Car insurance ^[2] rates have risen dramatically in the past few decades and there are several reasons why:

• Society is “sue happy” and insurers feel the brunt of it
• People are ditching their car insurance ^[2] for financial reasons (a scary trend ^[3])
• Cars are more expensive to repair and replace
• Insurers have experienced high levels of losses in recent years

The reasons your car insurance ^[2] is higher really don’t matter. What DOES matter is learning ways to reduce your car insurance ^[2] premiums. Here’s how to do that:

1. Don’t drive

That’s right, one of the best ways to reduce your auto insurance premium is to use more mass transit. If it’s available, make certain your insurance agent knows that you drive less and that you want your premium rate to reflect that.

2. Shop around

If you’ve recently renewed your policy and the annual premium went gone up dramatically, shop around for a new insurer. The best first step is to use a company like InsureMe.com ^[4] and possibly save a significant amount of money. Use that site every year or two since they shop your rate with top companies like Liberty Mutual, Nationwide, Progressive, Allstate, and esurance (among others). One company is always cheaper than another from year to year.

Click HERE to find out what your new car insurance rate could be ^[4]!

3. Take a defensive driving course

Sometimes insurance companies will provide a discount customers who complete an approved defensive driving course.

4. Ask for discounts

Another aspect of shopping around is to ask for discounts. Sometimes simply asking can score you some big-time savings! Ask about discounts for :

• Your occupation
• Multiple vehicles insured with the same company
• Multiple insurance lines with the same company
• New vehicle safety features
• Senior citizens
• New parents
• Those who have been accident free for multiple years
• Alternative fuel vehicles
• Anti-theft devices installed on the vehicle (including On-Star)
• Taking defensive driving courses
• Low annual mileage driven
• Not driving after midnight
• Having no traffic citations
• Good students

5. Choose a policy with a high deductible ($1,500 and up).

I’ve seen a statistic that the average car accident is minor and costs less than $1,200. Insurers are willing to charge a much smaller premium to avoid the hassle of a $1,000 fender-bender. If you’ve built your emergency fund ^[5] properly, a $1,500 deductible won’t ruin your bank account ^[6]!

6. Maintain a clean driving record.

Lay off the lead foot! Use your cruise control when on the highway (set for the speed limit) and pay attention to traffic signs and signals. I tell my 16 year old — “Do what you know is right” and you won’t have to worry with getting pulled over.

7. Improve your credit score

A driver’s record is obviously a big factor in determining auto insurance costs. After all, it makes sense that a driver who has been in lots of accidents could cost the insurance company lots of money. However, folks are sometimes surprised to find that insurance companies may also consider their credit score ^[7]  when determining insurance premiums.

8. Lower your coverage on older cars.

Drop collision and/or comprehensive coverage on older cars that are worth less than ten times the premium –  these cars aren’t worth the cost of that type of coverage.

9. Buy a used vehicle with safety features, such as airbags or anti-lock brakes.

Remember that not only is your likelihood of filing a claim an important consideration, but also how large your claim might be. Buying a car with safety features no only protects you and your loved ones in case of an accident, but also protects the insurance company from higher claims.

10. Insure more than one car or driver

If you obtain a quote from a car insurance ^[2] company to insure a single vehicle, you might end up getting a higher quote per vehicle than if you asked about insuring several drivers and/or vehicles with that company. Insurance companies will offer a bulk rate for more of your business because they want (and need) your insurance premium, and under some circumstances, they are willing to give you a deal if it means you’ll bring in more of it. You may be able to bundle your life insurance ^[8] or homeowners insurance ^[9] as well.

Cutting your premiums is easy

As long as you’re willing to put in a little effort you can easily reduce your car insurance ^[2] premiums … so get to it!

About the author

Ron has written 1082 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[10] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

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