Trade in your clunker? Seven ways to save on insurance

While you may have scored a great deal on a new car under the government's Cash for Clunkers program, insuring it could be costly.

Auto insurance premiums for a new vehicle are generally much higher than what you probably paid for your jalopy, particularly if you're financing it, as a higher level of coverage is required.

But there are ways to trim costs, which means inquiring about your insurance rate early on in the setup process.

• Ask for a higher deductible: In the event of an accident, the amount you pay out of pocket varies, depending on your policy.

The higher the deductible, the lower the premium.

"Increasing your deductible from $250 to $500 could reduce your collision and comprehensive coverage by 15 to 30 percent," said Loretta Worters, vice president of the Insurance Information Institute. "Going to $1,000 could save you about 40 percent or more."

• Bundle your auto insurance with your home or renters insurance:

Many insurance companies offer a discount on auto premiums if they can sign you up for another policy.

It's wise to ask what other kinds of insurance your company offers.

• Maintain good credit:

Many people assume that after getting financing for a new car, no more credit checks are required.

But an increasing number of insurance agencies are analyzing credit scores and coming up with a "credit-based insurance score" to help determine rates.

Each insurer considers credit scores differently, so it's important to ask what impact your credit rating has on your insurance rate.

"They've found an association between lower insurance credit scores and higher claims filings," said Jeff Blyskal, senior editor for Consumer Reports.

People with higher scores are likely to have higher incomes and settle fender-benders without filing a claim, keeping their driving record clean.

Lower-income accident victims may have no choice but to file a claim, Blyskal said.

• Ask about affinity discounts:

Belong to a fraternity or sorority? Credit union? Alumni group?

Ask your insurance agent if the organization you belong to is eligible for a reduced rate.

While they're often not huge discounts, 2 percent to 5 percent off your premium can be helpful.

• Buy uninsured motorists insurance and additional liability coverage:

While it might add a few dollars to your premium, not having uninsured motorist coverage could end up costing you more should you get into an accident and the driver at fault doesn't have insurance.

"During the recession, people are going to go without insurance," Blyskal said.

As for liability coverage, he advises getting more than the minimum coverage of $100,000 because medical bills stemming from accidents can add up quickly.

"Don't go for the minimum, don't cut back there because it can expose you and you'll have to pay any expense above your coverage," he said.

• Research various vehicles and geographic specifics:

Cars and sport utility vehicles that are more likely to be stolen will cost more to insure. Certain states are considered port states, and a higher number of auto thefts might take place there because it's easy to ship the cars to other countries.

What's more, insurance could cost you more if medical costs are higher in your state, or if there's more litigation activity, Worters said. Some cars are considered safer than others, and therefore cost less to insure.

• Shop around:

It's never too late to change insurance companies.

Even if you've already chosen an insurance company to secure the purchase of your new vehicle, Blyskal and Worters both advise drivers to look for better deals at other companies because rates vary widely, from hundreds to thousands of dollars for the same coverage.