Premium Performance

Your financial advisorGive your vehicle the coverage it deserves

check the Kelly Blue Book (www.kbb.com), available at most public libraries, or consult a car dealer or bank.

Keep it low-profile. Buying a new car? That shiny number out on the dealer’s lot might cost you more than you expect. That’s because insurers rate cars based on a number of factors, including the cost of the car, theft rate, cost to repair and safety record. Mid-size and larger family cars generally run you less, says Salvatore, but sometimes minor differences can cause a major jump in your rates. Think a Volvo is the safest thing on the road? Well, while a 45-year-old man living in Queens, New York, would spend $ 1,249 a year to insure a Ford Taurus, he’ll have to cough up $2,313 for a Volvo. “Some cars may be very safe, but they can be expensive to replace if stolen and costly to repair,” says Salvatore.

Ditch miscellaneous extras. You’ll be offered lots of extras, like rental car reimbursements and towing and labor insurance. Think twice. Though they may seem cheap, they don’t always add up. Rental reimbursement generally pays a low rate–$15 a day on average–far less than the cost of the car. The same goes for towing. If you don’t already belong to an automobile club that generally covers this, you’re going to find the insurer reimburses only a fraction of the cost–$25-$75–which you could probably afford to pay yourself. Our advice is to first find out how much your insurer will pay, then consider if you have these services covered elsewhere.

BE advises you ask what other discounts insurers give. It varies from state to state and agency to agency. Here are some of the more common ones we found:

  • Carpoolers. Insurers figure if you’re in a carpool you’re probably driving less, and will reward you by cutting your rate 10%-20%.
  • Driver training or defensive driver courses. Enrollment in one of the schools approved by your local Department of Motor Vehicles can cut your rates by 5%-15%.
  • Good drivers. No accidents or moving violations in the last three to five years? Good drivers in California, for example, get a mandatory 20% reduction.
  • Out-of-town students. A college education is still a good thing–at least when your young coed attends a school 100 or more miles away and doesn’t have his or her own car there. This way, you can drop the “young driver premium” many insurers tack onto your family policy, for a 10%- 15% rate reduction.
  • Low annual mileage. If you drive less than 10,000 miles annually or don’t commute to school or work, you may be eligible for this discount.
  • Good students. Students under 25 can expect discounts of up to 25% if they maintain a B average, or make the honor roll or dean’s list.
  • Mature drivers. Drivers 50 and older receive 10%-20% discounts.
  • Multi-car/multi-policy. It pays to stick with the same company or insure one or more vehicles together. The same is true for policyholders who insure their home with the same company.
  • Nonsmokers. Discounts may be credited toward liability, no-fault and collision.
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