Six Ways to Save on Auto Insurance:

GOOD NEWS, DRIVERS:

Insurance premium hikes have hit the breaks. The Insurance Information Institute (III) estimates the 2007 average annual costs at $847, a 0.5% decrease from 2006 and the first decline since 1999. But just because prices aren't breaking the speed limit doesn't mean you should be complacent about costs. With a few relatively painless steps, you can probably find yourself a cheaper policy.

Here are six ways to save:

1. Shop Around
You've heard it before: When looking for a new policy, get at least three quotes. And if you really want to save, gather several more than that. According to a 2004 survey of more than 100,000 consumers across the country, conducted by Progressive Insurance, rates for comparable coverage can vary by more than $500 for six months' worth of coverage.

When shopping around, it's crucial that you understand the lay of the land. Broadly speaking, the auto-insurance world is divided into three camps. There are the direct writers (like GEICO and Amica), that use in-house employees to sell insurance directly to consumers via the Web or phone. Other insurers, like State Farm and Allstate Auto Insurance use captive or "exclusive" agents to sell their products. (These are independent contractors who work predominantly on commission and can sell the products of only one company.) Finally, there are the independent agents who sell the insurance of various different companies. These folks also earn their keep based on commission. (Click Here to find a local independent agent.) Need some extra cash to get a new car insurance policy? Get a fast and easy payday loan from EZCash-PaydayLoans.com. Their application process is fast and simple and 4 out of 5 applicants are approved for a payday loan.

Assuming you have a decent driving history, you should get the best deals from the direct agents, since they remove the middleman (who often receives a commission of 15%). But these folks can be picky. So if you've had recent entanglements with the law or another car's fender, your best bet is probably to check with the major providers, such as State Farm and Allstate (which hold 18% and 12% of the market, respectively), and then head to an independent agent to see if he or she can beat your best quote. You also can comparison shop by using our website. We operate as an independent lead generator for top rated insurance companies and agents.

One note of caution: Don't let your quest for a bargain lead you into the dark woods of substandard companies. Make sure you go with a company that has a good credit rating with a rating service such as Standard & Poor's or Moody's. You might also want to check with your state's department of insurance to see if a particular company has a high number of consumer complaints, says Sally McCarty, commissioner of the Indiana Department of Insurance. (Click here to find the Web site of your state's department.)

2. Get All Available Discounts
Discounts can vary widely by company as well as by state. Some to ask about are:

Combination Discounts
You can often knock off 10% to 20% from your premiums if you insure both your home and your car with the same company, or by insuring more than one car with the same company.

Defensive-Driving Classes
This can often merit a 10% discount on premiums.

Good-Student Discounts
Students with GPAs of 3.0 or higher can be eligible for discounts of as much as 25%. In some cases, young male drivers may benefit from this more, since their premiums are typically higher, says Dick Luedke, a State Farm spokesman.

Retirement Discounts
Be sure to let your insurer know when you retire — particularly if you retire at a relatively young age. Since you're likely to be driving less once you're working days are over, this can often earn you a break on premiums.

Association & Group Discounts
Discounts may be available for affiliation with all sorts of associations — your alma matter, a military group, a professional organization, even Mensa. If you work for a large employer, that could earn you a discount as well.

College-Kids-Who-Are-Far-Away Discounts
If at least 100 miles separate your kid from your car, you could save up to 40%.

Safety Discounts
This varies by state. In some states, including New York and Florida, drivers must be rewarded for having certain safety features on their car, such as antilock brakes, airbags and automatic seat belts. Certain antitheft devices could be eligible for a discount as well.

Loyalty Discounts
Stick with the same company for more than one year, and you could earn a break of 10% or more on your premiums.

3. Increase Your Deductible
Your deductible is the amount you'll pay out of pocket when making a claim before your insurance starts picking up the tab. It applies to your collision and comprehensive coverage (not your liability) and is the insurance that specifically covers your car. (For more on the different components of an auto-insurance policy, click here.)
Increasing your deductible can cut your premium dramatically. And since insurance is meant to cover the big stuff you can't handle comfortably on your own (not the small things), having a higher deductible can make a lot of sense. In general, increasing your deductible from, say, $200 to $500 could reduce your premium by 15% to 30%, according to the III. Raising it to $1,000 could save you 40% or more.

4. Drop Some Coverage
If you have an older car — one that's worth less than 10 times the amount you'd pay for coverage — you may want to consider dropping collision and comprehensive coverage altogether, according to the III. Collision and comprehensive can account for 40% or more of the cost of your premium, and covers only the car's replacement value. If any claim payment you'd receive wouldn't substantially exceed your premiums minus the deductible, then it's probably not worth it to get the insurance.

5. Clean Up Your Credit Report
Like it or not, your credit report can affect whether a company is willing to insure you — and at what rate. "Somebody who is extremely poor in their payment habits could pay 30% to 40% more than somebody without those problems," says independent agent John Costello, a partner at Costello Dreher Kaiser Insurance, based in Rochester, N.Y.

While credit-data usage varies by state, most insurers use something called an "insurance score" to assess your risk as a driver. The score is similar to a credit score, except that, generally speaking, an insurance score places a heavier weighting on bill-paying consistency than on the overall debt the person carries, says Jeffrey Skelton, assistant vice president of personal insurance at ChoicePoint, a company that calculates insurance scores.

Get your FREE credit score and more! at FreeCreditReport.com. Be sure to keep an eye out for any errors or omitted information that could negatively affect your score.

6. Get the Right Car
If you're in the market for a new car, keep in mind those with the highest theft rates and repair costs will cost more to insure. So if you're debating between two models, it may be worthwhile to give your insurance agent a call to see if there is a notable difference in the insurance costs. Alternatively, you can visit the Web sites of the insurance companies. Many of them, such as State Farm, list which cars are considered safer than average (thus qualifying for a discount) as well as those that have higher collision and theft rates.