It can be difficult to obtain a good deal in car insurance if you don’t how the industry works. Before applying for insurance, you have to learn about the important factors that influence the premium rate.

Most car insurance companies will require you to show your credit report. They want to evaluate your credit report to learn about your financial circumstances. If you have good credit score, they will offer a premium discount.  Studies have shown that people who pay their premium on time tend to have a lower risk than people who don’t pay their premium on time. If you have a low credit score, it is recommended that you wait until your credit score becomes acceptable before applying for the insurance. To increase your credit score, you must pay your credit card bills on time.

Insurance companies charge a lower premium on customers who hold low risk occupation. The insurance company does research on the driver’s habit by collecting the record of the demographics. Afterwards, they classify the driving record based on the different occupation. In this way, they know people in which professions have the lowest driving risk. People who work in certain professions such as doctors, and engineers are considered low risk drivers. Sometimes, insurance companies give discount for people that achieve good grades in their college and university studies. When applying for insurance, make sure you offer information about your education and profession so that you can qualify for a low risk discount.

Most states require the car owners to make payment for the sales tax. Some of the states that require car owners to pay the sales tax include Hawaii, Alaska, Florida, Illinois, New York, Washington D.C., Nebraska, Wisconsin and etc. To avoid the sales tax, you must request for it. The insurance company will never take the initiative to pay the sales tax for you. Most insurance company will pay the sales tax if the customers make the request.

To reduce the auto insurance cost, it is advised that you don’t include your teenager in the policy. It is not necessary to include your teenager in the policy unless he or she had reached 18 years old. Most parents only add their teenager to the policy when they have a driving license. When filing a claim, make sure you inform the insurance company that your teenager is a licensed driver.

The model of your car will influence your premium cost. Car insurance companies use a rating system to evaluate the car model. The car is given a rating in between 1 – 27. If your car model has a high rating, you will be charged with a higher premium. To find the car model with the lowest rating, you can use the online vehicle ratings comparison tool.