How to Get the Most Affordable Insurance

With the unemployment rates striking new highs and the never-ending recession, proper budget management is imperative for most American households. We all want to get the best bang for the buck spent, and so is the case with auto insurance. This article will show you five tips to get the cheapest auto coverage.

1. Shop around

This is one of the key factors that will help you get the most affordable insurance policy. Don't listen to your friends, family or neighbor Bob who says that company X is the best. Don't listen to TV commercials either. There are many factors that an insurer takes into account when deciding how much to bill you, and no two drivers have the exact same profile. What has worked for neighbor Bob might be a lousy deal for you.

2. Enroll in defensive driving courses

Such classes are offered by your local DMV and usually listed on their website. Passing a defensive driving course will not only teach you how to be a better driver, but will also entitle you to a discount in the range of 10% of the retail value. Given that the mean cost of auto insurance in the United States is of around $2,000, this tip alone will save you a nice $200 a year.

3. Arrange for cheap payment methods

Mailing in a check one month after another may have been a good alternative back in the late nineties. However, most companies will charge you a nominal fee of $5.00 or $10.00 per processed check. It may not seem like a large amount, but it will pile up to quite a consistent value over the lifetime of a policy. Instead, bill the expenses on a credit or debit card or, better, use EFT payments. These alternatives are free, or very cheap.

4. Look for a group discount

A lot of companies have teamed up with some organizations and clubs and will offer their members a discount of a few percents. These can be golf clubs, college sororities, credit unions, but you can also get a cheaper rate just for holding a credit card issued by a certain institution. Make sure you ask for a list of organization affiliations -- you may be nicely surprised!

5. Monitor your credit rating

Keep your credit clean if you want cheap auto insurance. The original purpose of the credit scoring system was for banks and other financial institution to assess your abilities to pay back a loan. However, everybody queries the credit bureaus these days -- landlords, phone companies and, yes, insurance carriers too. A poor score shows lack of responsibility -- if you are unable to pay your bills on time, then you will probably miss insurance payments too. Also, from a statistical perspective, people with low FICO scores have a tendency to file claims more often.