DETROIT — Though you may have scored a great deal on a new car under the government's Cash for Clunkers program, insuring it could be costly. Auto insurance premiums for a new vehicle are generally much higher than what you probably paid for your old jalopy, particularly if you're financing it, as a higher level of coverage is required. But there are ways to trim costs, which means inquiring about your insurance rate early on in the setup process. Kimberly S. Johnson, Associated Press
Ask for a higher deductible: In the event of an accident, the amount you pay out-of-pocket varies, depending on your policy. The higher the deductible, the lower the premium. "Increasing your deductible from $250 to $500 could reduce your collision and comprehensive coverage by 15 to 30 percent," said Loretta Worters, vice president of the Insurance Information Institute. "Going to $1,000 could save you about 40 percent or more."
Bundle your auto insurance with your home or renter's insurance: Many insurance companies offer a discount on auto premiums if they can sign you up for another policy.
Maintain good credit: Many people assume that after getting financing for a new car, no more credit checks are required. But an increasing number of insurance agencies are analyzing credit scores and coming up with a "credit-based insurance score" to help determine rates.
Each insurer considers credit scores differently, so it's important to ask what impact your credit rating has on your insurance rate. "They've found an association between lower insurance credit scores and higher claims filings," said Jeff Blyskal, senior editor for Consumer Reports.
People with higher scores are likely to have higher incomes and settle fender-benders without filing a claim. Lower income accident victims may have no choice but to file a claim, Blyskal said.
Ask about affinity discounts: Belong to a fraternity or sorority? Credit union? Alumni group? Ask your insurance agent if the organization you belong to is eligible for a reduced rate. Two to 5 percent off your premium can be helpful.
Buy uninsured motorists insurance and additional liability coverage: While it might add a few dollars to your premium, not having uninsured motorist coverage could end up costing you more should you get into an accident and the driver at fault doesn't have insurance.
As for liability coverage, he advises getting more than the minimum coverage of $100,000 because medical bills stemming from accidents can add up quickly.
"Don't go for the minimum, don't cut back there because it can expose you and you'll have to pay any expense above your coverage," he said.
Research various vehicles and geographic specifics: Cars and SUVs that are more likely to be stolen will cost more to insure. Certain states are considered "port states," and a higher number of auto thefts might take place in these regions because it's easy to ship the cars off to other countries. Insurance could cost more if medical costs are higher in your state, or if there's more litigation, Worters said.
Some cars are considered safer than others, and therefore cost less to insure. Check the Web site for the Insurance Institute for Highway Safety (iihs.org) for vehicle ratings.
Shop around: It's never too late to change insurance companies. Even if you've already chosen a company to secure the purchase of your new vehicle, Blyskal and Worters advise drivers to look for better deals at other companies because rates vary widely, from hundreds to thousands of dollars for the same coverage. Web sites such as insweb.com and insure.com let people check rates at multiple companies.
Updating information on your insurance policy is important, as life events such as getting married can save you money. Calling your current insurance company and asking about discounts is also a good idea.
"Don't assume that when you get a quote from one insurance agency that's the final word," Blyskal said. "Especially if it seems high."