1) Buy only the amount of coverage that you actually need to legally insure your automobile.
Many of us tend to overpay for auto insurance because we tend to buy much more coverage than what we actually need. This usually happens because drivers tend to believe that an auto insurance policy is a better value if has more types of coverage. It turns out that the opposite is true. It’s actually a better deal to buy only the basics that will keep your car legally insured. Here’s why this true.

Most auto insurance policies are usually designed to cover three things:

1. The car’s replacement value if the car is damaged or stolen.
2. The risks of driving and keeping a car in a given area.
3. Providing accident coverage to people and property.

As a result, unless your car is a super high-profile vehicle, most people can get away with covering these three things in their insurance policies. If you remember this, you can save a lot of money on your auto insurance premiums.

2) Purchase your policy locally.
Many local insurance companies can provide better deals on auto insurance for two reasons. First, most local insurance companies understand the risks of insuring drivers in their areas better than most national insurance companies. This helps them lower their prices on auto insurance because they can tailor their policies to handle the risks of driving in an area more cheaply.

In addition, most local insurance companies tend to have lower overhead costs than national insurance companies. This also allows local insurance companies to lower their prices on auto insurance because their cost of doing business is lower.

3) Get several quotes before you purchase your policy.
Finding inexpensive auto insurance takes time because there are many options to choose from. As a result, get several quotes from an auto insurance broker that you trust. You can get these quotes locally from your local broker or from an online insurance broker.

When you do this, you will quickly notice how the quotes tend to widely vary in price. This leads to the next suggestion…

4) Look for an inexpensive auto insurance policy that combines both a great price and great coverage.
Many people use the price of an insurance policy as the only benchmark to compare policies. While the price of a policy is an important consideration, it should not be the only one to consider. Other things such as the quality of the coverage and the broker’s commitment to customer service should also be considered. These things add value to a policy that go beyond the price of the policy.

This is true because an inexpensive auto insurance policy that fails to deliver in an emergency is a far worse value than expensive policy that goes the extra mile to cover its holder. As a result, be sure to look for an inexpensive auto insurance policy that combines both a great price and great coverage to get the best value for your money.

5) Finally, you might also want to consider auto insurance policies with higher coverage deductibles.
Many inexpensive auto insurance policies feature higher deductibles that require policy holders to pay more money before the policy kicks in. If you don’t mind the risk of paying more money before the policy kicks in, you might want to consider these policies because they are up to 40% cheaper than a policy that has lower coverage deductibles.

It Pays To Be A Good Student

Car insurance premiums are higher for young and inexperienced drivers. Students who maintain a B average can receive a good student discount from most major insurers. In addition to the good student driver discount there are also discounts available for college or university graduates. By taking advantage of these discounts students can offset some of the costs associated with being a new driver.

Your Credit Counts

We all know the importance of having good credit. The benefits of managing your money well go beyond interest rates on credit cards. Insurance providers can and will view your credit score and base their rates on the information they find there. If you have good credit you will see better rates than those who have managed their finances poorly in the past.  I recommend using annualcreditreport.com to get a free copy of your credit report.

Customer Loyalty

There are certainly benefits to shopping around for the best policies, however there are also benefits to sticking with your current provider. Insurance companies look favorably on customers who remain loyal by offering lower rates. It’s also smart to bundle all your insurance policies with one provider whenever possible. If you have your auto and home owners insurance with the same company you will likely be rewarded with a discounted rate, usually called a multi-line discount (warning, but these discounts aren’t always the best deal!).  As an example, I saved 10% off both my homeowners and auto insurance policy by using Allstate for both policies.

Safety And Usage

Safe drivers are rewarded with lower insurance premiums. This makes sense considering drivers who do not get in accidents cost less for the insurance company to insure. Another factor that will reduce your insurance bill is the type of car you drive and how often. The lower your annual mileage, distance to work and safety features on your car will reduce how much you have to pay in premiums.

The best way to get a great deal on car insurance is to simply ask your insurance provider what discounts are available. Take advantage of those you qualify for and consider what you can change in order to qualify for the others. The money you save on car insurance can then be used elsewhere in your budget to achieve other financial goals.