NextPath

No matter what you’re buying, it’s always a good idea to start by shopping around. Insurance.com lets you compare rates on car insurance policies, as well as on life, health, and home insurance policies.

But don’t assume you’re stuck with published rates. Things like a car alarm, automatic payments, or even your college degree could entitle you to savings you don’t even know about.

Call your insurance company, and quiz them on these money-saving incentives. If they don’t offer these discounts, call around and see if you can find another company that does.

1. Student- and job-related discounts.

   Your GPA, college degree, or type of work could qualify you for a break on your car insurance. For example, 21st Century Insurance takes 10–30% off its base rate for drivers with a biochemistry, math, or mechanical engineering degree. Horace Mann Insurance gives discounts to teachers who belong to state educational associations or the National Education Association.

2. Vehicle discounts.

   Having a car that doesn’t appeal to car thieves or that has a better-than-average safety record could save you a couple hundred dollars a year. Check Consumer Reports to see where your car falls in the safety ratings. If your car scores well, call your insurance company and make sure you’re getting credit for that rating.

3. Safety equipment discounts.

   Many auto insurers grant discounts for safety features like a car alarm, rear or side airbags, and anti-lock brakes, or for belonging to a roadside assistance program like that offered through AAA. Before you start shelling out to add anti-theft or safety options to your car, though, make sure the additional expense is worth it to you. Check with your insurance carrier to see which features will save you money and how much.

4. Keep your driving record clean.

   Just a single ticket or accident could double or even triple your insurance premiums. Most insurance companies look at the past three years of your driving history. Go over your driving record with your insurer and make sure there aren’t any mistakes or dismissed citations that could be raising your rates.

5. Get all your insurance in one place.

   If your car insurer offers any other types of insurance, like health, homeowner’s, or renter’s policies, you may be able to get a multiple policy discount when you transfer all your insurance policies to a single carrier. If you have more than one car, you may also be able to get a multiple-vehicle discount by insuring all your cars with the same company.

6. Pay in one lump sum.

   Many insurance carriers will charge a monthly “convenience” fee for insurance premiums that are paid in monthly installments. If you have the cash on-hand and can pay your quarterly or six-month premium in one lump sum, you could end up paying less than if you were getting billed each month.

7. Set up automatic payments.

   If you can’t pay six months’ premium all at once, many companies now offer a discount for automatic monthly payments. Set up your monthly insurance payment to come straight out of your checking or savings account or to get charged to your credit card, and you could knock a few dollars off your payment each month.

8. Increase your deductible.

   Whether or not you want to raise your deductible really comes down to this: Would you rather pay more each month for the peace of mind of not having to fork over a huge amount all at once if you get into an accident?
   
   If you were to raise your deductible from $250 to $1,000, you could cut 30–50% off your monthly premium. But if you get in an accident, you’ll have to come up with $1,000 out of pocket instead of just $250.
   
   Be careful with this option. Raising your deductible may be right for you only if (1) you have the funds saved to cover the higher deductible, and (2) the money you’d save each month in a lower premium would make up for what you’d have to cover in a higher deductible.