Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

People are turning to equity release products to make payments on their credit cards and mortgages, as well, according to Mark Gettinby, finances director of the Help the Aged subsidiary.

He urges people to speak with an expert before making a decision, however.

Many people do not understand the details of equity release plans, says Mr. Gettinby. They will be better served if they get professional advice before continuing.

Dean Mirfin, business development director for Key Retirement Solutions, agrees with Mr. Gettinby, saying borrowers, especially retired homeowners, can avoid paying too much if they speak with a loan professional first.

Retirees may not get the best advice or find the best deals from equity release providers who mostly interested in making a sale.

Savers are enticed to banks and building societies with offers of high interest rates, but after an initial period, those rates often fall below the Bank of England’s base rate.

Nationwide is asking that savers be notified when their rates will be lowered and that they be offered better deals by their savings providers.

Many people do not pay attention to changes in their savings rate, and providers are taking advantage of their lack of interest.

Savings providers compete for customers in this highly competitive sector, according to Matthew Carter, director for savings at Nationwide.  In this environment, some providers seem less interested in taking care of their customers and more interested in profits and best buy status.

Many companies advertise introductory offers today, challenging savers who want to make good decisions.  Mr. Carter believes that savers should receive notice just as mortgage borrowers are notified when their rates are due to change.

Savers might be better off looking for savings plans with a constant rate of return rather than jumping from deal to deal, says Lisa Taylor of Moneyfacts.co.uk, the personal financial information firm.

She says savers can avoid the complicated process of starting new savings quite often by finding an account with a good interest rate.  Today’s market changes constantly and people who shop around for new deals spend a tremendous amount of time and energy when they might be equally well served with an account the performs well on a consistent basis.

The base interest rate was reduced by .25 percent in December, however, savers’ earnings have dropped by a greater factor than that.

In some cases, the savings rate has been cut by more than double the amount of the base rate cut.  Many accounts that carried exceptionally low rates have seen a much higher proportional reduction, says Ms. Taylor.

She points to Halifax Liquid Gold as an example.  Prior to the rate cut, the company’s accounts already offered a low 1.36 percent rate.  When the rate was cut by .36 percent, more than one-quarter of the original rate vanished.

Other big name lenders cut their rates, as well, including Alliance & Leicester, Abbey, HSBC, Halifax, Lloyds TSB, NatWest, and the Royal Bank of Scotland.

The current rate at Moneyfacts.co.uk is 3.77 (no notice at £1K), a rate lower than the rate of inflation.  Ms. Taylor fears that many savers will lose value in their savings accounts.

She says that long standing customers who have owned an account for quite some time are likely to be the worst hit.  Unfortunately, their loyalty is not paying them back.

Abbey National Financial surveyed more than 1,000 adults and estimates that Britons will transfer three million credit card balances.

During the first quarter of 2008, balance transfers are expected to average £2,666.  Eight percent of men surveyed and seven percent of women reported that they plan to take advantage of some kind of balance transfer offer.

The average balance transfer for men was £3,395.  In contrast, women expected to transfer an average of £1,820.

Geographically, the largest balance transfers were reported by those living in the Midland (£3,021), followed by those in south-east of England (£2,900).  Residents of northern England, Scotland and Wales reported smaller balance transfers (£2,501, £2,154 and £2,022 respectively). 

Roger Lovering, managing director of Abbey Credit Cards, says he is glad to see that many Britons are considering ways to get control of their finances.  People are often surprised by credit card bills after the holiday season.  Mr. Lovering advises people to be aware of their financial condition during the festive season. He urges them to watch what they add to their credit cards to avoid excessive repayments.

New research conducted by MoneyExpert.com indicates that 2.6 million are planning to switch, while 6.6 million report they will stay with their current provider.  Those who do not switch will pay an average 16.82 percent interest rate.  The study further suggests that many people are discouraged by recent news of credit application rejections.

During the month of January, nearly 7 percent of credit card customers will change providers.  Experts advise them to pay down their debt as much as possible during the interest-free period.

Sean Gardner, chief executive of MoneyExpert, warns credit card companies to expect a large volume of changes as Britons recover from their Christmas buying binge and try to work through the “financial hangover” of the New Year.

Mr. Gardner says he is glad to learn that many people are thinking of ways to pay down their debt.  Still, he worries that too many will simply add Christmas spending to their debt load.  In the long term this will add to their financial woes.

He advises people to cut their borrowing costs as a first step toward containing their debt.  After transferring their balance, they should continue to make repayments.

Mr. Gardner warns borrowers to use caution because many balance transfer offers that feature 0 percent interest are accompanied by high transfer fees.  A fee of three percent could cost the borrower an additional £60 on a £2,000 debt transfer.

More than 70 percent of credit cards currently offer a transfer deal.  Egg and Virgin Money have the longest interest-free period, at 15 months.

Age and geography appear to be a factor in the decision to change credit card companies.  Customers in the 25 to 34 age group are most likely to change.  Fifteen percent of customers in Scotland are plan to change, compared with seven percent in the South-East and six percent in London.

The Consumer Credit Counseling Service (CCCS) advises people to plan ahead to cover regular expenses throughout the year.

People who take the time to write down a budget for every month of the year will benefit, says Frances Walker, a spokesperson for the CCCS.  The exercise will let them identify ways to maximize the money at their disposal.

If people are using more than 20 percent of their annual income to make repayments on loans, they have borrowed too much, says Ms. Walker.  A debt consolidation loan with a single monthly payment may help remedy this situation.

Data collected by Credit Action indicates that debt in the UK amounts to £1,400 billion.

Data from a recent survey by Fool.co.uk reveals that 38 percent of those surveyed who said they would be buying a home soon expected to complete the transaction this year, and another 34 percent will do it in 2009.

Many people who have been planning to move into homeownership will be encouraged to go ahead by current changes in the market, says David Kuo, head of personal finance at Fool.co.uk.  Too many people ask the wrong question when beginning the process, however.  They should be asking themselves what they can afford to repay rather than how much they can borrow, says Mr. Kuo.

The report indicates that over the next five years, sellers will outnumber buyers at a ratio of about five sellers for every four buyers.

Fool.co.uk is an online financial community that helps rethink their relationship with money.

The lower tiers tend to carry the highest interest rates, so borrowers may actually be paying more when borrowing a smaller amount.  This is especially true when loan providers have two tiers for loans between £1,000 and £5,000.

David Black, Defaqto’s principal consultant on banking, cautions borrowers to do their research before deciding what sum they want to borrow.  He says it is possible to save quite a bit on interest charges with a bit of work.

A borrower can save as much as £1,000 by borrowing a larger sum and repaying it over a longer term.

A large tier rate may not indicate noncompetitive interest rates, so Mr. Black advises borrowers to pay attention when shopping for a lender.

Defaqto research further reveals that shopping for more favorable rates on credit card can also produce significant savings.  Consumers have little incentive to stay with a company that has high rates.

People who fail to plan for large expenditures may find themselves short of funds and struggling to make repayments, according to DWP.

More than 50 percent of Britons spend too much during Christmas.  People in the north-east, north-west and Wales encounter the greatest financial problems as a result.

Many people find it difficult to pay their bills after Christmas, says Susan Clarke of Jobcentre Plus.  This can put them in a very nerve-racking predicament.

People might reduce the level of stress that goes along with overspending by getting control of their financial matters.  A debt consolidation loan might be of help.

The DWP announced formation of a new unit to work on issues of child poverty.  Over the past ten years, government measures have helped to raise 600,000 children out of poverty. 

The most frequently overlooked of all household bills was the council tax.  Research conducted on behalf of MoneyExpert.com by YouGov indicates that 2.3 million people paid late or did not pay at all.  Energy bills proved to be a problem for 1.3 million people.

As the price of gas and electricity climbs and credit becomes tighter, Britons may have an even more difficult time making their repayments.  The financial advice website warns that this can have serious consequences for consumers.

According to Sean Gardner, chief executive of MoneyExpert.com, it is not disastrous to pay one bill late.  However, regularly making late payments is a sign of trouble.

People who miss a payment may lose access to a service or even end up in court, warns Gardner.

Moneysupermarket.com reports that approximately three million people in the UK failed to make payments on time, resulting in an additional £35 million in late fees, according to data collected by YouGov.