5 Easiest Ways to Lower Your Car Insurance Premium

auto insurance

Auto insurance is a major expense for American drivers. If you are a savvy car insurance shoppers, you probably already get a discount by buying your home, auto and liability coverage from the same insurance company.  Here are five additional things to consider if you want to pay less for your car insurance:

#1. Check Your FICO Score

Your credit rating, or FICO score, affects more than just your ability to get a loan and the interest rate you pay for the loan. Insurance companies may charge a lower premium if you have a high FICO score, too.

The insurance companies believe there is a connection between your ability to maintain your credit rating and the probability of your having an accident. If your credit score drops, you will likely see a higher rate when your policy renews.

Speaking of saving money, you can get your report for free!

#2. Avoid Traffic Violations

Accidents happen, but most traffic violations are avoidable. When you drive, obey local traffic laws.

Speeding, reckless driving and driving under the influence are the bigger offenses and all are within your control. Lesser violations can also affect your insurance costs. If you do get a ticket, pay it promptly to reduce the chances of it affecting your car insurance premiums.

#3. Buy Older Model Cars

If you are like most people, you want a new car, but you can reduce your costs by buying cars that are two to three years old. In addition to saving money on the car itself, your collision and comprehensive coverage will be lower because the cost of replacing an older model is lower than the cost of replacing a brand new car.

Most safety features available today, like airbags, traction control and anti-lock brakes are on almost all cars manufactured in the past five years. If you buy a car with less common features, like a car alarm or side impact air bags, make sure to tell your insurance agent. Even on older cars, safety features may also lower your insurance premium.

#4. Drive Less

Check your annual mileage each year before you renew your auto coverage. Insurance companies typically charge a lower premium if you drive less than an average driver.

You may have told the agent that you drive 18,000 miles a year when you bought the car but changed to a job with a shorter commute and now only drive 8,000 miles each year. Because your car spends more time in the driveway or garage, you are less likely to have a claim. Ask your agent what impact your mileage has on your rate.

#5. Drop unnecessary coverage

If your car is over five years old, you may want to consider dropping your comprehensive and collision insurance coverage. Check the book value of your car and compare it to the annual costs of maintaining your comprehensive and collision coverage. If you have sufficient savings, you might choose to self-insure the costs of replacing or repairing your car if it is damaged. In some cases, this can reduce your premium for auto insurance by more than 40 percent.

Finally, shop for coverage each year and compare your rate with other companies. You can get quotes from major insurance carriers on the Auto Insurance page above.

Paul PuckettPAUL E. PUCKETT, JR. is the author of Investiphobia: Overcome Your Deepest Investment Fears. Over the course of his career in financial services, Paul has been a
bank loan officer, private banker, trust officer, broker and continues to work as an investment advisor and insurance agent. He has contributed articles to numerous
blogs, is an experienced speaker and is available to answer your questions on any personal finance topic.

Paul is the Founder of the Whole Investor Network, Portfolio Manager for 1st Quadrant Asset Management, and host of the video podcast, Getting There. His focus
is helping investors and advisors eliminate fear from their investment decisions.