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Cheap auto insurance: tips on saving hard-earned dollars

If you want to drive your vehicle on a public road, the law says you should have a valid policy of insurance in place. This is the mandate everyone gets so upset about when talking about health insurance. For vehicles, it's like your utility bills. The premium payment requests come in on a regular basis and you have to pay. Because you are learning all about how to be frugal, you look for ways of saving money. Cheap auto insurance becomes a necessity. Here are some tips on how to keep more of your hard-earned dollars in your pocket.

1. Always buy a safe make and model

The insurance industry always offers cheap auto insurance rates to those who drive the vehicles with the safest accident records. If you are serious about saving money, buy a family car with a five star rating from the National Highway Traffic Safety Administration.

2. Be prepared to change insurers

Shopping around almost always finds cheap auto insurance rates but many people are reluctant to change companies. Get over it! If you want to save money, go where the rates are lowest.

3. Think about a higher deductible

Insurers like customers who are prepared to insure themselves by paying more of the actual claims out of their own pocket. The higher the deductible you agree to pay, the more generous the discount you will receive. But always ask yourself whether you could afford the cash payments should you be unlucky and have two claims close together. Remember you can often agree to pay up to $2,000 and receive about 15% discount.

4. Discontinue collision cover on older vehicles

Assuming there's no auto loan in place and your vehicle is worth less than $2,000, you should drop collision and drive on liability cover only. When you take into account the deductible you will have to pay and the loss of any salvage value should your vehicle be totaled, you will be paying more than your vehicle is worth.

5. Ask about a renewal discount

If you are serious about moving or think you will discontinue cover, ask your current insurer whether there's a discount or bonus if you choose to renew. Some insurers will reduce the annual premium to buy your loyalty.

6. Ask about bundling

If you place multiple vehicles with the same insurer or insure both your home and vehicles, you earn a discount. Ask insurers before you buy how much you can save.

Check your credit report

Insurers routinely check your credit score and if it's low, your rate will increase. You are entitled to a free copy of your credit history. Correcting all the mistakes increases your score and brings back cheap auto insurance.

8. Are you a good student?

If you are a full-time student and have a GPA of 3.0 or better, most insurers will offer you a discount. There are also discounts if you go through an approved defensive driving course.

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