Can you save money on car insurance? Of course you can. Here are 18 frugal, money-saving tips.

Hot on the heels of our frugal home insurance tips, we look at the other major property insurance that most people have, car insurance.  You will recognize some of these tips, because some of them are similar to the home insurance tips.

But some are very different!  There are some that you can do right now, and others that are part of a longer-term planning strategy.

For instance, your vehicle makes a difference, your driving habits and your demographics all play into the price of auto insurance premiums.  Some of these are more easily adjusted than others.

Shop around

As with home insurance, it pays to shop around. This is the only way to know if you are getting the best deal, given your current vehicle and driving record.  Not all companies will charge the same, so shopping around can help you find a better deal.

But,as with home insurance, it is also important to compare quality and service, since you want the lowest price that does not compromise the level of service or the quality that you expect. You want to make sure that when there is a claim to make, they will respond quickly to your call and pay without too much stress, which could end up costing you more in health insurance.

It is easy to compare car insurance rates online, but you should not rely on just one single site to do so.  “Shop around” really does mean to “shop around”.

Move across town

If you live in the west end of town and commute to downtown, you will be driving into the sun in the morning and you will again be driving into the sun in the evening.  That means that you’ll be driving blind, especially in the spring and the fall, when the sun is lower on the horizon at commuter hours.  Driving blind leads to more accidents, therefore higher insurance rates.

You can probably get slightly better rates by living in the east end of town or in the south.  You won’t save enough to sell one house and buy another, but if a move is in your future, this is one more reason to look at properties on the south or east ends of town.

Move out to the country

Lower density means fewer crashes.  You’ll pay less in rural areas than in in urban areas.  The only catch is that you’ll have farther to commute and likely won’t have a transit option.  So this might not be the most effective insurance-premium-reduction strategy.

Commute by transit

Public transit not only saves you parking costs and vehicle maintenance costs, as well as lowering pollution, but it can also save you on insurance.  Most insurance companies offer a lower car insurance rate for people who don’t use their car for commuting.  That’s because those cars are on the road a lot less and have much less of a chance of crashing.  But your vehicle will still be there for you when you need the flexibility or carrying capacity that transit doesn’t offer.

Get your license early

It might be too late for you, but not for your children.  Young people pay more for car insurance, because they tend to crash more.  But new drivers also pay more because they don’t yet have a driving record.  Even if you don’t plan to drive for another five years, get your license right away.  The moment you have your license, the clock starts ticking.  By the time you buy your first car, you will have been a driver for five years.  Your rates will still be above average, due to your age, but they will be much lower than if you just got your license.

Drive carefully

This is the du-uh recommendation.  Your driving record is one of the most important factors in how much you will pay for auto insurance, so you want to keep it clean and avoid any moving violations – and offenses that could earn you demerit points.  In fact, it can also affect how much you pay for life insurance.  Among the things to be most watchful of are:

• Don’t drive while intoxicated.  If you’ve had any alcohol in the past 12 hours, let somebody else drive.
• Buckle up.
• Don’t text or talk on the cell phone.  By the way, just because “hands-free” is legal doesn’t make it safe.  Most of the danger of talking on the phone comes from the distraction – studies show that, “…there is no conclusive evidence to show that hands-free phoning is any safer than hand-held phoning, because of the cognitive distraction involved with both types of phones.” There’s more here. Get the picture?
• Don’t get into a crash – that is bound to rapidly increase your premiums.
• Don’t run red lights or stop signs
• Keep your driving speed close to the speed limit.
• Obey all the traffic signs.  Yes, they are talking to you.

This is just a sampling of safe driving tips.  I could write a good 10,000 words on the subject, but I won’t.  Just use your head and drive safely.

Take a defensive driving course

Ask your insurance company; some will offer a discount if you take a defensive driving course.  It might be worth the savings, and it could also save your life.

Buy a cheaper car

It costs the insurance company more to replace a Rolls Royce than a puddle-jumper if it is stolen or totaled in a crash, so the insurance premiums will be higher.

Buy a less desirable car

Honda won’t like me for saying this, but some cars just get stolen more than others.  These cars are more desirable to thieves for many reasons, often because their parts can easier be sold on the black market.  The Honda Accord and the Honda Civic top the list.  They are nice cars, but insurers have all the theft data, and they will charge more to insure the most frequently stolen cars. Unless you really want to pay more and you really want your car to be stolen, try to avoid these vehicles.

Etch the VIN on those most desirable parts

The VIN (vehicle identification number) is traceable, and renders parts undesirable.  Find out what parts of your vehicle are most desirable to thieves and etch the VIN on those parts. Make sure to tell your insurance company, as you might be eligible for a reduction in insurance.

Raise your deductible

This is the same tip as with home insurance.  Instead of having a $250 deductible, raise it to $500.  This means that in a crash, you will have to pay the first $500 rather than the first $250.  So it will actually cost you more.  However, that means it will cost the insurance company less, so they will lower your premiums…and over the long run, you will save more on lower premiums than you will pay if you ever have a crash.

Combine with home insurance and business insurance

As I mentioned when writing about home insurance, you can reduce insurance costs by combining home and auto insurance, and perhaps some other insurances, such as business and liability, under one umbrella.  Insurance companies really encourage this approach. The reasons I outlined in that post are as follows:

• They get more business from you when they get all your insurances.  So it is a powerful business growth incentive that is cheaper than marketing.
• They have less costs billing one customer for two insurances than billing two customers.
• You are less likely to switch insurance companies, if it means switching all your insurances.

So insurance companies have less admin costs, more revenue from the additional policies and a more stable customer base to bank on.  In return, they charge you less. It’s a good deal for everybody.

Reduce coverage on older vehicles

How much would you pay to repair a 15-year-old car.  Probably not much.  If the repair costs are more than $2000, chances are you will just buy a new one anyway.  So why pay the insurance premiums to repair that vehicle?  Reduce coverage on older vehicles to the minimum required by law.

Pay annually

As with home insurance, if you pay just once you will save the insurance company a whole lot of paperwork, and that might save you money, too.

Pay electronically

Speaking of paperwork, some insurance companies charge more for “paper” and less for electronic “paperwork”.  It pays to ask.

Make your car theft-free

Is there room in your garage for your car, or is it so filled with other…ahem, junk…that your car won’t fit?  Cars that are kept in the garage where it’s harder for thieves to access them or that have anti-theft systems often qualify for a slight discount.  It is worth asking.

Change your gender

Sorry, but this only works for men.  Men have a higher risk of crashes, so they pay higher premiums.  Becoming a female can lower your premiums.  Even more so than buying a new house in the east end of town, this is not something worth doing just for the insurance savings, right?

Ask for discounts

As for home insurance, ask for discounts.  Insurance agents and companies won’t necessarily just tell you.  Be very direct.  “What discounts can I qualify for?”

Now you know how to save money on both your home insurance and your auto insurance.  It’s worth being frugal, because if you save a couple hundred dollars a year on insurance premiums, which you hopefully will never need, that leaves you with a couple hundred dollars more to sponsor a hungry child, treat your sweetheart to a romantic dinner or two, or add to your collection of volcanic rocks from around the world.