There are a variety of factors that determine the cost of your car insurance premiums. Here are some tips to help you lower your insurance costs.

Look for Car Models with Lower Insurance Costs
Before you buy a new or used car, look into the costs for insuring it. Car insurance premiums are based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. High-end luxury cars and performance vehicles cost more to repair, maintain and insure than family sedans. The same applies to classic cars: the more expensive to buy, the more expensive to repair, maintain and insure.

To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).

Safety Makes a Difference
Keeping a safe, clean driving record can lower your rates. Choosing a car with additional safety equipment can mean discounts. Taking a driver training or accident prevention course may qualify you for lower premiums. Ask your agent for details.

Combine your Insurance Policies with One Company
Many insurance companies will give you a price break if you have more than one type of insurance with them. You can combine homeowners and auto insurance, and you may get a break for having multiple cars insured with the company. You may also have lower rates if you’re a long-time policy holder. It still pays to shop around, because you may save more money by combining policies from different companies compared with a multi-policy discount. Generally speaking, however, you will save money by combining your insurance with one company.

Request Higher Deductibles
A deductible is the out-of-pocket amount you will be required to cover in the event of a loss. The higher the deductible on your car insurance policy, the lower your premium.

Increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

Changes in Your Life?
Are you still insuring drivers who no longer live with you? Do you drive less for your job than you used to? Have you just gotten married, or graduated from college? Are you living in a different part of town? Is your teenaged driver getting good grades in school? All of these things affect how much you pay and could result in discounts.

Reduce Coverage on Older Cars
Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley’s Blue Book (www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

Maintain a Good Credit Record
Building and maintaining a solid credit history can reduce your insurance costs. Insurance companies are increasingly using credit scores to determine the cost of auto insurance coverage. Pay your bills on time, don’t obtain more credit than you need, and keep your balances as low as possible. Pay off your revolving credit accounts if at all possible, and close any accounts you’re not using. Check your credit record on a regular basis, and correct any errors promptly so that your credit records are accurate. You may want to subscribe to a service that periodically updates you on any changes or issues with your credit rating.

Save on insurance for teenage drivers

Getting a drivers license is one of the rites of passage for most teenagers in the United States, and insurance companies are well aware of the risks that these inexperienced drivers pose. For parents, adding a teenage son or daughter onto their insurance policies can be a big hit to the wallet. The Insurance Information Institute estimates that adding a young driver can increase rates by 50 to 100 percent. It may be tempting to just take away the keys, but before you do that, read on for some ways to keep younger drivers safe on the road, while reducing the costs for auto insurance.

Maintain a Clean Driving Record

One of the things that can cause insurance premiums to go through the roof is to have a DUI conviction. Driving while under the influence of alcohol can be extremely costly – in New Jersey, for instance, the total cost for one DUI for an underage drinker can run up to $24,000 (source: Municipal Alliance for the Prevention of Substance Abuse). This includes increased insurance premiums, legal fees, and other fines. A young person with no previous convictions who is convicted of a DUI could face insurance premiums raised to thousands of dollars for at least three years, according to David Snyder of the American Insurance Association.

In addition, simple steps like always using a seatbelt and driving close to the speed limit can greatly reduce the chances of having a moving violation on the record of a young driver.

Keep Your Grades Up

Many insurance companies offer discounts for students who maintain a 3.0 or B average and who are enrolled full time in high school, community college or university.

Taking a local accredited driver safety class may also lead to a discount, or help to remove points from a young driver’s license after an accident or violation. Check with the National Safety Council for information on where to take a driver safety course. They can also provide information regarding state certified programs that offer courses for point reduction, car insurance discounts, drivers education classes, or retraining.

There are many drivers education companies which offer comprehensive training that can provide courses in defensive driving. These can help to bring down premiums for auto insurance.

Be Involved in your Community

Some insurance companies offer discounts for young drivers who are a part of civic or community organizations, such as Scouting, or even for volunteering at a local hospital or nursing home. Insurance companies are looking for evidence that a young driver is less of a risk, and many are willing to reward those who have spent time bettering their community. When doing comparison shopping, ask to find companies that reward community involvement.

Choose Your Car Wisely

Driving the newest sportscar may be a dream of younger drivers, but it’s probably not the best way to minimize insurance costs. The type of car driven is a large factor in determining how much premiums will be.

Choosing a safer car can save up to 50 percent on auto insurance. SUVs, sports cars, expensive luxury cars, and high performance cars are considered to be higher risk by insurance companies, and you’re going to pay more to insure them.

While it may seem to be “uncool”, younger drivers may want to consider driving a less glamorous, but safer car. A Honda Civic or a Volvo will usually have lower insurance rates than a sports car. Older cars may not have airbags, and that will also raise rates. Consumer Reports also has some recommendations for young drivers, including the Toyota Camry LE and the Mazda3.

Benefits of Safety Features

Insurance rates are also often discounted for cars with added safety features, such as automatic seat belts and anti-lock breaks. Side-impact airbags may also help. Stability control features may also taken into account when insurance companies determine risk.

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