - increase your deductibles, install a burglar alarm, add a vehicle recovery system. Here are some not so well-known ways that you can reduce your auto insurance premiums.

1. Pay your premium all at once.
It's not true of all insurance companies, but many charge monthly interest when you finance your insurance premium over the course of the year. By paying for your premium in full when you purchase your policy, you are saving the insurance company the cost of bookkeeping and sending out bills and notices. Another option along these same lines is to pay by direct debit to your bank account. Many insurance companies will discount your auto insurance by as much as 5% if you agree to a direct debit to pay your premium each month.

2. Take an advanced driving course.
As the evidence mounts that defensive driving lowers accident rates and aggressive driving causes accidents, many insurance companies offer lower premiums to those who complete defensive driving courses. If you have an under-21 driver on your policy, you can count on a lower premium if they complete driver education training, and possibly further reduction in your car insurance premium if they take a defensive driving course. Check with your insurance company for specifics.

3. Buy your auto insurance and home insurance from the same company.
Insurance companies reward loyalty with lower premiums. Shop around by all means, but do ask your current home insurance company if the offer automobile insurance, and if so, if you're get a discount for carrying more than one line of insurance products with them. The same holds true of life insurance.

4. Make sure you get all the discounts to which you are entitled.
Many national and local organizations negotiate discount deals with various insurance companies. AAA (American Automobile Association) members get a discount on auto insurance with many major insurers, as do AARP (American Association of Retired People) members. If you work for a large company, they may offer a similar plan, and many auto insurance companies also offer discounts to enlisted persons and their families. Do your homework, and you could save a lot on your auto insurance premiums.

5. Check your coverage annually and at major life events.
Things that happen in your life can have a major effect on your car insurance premiums. Just got married? Even if you and your new spouse previously shared insurance because you lived in the same household, check with your insurance company. Insurance rates for married people are lower than for singles. Moved? Insurance rates are often calculated on where you garage your car. If you've moved to a safer neighborhood, by all means call your agent to see if your premium can be lowered.

Be sure to also check in at major milestone ages. The big age change is 25 years old, but you'll also get lower insurance rates at 21, at 30 and at 40. In general, insurance companies figure that older drivers with more experience will be better drivers.

See average annual insurance rates for more than 2,000 vehicles

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