With the rising cost of many things in the economy, it is no wonder why auto insurance premiums have increased over the years. The average annual cost of auto insurance premiums range around $900 per year. There are some small things you can do to reduce the amount of money you pay on auto insurance. Below are some great tips to help you get started:

First, pull your credit score. Many people are unaware that their credit score can influence the amount of money they are paying on auto insurance. As you begin shopping for auto insurance, you will be required to fill out a series of applications that will ask detailed information about you such as: personal information, work information, safety features of your vehicle, and how many drivers you would like to insure. After you fill out the application, they auto insurance company will ask you if they can pull your credit report to check your credit score.

When your credit report is pulled, the auto insurance company will review your credit rating and decide how much risk you will be to their company. If your score falls below 650, you will probably have a hard time finding auto insurance, or you may have to pay a higher insurance rate than others. The reason auto insurance companies check your credit rating is because they have found a correlation between credit and the likelihood that a client will file a claim. The higher your credit score is the better auto insurance rate you will receive.

Second, you always need to shop around when you are looking for ways to save money on auto insurance. A good rule of thumb to follow is to obtain auto insurance quotes from at least 3 different auto insurance providers before selecting one. Every auto insurance company has a different standard and the rates will vary for each company. Most auto insurance companies will provide you with a quote in a manner of minutes, while others may need a couple days to process your application. If you have been with a certain auto insurance company for a long period of time, they may be willing to offer you discounts, or reduce your rates. Inform them that you are shopping for new auto insurance and see what they are willing to do to help keep you as a customer.

Most auto insurance companies have rate change policies. When you are shopping for auto insurance, be sure to ask about rate change standards. Rate standards usually involve an increased rate for an auto accident, teen drivers, and traffic violations. If you are currently paying an auto insurance company who increased your rates, now is the perfect time to shop for new auto insurance. Many auto insurance companies are willing to offer a better deal than your current provider, especially if you are unhappy with your current provider.
Cheap auto insurance policies will provide you with the least amount of coverage and may not pay much if you are involved in an accident. Doing your research is the best advice anyone can give you when you are shopping for auto insurance. Keep in mind that auto insurance is not a contract. If you are unsatisfied with your auto insurance provider, you can cancel at any time. Some auto insurance companies have a cancellation fee, so ask about this before you buy into their plan.

Your age will play a factor in how much you spend on your auto insurance premium. They are typically higher for male drivers under age 25 and females under age 21. The reason for the higher premiums is because the statistics have shown that these are the age groups when most accidents occur. If you are an older driver, you are probably eligible for a discount, especially if you have an accident-free driving record and you are insuring more than 2 cars with the same insurance provider.

Third, ask for all available discounts. If you have been a customer of the auto insurance company for some time, you should be eligible for a discount. Discounts vary widely from state to state and from different auto insurance providers. Many auto insurance companies will offer a discount to anyone who insures their home and car with the same company. The savings are usually around 10-20% for doing so. Due to the increasing amount of auto accidents, many auto insurance companies are offering discounts to drivers who enroll in defensive-driving classes. The amount you can save by enrolling in a defensive driving course is usually around 10%.

You can also get discounts for retirement and for being a student. College students are usually charged larger auto insurance premium because they age range is in a "risk" category. However, high school students can get a discount on auto insurance for having good grades. Insurers will give a 10% to 25% discount to teenagers who maintain a B average or better because these kids are seen as a better future risk. Taking a drivers education course will also knock off 5% to 15% off the insurers' price. The longer your child is in a drivers Ed course, the better. A longer, slower teaching process is seen as a benefit to insurance companies.

The longer you are with an auto insurance company, the better for getting a lower rate. Many auto insurance companies will knock off 10% of your total insurance premium if you have been a good customer for at least one year. You can also pick up a discount for having safety features installed on your car. Daytime running lights, airbags, anti-theft devices, automatic seat belts, and antilock brakes will all give you a discount on your auto insurance policy.

Fourth, increase your auto insurance deductible. A higher deductible can reduce your premium by as much as 35%. The premium applies to your collision and comprehensive coverage and is specifically the amount of insurance that covers your car. Increasing your total deductible can significantly reduce your premium. An increase from a $200 to a $500 deductible can save you about 15%. Raising it even more will save you more money. Just be sure that you have enough money set aside to pay the deductible if you are involved in an auto accident.

Fifth, drop some coverage on your cars. Older cars really don't need to have full coverage insurance since they are usually considered "totaled" in an auto accident anyhow. Consider dropping your coverage on an older car to liability coverage. Collision and comprehensive coverage account for 40% of the total cost of your insurance premium and cover only the replacement value of your car.

Sixth, purchase the right car. When you are in the market for a new car, you need to purchase one that has all the right features for you and the auto insurance company. The cars that are higher on the theft rating will be more expensive to insure. Some cars are known for having repair issues, so be sure to do some research on the car before you buy it to determine if it falls into either category. If you are debating between two different cars, give your auto insurance company a call to discuss the auto insurance premium rates on both vehicles. Many auto insurance companies will list information about popular vehicles and tell you which ones are considered safe and qualify for a discount. You should also be able to find a listing of cars that have higher collision ratings and theft ratings. Search for a car that has passive-restrain systems like airbags, antitheft devices, ignition locks, and child-safety features. These added features to your car have been shown to reduce the severity of injuries in auto accidents and they can prevent your car from being stolen. This will reduce the amount of money you spend on auto insurance.

Seventh, reduce the amount of mileage you drive your car. Many auto insurance companies will provide cheaper rates for cars that are driven less. If you have reported that you drive around 20,000 miles a year, you will pay more than someone who drives around 12,000 miles. Instead of using your car for close errands, walk or use the city transportation systems. The savings may not be dramatic, but enough to merit the time you will spend walking instead of driving.

Lastly, drop any drivers from your auto insurance policy that reach the age of 18. When your child is considered a legal adult, you need to drop them from your plan and let them find their own auto insurance. This will reduce your auto insurance premium by about 10% or more. If the driver is prone to accidents or traffic violations, you can save even more. You can keep your college-aged student on your auto insurance plan, but separate them from your car by 100 miles, doing this can reduce the total amount you spend on your auto insurance premium by 40%.

Being a safe, responsible driver is one of the best practices you can do to reduce the total amount of money you spend on your auto insurance.