Driving Less? Tell Your Insurer and You Could Save

If the high price of gas means you're spending less time behind the wheel, you could save an average of 5% to 15% on your car insurance – between $47 and $142 – according to the Consumer Federation of America (CFA), which crunched the numbers. Believe it or not, you may be eligible for an immediate discount on your auto policy, and one phone call may be all it takes to get it.

Why? "Auto insurance rates are partially based on how much you drive and how you use your car," said J. Robert Hunter, Director of Insurance for CFA. "We encourage all Americans to act now to save money by calling their insurance company or agent and asking if they qualify for an immediate rate reduction."

If you used to drive to work or school, but have now switched to mass transit or car-pooling, ask your insurer to change your classification from "Drive to Work" to "Pleasure." CFA says your savings could be 10 to 15 percent. Even if you continue to drive to and from the train or bus station , you could still save between 5% and 10%.

It's Not Just Commuters Who Can Save
Insurance companies charge different rates depending on the number of miles you drive. Even if all you've done is consolidated a few chores to cut back on your driving by 10% -- from 200 to 180 miles a week – it adds up – in this case, to over 1,000 miles a year. You could easily go from driving over 10,000 miles a year to under it, and that can save you between 5% and 10%, according to CFA.

"Many consumers would receive a lower rate in this situation, because insurers often use 10,000 miles as a key 'break point' in setting rates," explains Hunter. "Simply explain the actions you are taking to drive less and estimate how many fewer miles you are driving a month."

Who Will Save the Most?
It may surprise you to learn that CFA believes the savings will be greatest for people who pay higher car insurance rates, for example, younger drivers and urban dwellers. Talk about a silver lining! The expectation is that folks who only pay a few hundred dollars for auto insurance, say, an adult living on a farm, will save less.

Wherever you live, no matter how old you are, if you're driving less, call your insurer today!  Please let us know how you make out.

Nancy Castleman – Co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes on all these subjects for CreditBloggers.com.