Saving money on auto insurance can go a long way

Millions of Americans pay a lot of money each month for their auto insurance coverage, and there are a number of factors that go into determining those costs. And while some of them may be obvious - like major accidents suffered in the last few years - others might not be. For instance, things like marital status, credit history, and other factors that are totally unrelated to driving can play as big a role, or bigger, in determining their premiums.

A recent study from Consumer Reports found that driving record actually counts for less than most people would ever guess, according to a report from USA Today. While these things can vary depending upon the state in which a person lives and how they've handled a lot of different aspects of their lives. For instance, a person in Florida who is unmarried and has a clean driving record but low credit score will pay about $1,552 per year more than a Floridian with the same marital status who has a drunk driving conviction on his or her record, but a good credit rating.

"No consumer would suspect their unpaid bills would have a greater impact than a DWI on how much they pay for car insurance,'' Margot Gilman, Consumer Reports money content development team leader, told the newspaper. "Our investigation shows they need to think again. We're putting consumers on alert that they need to shop around."

What else can be done?
Another major issue on this front is that more than 1 in 3 consumers who buy auto insurance coverage do almost no shopping around, the report said. By going to a few different insurers and asking for a quote, though, the average person may be able to save almost $400 per year. In addition, nearly half of all consumers say that they didn't know they were free to shop around for coverage, and even switch, before their previous agreement with another insurer was up. Usually, the discount for doing so will be in the range between 5 percent and 15 percent.

Taking the next step
For all these reasons, making sure credit standing is as it should be and shopping around for coverage is always a good idea, the report said. In addition, experts recommend that these checkups on their auto insurance situations at least once a year. In fact, those who are looking to switch should do so a few months in advance, so that there is no period - even of a few days - when they're going without coverage. Those who don't have auto insurance can find themselves in big trouble with the law if they get pulled over or get into an accident.

And when they are able to save money on their coverage, they might be wise to start putting those funds toward paying down outstanding debts or building up their emergency savings accounts. That will therefore help them to improve their overall financial position significantly in just a few short months.

Want to learn more?