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How to Save Money on Car Insurance in 2017

You might be leaving discounts on the table

Shopping for shoes, a vacation, a new TV… they’re all much more fun than shopping for, well, car insurance. That’s why 60 to 70 percent of people don’t shop for the latter on a regular basis. Big mistake. Complicating matters, there are scores of car insurance companies, and if you’re not rate-shopping at least three (including your current provider) on an annual basis, you’re likely missing out, says Allie Feakins, head of analytics at Compare.com.

Cover The Basics

To determine the amount you’ll be shelling out, car insurance companies look at factors like your age, your gender and the age of your car (the older it is, the less it costs to insure). There are car insurance comparison tools online or ask your credit union or financial institution​.​

You should be doing this every year. If you find a better rate, call your current insurance company, tell them about it and ask if they can do better — it’s a great bargaining tool. One of the most important times to shop around is if you’re adding a student driver to your policy for the first time. According to research by Compare.com, the insurance premium can nearly double, even if you didn’t buy your student a car.

See If You’re Missing Any Discounts

Don’t leave money on the table — especially when it comes to insurance discounts. If you’re now commuting fewer miles than last year, perhaps because you’ve taken a job with a shorter commute, you’re likely eligible for a discount. If you’re 55 and over, taking a defensive driving course can often snag you a discount — check with your insurance provider — and going paperless might be able to save you a little, too. Finally, participating in your insurance provider’s telematics program could save you significant cash. Telematics monitors how you drive, similarly to how a Fitbit monitors your exercise level, and it typically comes in the form of a little device you plug into your car to track your driving behavior, looking for hard stops and other offenses. Just participating can sometimes net you a small discount, says Feakins, and those savings could go up to 10, 15 or 20 percent depending on the insurer, the program, and your driving.

Check For Discounts Based On Your Kids

There are other discounts on the table relating to your children. If you’re child is driving and keeping his her grades up, start with the “good student discount.” By sending in a copy of your kid’s report card, you might be able to save around 5 to 10 percent, says Feakins, based on her years of reviewing insurance filings. If your child recently went off to college, some insurance companies will give you a discount, maybe around 5 percent, because the child is less likely to drive your car.

Improve Your Credit And Shop Again

Many insurers look at your credit when determining the price you’ll pay — and it can have quite a bit of weight. In some cases, having bad credit can actually increase your rate more than causing an accident will. According to rates collected by NerdWallet for the state of New York, a “good” driver with a Geico policy might pay $1,056 per year, and a driver who caused an accident might pay $1,261, but a good driver with poor credit would likely be shelling out about $1,472 annually. At Travelers, the good driver rate is about $1,287, the accident-causing driver rate about $1,320, but rates for good drivers with bad credit can be almost double. Check your credit score online. And if it’s not where you want it to be, work on it and shop around again.

Jean Chatzky

Jean Chatzky