Auto insurance is a deal between you and an insurance company that protects you from financial cost in should an accident or theft occur. It is only in times of need that you feel the requirement for and appreciate having good insurance. Good insurance shouldn’t cost an arm and a leg – not if you shop around and follow these below-mentioned auto insurance tips. Here are some useful tips on reducing auto insurance premiums.

1. Obtaining multiple quotes
Comparison shopping for quotes from multiple insurance companies is probably the best place to begin. Premiums vary by a lot, as surprising as it may sound. According to the Auto Insurance Study, quotes for the same policy ranged from a monthly premium of $504 to as much as $1,400.

2. Type of car you drive
Another factor which has a significant impact on car insurance premiums is the kind of car one drives. According to a study on the most and least expensive cars to insure, annual rates ranged from $3,800 (Mercedes S65 AMG convertible) to $1,110 (Honda Odyssey LX). So, the cost of car insurance needs to be determined according to the car you are looking to buy.

3. Combining policies
If one happens to have multiple insurance policies, then there exist two good reasons for combining them with one carrier. Firstly, it is an easy way for simplifying your finances, since working with one carrier is definitely easier than working with two. Secondly, one can qualify for a discount if they combine two policies.

4. Guarding credit
In most states, one of the factors for deciding and setting premiums are insurance carriers in one’s credit history. According to studies, there exists a correlation between the handling of finances and history of claims, and the premium amount difference can be significant. For instance, in Virginia, poor credit scores could result in drivers shelling out $1,500 more in annual premiums.

5. Claiming discounts
Auto insurance companies offer a host of discounts. Some common ones include discounts for safe driving, while there are some surprising discounts such as one for members of the United States Chess Federation. Some other auto-based discounts include those with SmartRide, a new vehicle (for a car less than five years old), combined insurances, and US Chess Federation members. One needs to contact their insurance agent/carrier to see if there are additional discounts they can obtain.

6. Pay by the mile
One of the most amazing potentials to save money on insurance premiums is to pay for insurance by the mile. Paying by the mile could end up reducing both the premiums you pay and the miles you drive as a factor in the cost of insurance.

7. Comparing prices annually
Simply obtaining a great rate on car insurance is not the end of it – it’s just the beginning. It makes a lot of sense (and cents) for insurance buyers to compare existing rates of insurance every year. It can even be done online and comparing rates won’t hurt one’s credit score.

8. Pay semi-annually
Making monthly installments might not save you as much money as you might save by paying every six months. Studies show that by paying the six-monthly payment in full, one could end up saving as much as more than 2% on their premiums.