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Insurance agencies use many factors to determine your rates. Credit, driving record, and age range help to estimate your potential risk as a client. But with today’s technology, companies can get an actual sample of your driving via electronic data-tracking devices, ultimately saving you money for responsible driving.

With the development of on-board computers in automobiles, every car now has a sort of “black box” that can record driving information and, with the right equipment, transfer information like top speeds and mileage. Several programs now exist in various parts of the United States, and they get you big discounts on your monthly premiums.

Device Tracking Programs

Allstate’s Drive Wise

This program offers discounts based on information collected from a device that you plug into your car’s onboard computer-available in all cars made since 1996. It measures mileage, hard braking, acceleration rates, time of day driven, and speed (when you exceed 80mph). This information is then automatically transmitted to Allstate. You can even check your performance online.

You receive a 10% discount just for signing up and up to 30% after your first policy period. The program cost is $10 per policy period.

Availability: Arizona, Illinois, Ohio

Progressive’s Snapshot

Similar to Allstate’s Drive Wise program, signing up for Snapshot transfers data to the insurance company for discounts measuring most of the same information.

You earn an initial discount after one month, and you send the device you installed back after 6 months. You are then eligible for another, permanent discount up to 30%. There is no cost to enroll and the data can’t hurt your rates.

Availability: 37 states

OnStar Programs

OnStar is a subsidiary of General Motors which allows subscribers a number of special features in their car, such as GPS navigation, emergency contact, vehicle diagnostics, hands-free calling, and other features. It is installed on all GM vehicles; new vehicles receive a free one-year subscription, and used vehicles receive a free 3-month subscription. This program has been integrated into two different mileage-based insurance programs.

GMAC’s Low-Mileage Discount

All GMAC customers who have a subscription to OnStar can enroll in this program, which is based entirely on mileage, for free.

Drive fewer than 15,000 miles per year and you will get a discount of at least 13% and up to 54% if you drive fewer than 2,500 miles per year.

Availability: 35 states

State Farm’s Drive Safe and Save

Also utilizing the OnStar system, Drive Safe and Save tracks your mileage and gives you up to 44% savings on your car insurance premiums. The driving is constantly updated though, so your discount will change every policy period based on your latest driving statistics.

Availability: California, Colorado, Illinois, Ohio, Texas

MileMeter

This Texas car insurance company offers insurance by the mile. Prices start at 2.5 cents per mile. No need any fancy electronic equipment for mileage tracking-all you have to do is send the company a picture of your odometer when you sign up and each time you renew your policy.

Availability: Texas only

Pre-1996 And Non-GM vehicles

Pre-1996 vehicles cannot be retrofitted with the OBD II diagnostic device. However, non-GM vehicles can be fitted with a custom rear-view mirror equipped with OnStar.

It’s not always easy to pay insurance premiums. There are always more expenses and never enough money. Use these hints to squeeze extra cash from your budget and afford premiums. Even if one tip alone doesn’t generate the savings, several combined will.

#1 Carpool to work and to do shopping

Gasoline costs most households nearly $1500 a year. Monthly, there is a national average of $368 spent on gas. If you reduce your gas use by even a third, you will have saved a big portion of your premiums.

The easiest way to do that is to share the commute to work and/or do your grocery shopping with a friend or neighbor. Two commuters halves the price you pay for a ride to work. Three commuters means you only pay a third. Load up those vehicles to really save on money.

The less you drive, the less you pay in premiums. If by carpooling you reduce your annual mileage significantly, you could really reduce your premium levels.

Find carpool partners online using these nonaffiliated sites:

• GoLoco (the Facebook of carpooling)
• Craigslist
• eRideShare

You can also just post something on the boards at work.

#2 Cut back on luxury expenses

By luxury, we don’t mean beach resort vacations or diamond rings, although you could definitely cut back if you are buying that stuff willynilly! What we are talking about are non-essential purchases.

For instance, rather than going to see a movie on a Friday night, have a night in with family and friends. Play a board game or tell stories. To save money, make it a potluck dinner, rather than paying for it all yourself.

Are you a big coffee drinker? Maybe you don’t need to drink so much. In fact, green tea can be cheaper than coffee and better for your digestion and blood pressure as well. If you usually hit Starbucks at some point in the day, bring your coffee from home in a thermos instead.

You can definitely eat in more, and get more calories from nutrient-dense staple foods, such as brown rice or whole grain bread and pasta.

#3 Part Time Work

Extra income never hurts, and it doesn’t even have to mean taking on a shift at the local fast-food restaurant or anything. Some people make a lot of money by picking things from garage sales or thrift stores and reselling them online for more. You’d be surprised by the quality of things that people get rid of and how much it can go for on eBay!

#4 Buy in Bulk

If there is something you need to buy all the time, check and see if you can’t buy it in bulk. The larger the quantity, the less you pay per unit. This works for human food, pet food, bathroom tissue, toothpaste, and more. Again, the Internet is a great resource for this, as well as for cheap car insurance quotes.

#5 Sell Advertising Space

The new trend in earning extra cash is to sell your vehicle as a billboard. Putting an ad wrap on your car might get you an extra couple hundred dollars a month, enough for car insurance, or even get you free gas if you find a gas station that is willing.

Financial obligations with a mandatory character always seem to get people down. We love it when we have a choice, right? So when it comes to paying our regular insurance premiums for having our cars obligatorily covered many people start asking the true purpose of vehicle insurance and why it’s imposed on all drivers. Some go all the way to dropping their coverage altogether and driving the roads with no insurance at all. The outcome of such a decision usually comes with a substantial fine or, worse, paying out of own pocket for the damage caused during the accident. So why this type of insurance is mandatory, and moreover logically necessary for any car owner? Let’s first look at the facts.

Car insurance is a legal requirement for operating a vehicle in all states of the US. In some states you won’t be able to get the plates registered unless you provide a perfectly valid insurance policy. Not meeting the insurance requirements results in fines, license suspension, car confiscation and even time in custody, depending on the state legislation. But what are these insurance requirements in the first place?

Well, it’s not that serious as it may seem. The only type of insurance coverage that is actually mandatory in the US is third party liability, which includes bodily injury and property damage. These two types of coverage pay for injuries or damage respectively caused by the policyholder to a third party while operating the insured vehicle. If put simple, third party liability coverage lets you cover the mess that you’ve caused without having to pay out of own pocket. And while accidents are quite common on the road with so many cars out there, this coverage type assures that everyone has the necessary minimum coverage to pay for the accident if it takes place. That’s why car insurance is also used as a proof for the financial ability of the driver to cover the costs of repairs or medical attention that he or she has caused.

OK, now that we’re done with third party liability coverage, many of you might ask about all other coverage types you carry in your policies. It may be a relief for some of you, but they all are purely optional. While you have to meet a certain limit with third party liability, all other coverage types can be freely modified and excluded from the policy. Take note, however, that if you’re using a car loan to purchase a new vehicle your contract will usually force you to buy comprehensive and collision coverage as well, so keep an eye out for that.

But let’s take a look on the logic side of the matter for a moment. If car insurance wouldn’t be mandatory it still would reasonable to purchase it. Why? Simply because it gives you a peace of mind while being behind the wheel. Sure, everybody think that they will never have accidents because they are so good at driving. But accidents still happen and the costs involved in repairs and medical assistance account tens of thousands of dollars. Not many people can afford to cover such costs out of own pocket, that’s why we use car insurance and that’s why it’s a real necessity rather than an option.

We sometimes forget how big the US actually is. It’s a major continental landmass and home to slightly more than 300 million people. Perhaps it’s therefore not so surprising that, every 40 seconds, a vehicle is stolen. Human nature being selfish, there’s always a temptation to take what you want rather than pay for it. Yet, when you see the scale of the crime, you also have to see how we are all victimized. Only about half the vehicles stolen are recovered. The remainder are either resprayed and sold on with new tags, or broken down for spares. This stopped being a problem with joyriders years ago. It’s a professional operation now with a turnover in the billions. So with the chances of you ever seeing your vehicle again only 50%, the value of the claims made is high. Insurance companies are for-profit. That means the cost of all these claims gets divided between us through higher premiums. How much more do we pay? The Insurance Information Institute estimates theft claims add about about 25% to the current rate for comprehensive coverage.

Just think how many people carry insurance and make your guess of how many billions of dollars are poured into this black hole of crime every year. Yes, it’s that big a number and then some. So how should you react? Well, no matter what you do, a determined thief will always be able to take your vehicle – even if it means lifting it on to a truck and carrying it away. But there are a number of things you can do to slow down the thief. Then it’s all costs and benefits. Thieves like to be “gone in sixty seconds”. It reduces the risk of them being identified and caught. So if a thief can see basic precautions in place, he may well pick something less well protected. Now how much did those precautions cost?

Well, it costs you nothing to remember to remove your keys, close the windows and lock the doors. Try parking in a well-lit area with a lot of people passing. Then fit a visible and strong steering wheel lock. The Club is the best known and good value. Sure it takes you a minute to fit and then unlock when you come back. But it improves the chances there will be a vehicle to come back to. The next step up is an immobilizer. One of the best is made by Ravelco. Once you remove the plug, you cannot start your vehicle even with the ignition key. The final level of protection is from a tracking device like LoJack with GPS to guide the police to your vehicle’s location.

With sensible precautions in place, tell your insurer. The next auto insurance quotes coming your way will always include a discount as a reward for improving security. Hopefully you will now avoid all the hassle and financial losses caused by a theft, and see your car insurance rates fall to more manageable levels. Your insurance may never be “cheap:” but at least you should see it becoming more affordable.

In offering advice, there’s no point in complaining about the way the system works. All you can do is explain what insurers do and then suggest the best way of trying to deal with it. For better or worse, insurers take your ZIP code into account when setting the premium rates. For a moment, let’s say a word in praise of California. In 1988, Proposition 103 forced insurance companies to place more weight on your driving safety record, your years of driving experience, and the number of miles you drive every year than any other factor, including the ZIP code. Breaking the linkage between premiums and the ZIP code still took years – the insurers fought tooth and nail to prevent implementation of the Proposition. But it is now in force and Californians benefit. Shame about the rest of America where the practice of redlining continues, affecting not just insurance but banking and, even, where shops choose to locate or deliver to. That this is racial profiling under another name is ignored.

We now come to the difficult part. Neighborhoods get a bad reputation for a number of different reasons. In this case, it’s not so much the why as the result that concerns us. Those that can, move away to a “better” area. This is great for those individuals but it accelerates the downward trend of the area. The only ones left behind are those who cannot move. The tax take drops. Local services suffer. A ghetto is born. So, if you are a renter, can you afford the rent in a ZIP-code area with lower insurance rates? It might be worth paying a bit more on the rent and saving on the vehicle insurance. You come out even on the move. If you own or cannot afford the rent elsewhere, can you afford a lock-up garage in a better ZIP-code area within easy walking distance. Although walking is not usually considered the best way of getting around a city, this may save you money.

Now let’s look from the other point of view. If you have been offered a job in a different part of the state or out of state, check out where you are going to live before accepting the job. This means looking around the area on the map and checking out the ZIP codes with the insurers. The advantage of this site is you can get multiple auto insurance quotes based on different ZIP codes. The use of the site is free and you can quickly find out whether there are going to be problems with insuring your vehicle in the new area. You may be looking at longer commute distances. You will have to balance the increase in the premium rates against the extra cost in gas against the higher property values in the better areas. Whether you are thinking of moving out of or into an area, this article should emphasize the need to get as many auto insurance quote as possible. Shopping around finds the cheapest rates.