4. SHOP AROUND

Car insurance premiums are affected by various factors:

  • Your age, sex, marital status (insurance for single folks is higher than for married ones), and where you live. Unless you know a really good surgeon or are willing to get married or move, there's not a whole lot you can do about these criteria.

  • The year, make, and model of your car. Driving a luxury, "classic" (a '76 Pinto doesn't count) or sports car-all favorites among auto thieves-will hike up your premium.

  • The intended use of the car (business, commuting, travel, or personal; insurance agents get annoyed when you say "driving") and the yearly mileage you expect to put on it. The less you drive your car, the less you'll be likely to have an accident, the less your insurance company will charge you to insure it.

  • Where you keep your car. If you park your car in a covered lot, your insurance will be lower than if you park it on the street. We recommend not calling behind the gravel pile in the yard a "garage," as insurance companies can refuse to pay your claims if they find that you have lied to them in any way.

  • Passive restraint. Safety features like automatic seatbelts and airbags make insurers happy, and when they're happy, they charge you less.

  • Car alarm. The louder and more obnoxious, the less you'll pay. Keep in mind that alarms that set themselves automatically offer a higher discount than those that must be physically turned on by the driver. Some companies offer discounts if you have "The Club."
And because we're so nice, we're going to offer you a few lesser-known "insider" tips that may help you save money:

  • Consolidate insurance policies. If you have health insurance, home insurance, and car insurance, chances are that if you buy them all from one company, they'll offer you a good deal.

  • If you're a teenager, successful completion of drivers' ed can save you 10% or more.

  • If you're over 65 or 70 (exact age depends on the state), successful completion of a defensive driving course could save you a bundle. In certain states, drivers of all ages are eligible for the defensive driving discount.

  • If you're a student, get good grades. Conscientious students make conscientious drivers (so the reasoning goes).

  • Maintain good credit. Insurance companies like proven responsibility.

  • If you commute to a metropolitan area, use public transportation. Less rush hour driving lowers your premium.

  • Maintain a good driving record. Many states "award" surcharge points for every moving violation. These points go into an algorithm most likely designed by those pesky actuaries that helps determine your premium.

  • Try to avoid filing claims. If you knock off a bumper or bend someone's fender, it's usually better to pay for these minor repairs than to involve your insurance company, which with the least provocation will deem you an unsafe driver and hike up your premium.