Auto Insurance

Many people will spend a lot of time researching buying a car, but give little or no thought to the insurance purchase that every driver, by law, must have.  There are significant differences in the cost for auto insurance and learning how to shop for it is important to get the highest quality service and best price.

Work on improving your credit rating.  If your credit rating is below 750, your insurance will cost more no matter what other factors are involved.
 

The type of car you purchase will greatly affect the cost of your premium.  Insure.com has a car insurance comparison tool that lets you research average premium costs for more than 3000 models of new cars.
 

Ask your current insurer for discounts.  Important ones to include are low mileage; good student discount for your teens; defensive driving courses; affinity discounts, such as belonging to certain professional organizations; and loyalty discounts for staying with the company for several years

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Once you know what your current insurer is offering, begin comparison shopping with other carriers to see if they can beat that price.  Be careful though, just because a company is cheaper does not mean you get good service when you need it.  Check out company ratings with services such as A.M. Best to find out if they are reputable.  You can also check with the state department of insurance for complaints.

Raising your deductible to $500 or even $1000 on collision and comprehensive can significantly reduce your premium.  Of course that increases your out-of-pocket liability somewhat, but if you are willing to forego the slight financial risk for consistent monthly savings, then you should do so.
 

Liability is one area I recommend not lowering. Even though state law might allow you a minimal amount of liability coverage, this is dangerous were you to be in an accident where you are at fault and could be sued.  Keep the highest possible.  You should, however, drop your collision and comprehensive if your car is worth $2000 or less.

Paying your premium yearly instead of monthly can save extra fees. At my seminars, I teach how to budget for auto insurance so you can pay it in one lump sum.