Buying a new or used car comes with more expenses than just the window
price. Auto insurance, required by law in many states, comes into
play as well. Obviously you want insurance coverage, but what kind?
The minimum required, or something a little meatier? If you're leasing,
you'll need the full coverage, right? And of course, you'll want the
best rate and a low down payment.
You may not realize it, but the insurance rates you pay can vary dramatically
depending on the insurance company, agent or broker you choose, the
coverage you request and the kind of car you drive. Listed below are
a number of things you can do right now to lower your insurance costs.
Different insurance companies and different brokers will offer different
prices for the same coverage. These prices can vary by hundreds of
dollars, so it pays to shop around. Ask people you know about what
coverage they have. Check the yellow pages or call your state insurance
department. You can also check consumer guides, insurance agents or
other companies. This will give you an idea of price ranges and tell
you which companies or agents offer the lowest prices. But don't just
shop for a good price. The provider you select should offer both fair
prices and excellent service. Quality customer service may cost a
bit more, but it will pay off. Talk to five or six insurers to get
a feeling for the quality of their service. Ask them what they would
do to lower your costs. Check the financial ratings of the companies
as well. Then, when you've narrowed the field to two or three, get
price quotes.
Deductibles represent the amount of money you pay before you make
a claim. By requesting higher deductibles on collision and comprehensive
coverage, you can lower your costs substantially. For example, increasing
your deductible from $200 to $500 could reduce your collision cost
by 15% to 30%.
It may not be cost-effective to have collision or comprehensive coverage
on cars worth less than $1000 because any claim you make would not
substantially exceed annual cost and deductible amounts. Auto dealers
and banks can tell you the worth of cars, as well as other online
sources.
If you have adequate health insurance, you may be paying for duplicate
medical coverage in your auto policy. In some states, eliminating
this coverage could lower your personal injury protection cost by
up to 40%.
Check into insurance costs before you buy a new or used car. Cars
that are expensive to repair or that are have a high theft rate have
much higher insurance costs. Also the type of car can carry higher
rates, such as sports cars and SUVs. To receive a Highway Loss Data
Chart, write to: Insurance Institute for Highway Safety
1005 North Glebe Road
Arlington, VA 22201
Making any modifications to your car may increase your rates, or make
you ineligible all together, depending on what you want covered. For
example, some insurance providers won't cover cars that are lowered
or raised. It may cost you more to insure a car with a high-end stereo
system, expensive rims or a car alarm. Review your options with your
broker before making modifications.
Costs tend to be lowest in rural communities and highest in center
cities where there is more traffic congestion.
Some companies offer discounts to motorists who drive fewer than a
predetermined number of miles a year. Telling the agent that you strictly
commute can help this.
You may be able to take advantage of discounts on some coverage's
if you have automatic seat belts and/or air bags.
Some insurers offer discounts for more than one car, no accidents
in three years, drivers over 50 years of age, driver training courses,
anti-theft devices, anti-lock brakes and good grades for students.
To keep track of your comparisons, make a chart. Make columns for
each agent you visit. Make a separate row for each of the following:
- $500 deductible
- $1,000 deductible
- More than 1 car
- No Accidents in 3 Years
- No Moving Violations in
3 Years
- Drivers over 50 Years
of Age
- Driver Training Course
- Anti-Theft Devices
- Low Annual Mileage
- Automatic Seat Belt
- Air Bag
- Anti-Lock Brakes
- Good Grades for Students
- Auto and Homeowners Coverage
with the Same Company
- College Students away
from Home without a Car
- Other Discounts
This will keep everything on one page and in order. It will also help
you determine which provider can offer you the best rates. |
