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How to put the brakes on auto-insurance costs

Paying for accident coverage is a big burden for most drivers. Jean Chatzky has tips to help reduce your premiums.

Q: The cost of my auto insurance is just crazy! Are there ways of reducing the amount I pay to cover my car?

A: Maybe you just passed a big birthday. Or perhaps your car did. Even if only a little has changed since you purchased your car or insurance policy, you may be due for a discount on your premium. You just have to know what to ask for. Here are some areas where you should be able to save on your premium:

Raise your deductible: Jumping from $200 to $500 on collision and comprehensive can save you 15 to 30 percent, according to the Insurance Information Institute.

Short commute: If you use your car to commute and drive fewer than five miles to get to work, you may save up to 10 percent on your premium. You may get a similar discount if you now drive less than 7,500 miles total a year.

Car alarm: If you have a car alarm (or some other anti-theft device), you can cut your premiums on comprehensive coverage by 10 percent.

Driver training: A discount is usually in the cards not only for students who take driver's ed, but also adults who take an approved refresher course.

Drop collision: You may want to consider dropping such coverage on older cars.

Jean Chatzky’s Bottom Line
This week: To lease or buy a car?
As with many buying decisions, choosing between auto purchase or leasing really depends on your situation.

Buying is often a cheaper option for the long term. Still, if you like a new car every couple of years, you may be better off leasing.

Here are four questions to help you make your decision:

1. How many years will I have this car? If the answer is three or less, you're better off leasing. At four you could go either way. More than four, buy.

2. How many miles do I drive annually? If it's more than 15,000, you ought to buy. Leases usually figure on mileage of 12,000 to 15,000 a year. Drive more than that and you'll pay an additional 10 to 15 cents per mile. Ouch!

3. Do I take good care of my car? Be honest. If you're the kind of person who never misses an oil change and avoids curbs at all costs, you'll be fine when it comes time to return your leased car. But if not, buy. Otherwise, you could find yourself looking at a hefty bill for "excessive wear and tear."

4. Do I use my car for business? If yes, you may want to lease (there are tax benefits).

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, .