Auto Insurance Buying Tips

There are many factors that affect insurance premiums, only some of which you can control. Starting with the ones you can't, know that demographics count. Males pay more than females and the middle-aged pay less than the young or the old (ages 25 and 56 seem to be a significant landmarks). If you want to decrease your rates, it certainly helps to move to a better neighborhood (less theft and/or traffic congestion) or get married (only responsible people tie the knot, right?), but those endeavors come with their own costs.

So let's stick with what you can control. As far as choosing a car, dullness pays. The lowest rates go to the most innocuous vehicle types – minivans and low/mid-priced sedans – because of what they imply about their drivers: mild personalities make for mild risks. Another force at work is how much damage one vehicle can do to another, where battering ram-like trucks and SUVs do not fare well. These factors mostly impact liability, which, in 45 states, is the mandatory piece in the insurance equation. On the flip side, ultra-cheap lightweights like the Kia Rio don't have stellar rates either, for a related reason: they do a mediocre job of protecting you, the driver.

Another major point is the cost of the car, which should be self-explanatory. This impacts collision coverage, which covers repairs to your car. It also lowers another type of coverage called comprehensive, which basically covers your car in any loss that doesn't involve crashing. Another good way to lower comprehensive is to pick a car with a low theft rate. Put another way, drive a car that no one else wants. Case in point: a recent study found the Ford Taurus wagon and Saturn LS at the bottom of the theft list.

Choosing the type of vehicle is the easy part. Depending on how much digging you want to do, it might also be worth researching specific cars within a given class. One source found a Dodge Neon costing $478 more a year than a Saturn SL2 (both are compact sedans that cost a mere $15,000 when new) at the same provider, just to name an extreme example. Differences within a class are largely due to the cost to repair specific cars, which has a lot to do with how they were designed. Some models show more variation between different providers than others, though it could be awfully time-consuming to check every single car across every single provider.

Don't crash. As if you needed another reason not to, getting involved in a crash (even ones that aren't officially your fault, in some cases) is the most sure-fire way to inflate your premiums. The label of "high-risk driver" stains your record, typically for about three years.

Don't get tickets. Insurance companies look for any excuse to raise those premiums, of which tickets are the most common and reviled. Remember, this is the industry that gives radar detectors away for free so that cops can take down your speed. It shouldn't be hard to trace the motivation.

Don't over-drive. Risk increases with exposure and premiums increase with risk, so if you can, don't drive more miles per year than you have to. Don't get too caught up in this point, though; it's broken down by brackets of every few thousand miles, the impact isn't tremendous, and there isn't always a discount for driving below average.

Cover your kids under your policy. They'll save a bundle, as will you, thanks to the standard practice of giving discounts for insuring multiple cars on one policy. Try to not make those risk-prone minors the stated primary driver of any car – especially an expensive one.

Get a car packed with safety features like air bags, antilock brakes, traction control, and stability control. Front air bags have been the norm since the ‘90s, but side and curtain air bags have not, and they have been found to help more and more with each passing year. Some companies began retracting antilock brake discounts after research failed to illustrate any safety benefits through cold, hard statistics. But some still do (some states make them), and antilock brakes are worthwhile to have in any case. Stability control, meanwhile, just got a big publicity boost from a September 2004 study finding that it reduces fatal accidents by 30% in cars and 67% in SUVs.

Shop around for the best carrier. Many consumers stick with the same insurance company for life (probably out of laziness), but they could be missing out on hundreds per year. Once you've found an ideal match, however, try to stick around, because loyalty discounts eventually kick in.

Pay your bills. It might not seem fair, but at many companies, insurance premiums vary with credit scores. The thinking is that someone irresponsible with money would be irresponsible behind the wheel. This has aroused all sorts of controversy and backlash. Various accusations have been fired – of it being unfair, illogical, anti-consumer, or segregative – but until this is resolved, try to master your MasterCard.

Do your homework. Literally. This can give a much-needed discount for drivers who are stuck with the lowest incomes and the highest rates: students. Maintaining a 3.0 GPA is the common requirement, and maintaining is a must, since applicants will be prompted to send in annual proof of their good study habits.

Take a class. A certified driver training or defensive driving class can lower your rates.