Manageable Means to Reduce the Cost of Auto Insurance

Posted by peter88 from the Automotive category at 05 Aug 2011 01:23:36 pm.

Among the numerous costs that come with owning or leasing a vehicle, auto insurance is one that motorists almost universally feel is too expensive. Such consumer concern is one reason for the bevy of auto insurance advertisements on television, with each insurance company seemingly offering lower and lower rates than the competitor whose ad ran two advertisements before.

While it certainly helps to comparison shop when looking for auto insurance, there are several other steps motorists can take that might reduce the cost of auto insurance.

* Maintain good credit. Insurance providers will almost certainly pull an applicant's credit report before providing a policy quote. Many consumers might question how this is relevant, but insurance providers are fully aware that a host of studies have shown there is a direct correlation between a person's credit score and the likelihood that he or she will file a claim. The higher an applicant's credit rating, the less risky that applicant appears, which could translate to a lower rate.

Another reason insurers will examine an applicant's credit history is to know whether or not the applicant will pay on time. Like any business, an insurance company wants to get its money on time, and is likely to offer a lower rate to applicants who have a history of paying bills on time.

* Carefully consider your choice of vehicle. Insurance companies rate vehicles based on make and model. This rating system is comprised of a host of factors, including vehicle cost, safety ratings and history of theft. The Insurance Services Office devised the system, and the higher a vehicle's score is, the higher drivers will pay to insure that car. While the results of the rating system are not public knowledge, drivers can research which cars are most often stolen and which are typically among the most costly to insure. If auto insurance savings are a big enough priority, avoid any vehicles that turn up during that research.

* Drive safely. Nothing is more effective at lowering auto insurance costs than being a safe driver. A driver's first at-fault accident could increase his or her rate by as much as 40 percent, a monumental increase for many motorists but one that can be avoided by simply being a better driver. Even if the rates don't increase by 40 percent, they're going to increase significantly should a driver be found at fault in an accident, so the best thing to do is to drive safely and defensively at all times. Should an accident occur and it's the driver's first accident, consult an insurance agent to see if the company has a forgiveness policy that forgives a driver's first accident. Otherwise one may have to pay the standard post-accident rate increase.

* Avoid installment plans. Installment plans might be necessary, but if they're not it's always best to pay premiums in full. A monthly installment plan often comes with installment fees, which might not seem significant each month but can add up over the course of a year. If installments are unavoidable, try paying in as few installments as possible. Most insurance companies allow for six-month, quarterly or monthly installments. The more frequent the installments, the more fees drivers can expect to pay. If paying in full isn't a possibility, at least try to pay in as few installments as possible to reduce the amount being spent on installment fees.
Auto insurance costs are rarely negotiable. But motorists can take several steps in advance of beginning a policy that can greatly reduce what they pay for their insurance each year.

Tags: auto insurance, motorists, auto insurance costs

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