What's the Deal: Saving on car insurance

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If you haven't shopped around for car insurance lately, you're probably paying more than you have to. (WPVI)

If you haven't shopped around for car insurance lately, you're probably paying more than you have to.

Insurance companies base premiums on many factors including age, driving record, car type. No surprise, right?

What is surprising is many are also basing your rate on your credit score and that factor alone appears to matter a lot more than you might think.

"What we found is if you have an excellent credit score, the rate you pay for car insurance is going to be about half of what it would be if you had a poor or fair credit score," said Kevin brasler from Checkbook Magazine.

Checkbook Magazine says it's undercover test has found some insurance companies are weighting your credit score more heavily than even a DUI or accident on your driving record.

Consumer Reports says a two-car couple with poor credit will pay an average of $2,090 extra compared to a family with excellent credit.

But since each carrier uses your credit score differently in calculating rates, it is more important than ever you shop around at least once every two years.

"The companies that are high-priced or mid-priced one year...3, 4, 5 years later offer really low prices to new customers," said Kevin.

Checkbook's price comparison of the Delaware Valley's largest auto insurance companies netted some surprising results.

Most drivers will save $500 to $1500 dollars or more by switching.

Testers used the example of a couple with two cars living in Motngomery County with clean driving records and found they'd pay $895 with GEICO, $1,082 with Progressive, or $1,138 with Esurance. Compare that to $1,962 with Allstate, $1,984 with State Farm, and more than $3000 with Donegal or Penn National.

"So don't assume I'm with a larger company, that means I'm paying the lowest possible rate. That's not true at all," said Kevin.

You don't have to wait until your current policy term expires to switch. When you switch to a lower-priced company, your old insurance company will refund the unused share of your premium.

For the results of Checkbook's local results, more tips, and an auto insurance comparison tool, CLICK HERE.

Our 6abc viewers can access everything for a limited time for FREE without even being a Checkbook Magazine subscriber!

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