Car insurance premiums can vary by hundreds of dollars, so anyone who hasn’t shopped around lately may be letting large sums of money go to waste. Since the Internet has made shopping for insurance both free and easy, consumers can recoup that hard-earned money with a little time and some online research know-how.

Cost vs. Service: More and more, auto insurance companies are using the Internet rather than traditional agents to distribute their products. The Internet method is generally cheaper, but both approaches have their merits. For some consumers, having a personal relationship with an agent who can explain the details of an auto insurance plan is worth the extra cost. Others would gladly sacrifice that relationship in exchange for a discount on their premium.

Online Shopping Comparison: Making an online shopping comparison is not only free, but it usually doesn’t carry the sense of personal obligation people often feel when talking to an agent. By getting four to six insurance quotes online, a shopper can quickly weigh a range of alternatives. Looking at competing rates is one way to save money on car insurance, but when getting those quotes, it’s important to pinpoint the major elements that could lead to a discount. These factors typically include characteristics of the individual, driving habits, vehicle specifications, and the policy itself.

Fast Facts: How to Find Discounts Consider each of these elements when seeking a discount on car insurance:

  • Personal characteristics. Individuals who belong to affinity groups such as the AARP or AAA may be eligible for special discounts. Good credit ratings can mean better rates, and some insurance companies even offer discounts for good students.
  • Driving habits. Low annual mileage, a good driving history, and living in a low-risk neighborhood all should contribute to lower premiums.
  • The vehicle. Obviously, more expensive cars tend to cost more to insure, but there are other factors as well. Some cars have higher incidents of accident or theft. Optional features such as safety or anti-theft devices can lower risk and thus reduce premiums.
  • The policy. The size of the deductible is a key element in determining a premium. Raising the deductible can often be a more cost-effective way to insure a car.

Finding the Right Policy: By periodically researching auto insurance rates, consumers can decide how much their relationship with their current agent is really worth. A price difference of a few dollars is unlikely to unseat an established connection, but when the differences start to run into the hundreds of dollars, it may be sensible to make a switch.

About the Author: Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.

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