Saving money on car insurance...

By switching to Geico? Hahaaa, maybe. But not the subject of this column.

Why are cars and everything related to them so confusing and painful to deal with? To wit:

1. Buying a car is usually a painful experience, unless you enjoy cutthroat negotiation where you rarely have the upperhand (especially if you get emotional about cars like me.)

2. Then you have to title a car, and get plates, inspections, and pay taxes on the car. I've always wondered why it can't be as simple as buying a TV. I don't have to title my TV.

3. Then the car depreciates quickly, especially if you bought new.

4. Then it breaks down. If you don't know anything about auto repair, you take the mechanic's word for it. I am positive I've been jacked around on an auto repair before. And if you're a woman, some mechanics will really take advantage of that.

5. Finally there's auto insurance - comprehensive this, collision that - one ticket and your rates go up. Insurance salesman are not a whole lot better to deal with than the car salesman you bought the car from - maybe a little better.


There are some ways to save on your auto insurance. Below are some tips:

1. Be a good driver. Bad drivers pay more. If you have an accident that's your fault, you can expect your rates to go up as much as 40%.

2. Don't let your friend drive your car. If he crashes your vehicle, you will have to file this through your insurance company, and your rates will go up. If your friend was uninsured, bad news... if he injures another driver, that driver can come after you for medical bills, etc.

3. Check for installment payment fees. Your insurance company may offer you the ability to pay for your insurance on a monthly, quarterly, or semi-annual basis. They can even withdraw the amount from your designated bank account via ACH. However, they may charge a fee for this, so check with your agent. I have my premium ACH'ed from my account monthly, which really helps for personal budgetary purposes. However, I do pay a fee. If you want to avoid such a fee, pay your annual premium up front.

4. You may not owe sales tax on a replacement vehicle. You will have to be proactive and ask your agent about this, but 28 states require insurance companies to pay the sales tax when you replace your totaled car. The states are Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Vermont, Washington, West Virginia and Wisconsin.

5. Wait to add your teenager to your insurance until he or she is licensed. You do not need to add a young driver to your policy until they are actually licensed to drive. Of course, until they are licensed, keep them from getting behind the wheel. (I am guilty of this, when I was 17, I took my 12 year old brother driving in the cemetary. He got alot of driving practice before he turned 16! My mom was taken aback at how good he was).

6. When switching insurance companies, be sure to officially cancel. You cannot cancel by simply ignoring the next invoice. They will cancel your coverage, but that non-payment will be a blemish on your credit record. Call your agent and provide the date and time you wish to cancel. They will often send you a form already filled out - sign, date, and send back.

7. You will pay less for auto insurance if you have good credit. Huh? What's the connection? This is quite controversial, but studies have shown a direct correlation between your credit score and your propensity to file a claim. If you sign up for auto insurance, there is a high likelihood that the insurance company will pull your credit report. They use it to create an "insurance-risk score," which is one factor in determining your rates. So, if you have a low credit score due to late payments or credit card arbitrage/Apporama/0% balance transfers, you may be paying more for your auto insurance.