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5 Best Ways to Lower Your Car Insurance Premium

Sick of paying high premiums for your car insurance? The average U.S. driver pays around $850 a year for their car insurance, but it doesn’t have to stay that high. While not every tactic will work for every driver, it’s possible to reduce the amount you are currently paying for car insurance premiums by applying one of the following tips.

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1. Pay a Higher Deductible
The more you are willing to pay for your deductible – the amount you cover in an accident before the insurance kicks in – the less you’ll pay up front. For safe drivers, this can be a good way to go, but it does mean that if something goes wrong, you’ll be liable for more of the damages, so consider carefully before making the decision. Save up to 40% just by switching from a deductible of $250 to $1,000.

2. Reduce Coverage
Do you really need the coverage you are currently paying for? Being selective can drastically change the amount you pay up front for insurance, and in many cases, drivers can eliminate certain parts of their coverage without any problem. For example, if you live in the desert, you probably don’t need flood coverage.

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3. Check for Discounts
Depending on the insurance company, you may be eligible for a discount, depending on how many years you have been driving, organizations you belong to, if you are a senior citizen, or even if you are female (women drivers tend to be safer). If you buy online auto insurance, you can sometimes receive a discount. Discounts may also be provided for those who have certain safety devices installed in their vehicles, so it is worth asking about. You might be surprised at what can be used to reduce your premiums.

4. Pick the Right Car
The vehicle you drive will also have a big effect on the amount of insurance you pay, so when purchasing a car, consider picking one that will give you lower rates. Check IIHS.org to find the safest vehicles, which are usually cheaper to insure.

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5. Improve Your Credit Score

Like many other things in life, your credit score has an impact on how your insurance company calculates your insurance. A poor score can indicate that you will have more claims than someone with a higher score, so taking steps to improve your credit score can actually change how much you end up paying for car insurance premiums. If your score changes drastically for the better, be sure to let your insurance company know before renewing your policy.

When it comes to car insurance, you don’t have to sit back and accept high premiums. Be active, and you can actually lower those costs and make car insurance far more affordable. Even if you can’t put all of the above tips to use, you should be able to use at least 1 or 2 of them to make a difference.

Sources:
[1] http://www.dailyfinance.com/2011/05/05/how-to-cut-your-car-insurance-costs/
[2] http://money.ca.msn.com/retirement/gordonpowers/article.aspx?cp-documentid=23855258
[3] http://www.mint.com/blog/how-to/save-on-car-insurance/
[4] http://www.iihs.org/research/

  

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