There is a very good chance that you are — this very moment — paying too much for your car insurance. There is an even better chance that you could get a better rate, from another insurance company, than you could from your existing insurer

So why not take an hour or so and review your policy for potential savings? Or, if you’re fed up with the high insurance rates from your current insurer, shop around for a new company.

The Internet has created increasing competition between car insurance companies. It is easier than ever for consumers to shop for low insurance rates, to analyze coverage and compare premiums. Still, studies have shown that people don’t shop around for insurance in the same way they might shop for a new car. Also, people tend to stay with the same car insurance company for years. Why not prove these studies wrong? Put the power of the Net to work for you and save money in the process.

You can save on auto insurance in five ways:

1. Make sure you get all discounts you qualify for
2. Keep your driver’s record clean and up-to-date
3. Adjust your coverage to assume more risk
4. Drive a “low profile” car equipped with certain money-saving safety features
5. Shop around for a good, low cost insurance provider

First, let’s look at the discounts you might qualify for. Discounts fall into a number of categories:

• Low-risk occupations
• Professional organizations
• Combined coverage
• Discounts for safety features
• More risk assumed by driver
• Discounts for senior citizens

Professional Organizations and Auto Clubs
Have you ever been about to pay $100 for a hotel room, only to discover that a AAA discount saves you 15 percent? Now you’re paying $85 and feeling proud of yourself. It’s similar in the insurance business. Affiliation with AAA — and certain other professional organizations — will lower your rates. You should check with your employer to see if there are any group insurance rates. At the same time try checking directly with the insurance company representative when you inquire about the cost of policies.

Discounts for Auto Safety Features
Auto safety features will also lower your payments. Heading the list of money saving safety features is antilock brakes. Certain states — such as Florida, New Jersey and New York — encourage drivers to buy cars with antilock brakes by requiring insurers to give discounts. Check to see if you live in such a state, or if the insurance company you are considering gives a discount for this feature. Automatic seatbelts and airbags are also frequently rewarded with insurance discounts.

The word shopping brings a feeling of immediate excitement to most people. But if you combine the word shopping with car insurance — as in “shopping for car insurance”

The word shopping brings a feeling of immediate excitement to most people. But if you combine the word shopping with car insurance — as in “shopping for car insurance” — it produces the opposite effect. The thought of shopping for auto insurance makes the eyes glaze over and the heart rate drop to the pace of a slumbering couch potato.

Couch potato? Indeed. Doug Heller, a consumer advocate at The Foundation for Taxpayer & Consumer Rights (a California-based consumer advocacy group) and a recognized insurance issues specialist, told us that too often “people purchase insurance by calling the number on the screen.”

But wait, this is important stuff! You want to be adequately covered if you get in an accident. And you certainly don’t want to pay more for car insurance than you should. Maybe waiting for a solution to be beamed into your living room is not the best idea.

How can you stay awake while navigating through this murky subject? Just remember: There is money to be saved. How much? Hundreds, even thousands, per year. For example, one of the authors typed all of his insurance information into a comparative insurance service. The quotes (for very basic coverage on two old cars) ranged from $1,006 to $1,807 — a difference of $801 a year. If you’re currently dumping thousands into your insurance company’s coffers because of a couple of tickets, an accident or a questionable credit rating, shopping your policy against others may be well worth the effort.

Look at it this way — you can convert the money you save into the purchase of something you’ve lusted after for a long time. Hold that goal in your mind. Now, let’s begin.

Before you can shop for something, you have to decide what you need. The first step in finding the right auto insurance for you is to figure out the amount of coverage you need. This varies from state to state. So take a moment to find out what coverage is required where you live. Make a list of the different types of coverage and then return for the next step. (You will find a list of each state’s requirements and an explanation of the various types of insurance in “How Much Auto Insurance Do You Really Need?”. Also, check out “Little-Known But Important Insurance Issues” as it has a glossary of basic insurance terminology.)

Now that you know what is required, you can decide what — if anything — you need in addition to that. Some people are quite cautious. They base their lives on worst-case scenarios. Insurance companies love these people. That’s because insurance companies know what your chances are of being killed or maimed, and how likely it is for your car to be damaged or stolen. The information the insurance company has collected over previous decades is crunched into “actuarial tables” that give insurance adjustors a quick look at the probability of just about any occurrence.

It is important to keep in mind that the basis of insurance is a difference of opinion between you (the insured) and them (the insurance company). You believe you will, at some point, probably get in an auto accident. The car insurance company believes you probably won’t. And the insurance company is willing to take your money to prove you wrong.

So how much auto insurance should you buy beyond your state’s minimums?

“Look at your personal financial situation,” Dennis Howard, director of the Insurance Consumer Advocate Network (I-CAN) and former insurance adjuster, advised. “If you have assets to protect — and that is all insurance is doing — get enough liability coverage.” For instance, if you purchase $50,000 of bodily injury liability coverage but have $100,000 in assets, attorneys could go after your treasures in the event of an accident in which you’re at-fault and the other party’s medical bills exceed $50,000.

Howard noted that his general recommendation for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don’t buy excess coverage.

Another issue Howard mentioned is that the limits of any uninsured and/or underinsured motorist coverage that you purchase cannot exceed the limits of your liability coverage. Such coverage, he said, can be valuable, as it will cover lost income if you’re out of work for several months after being injured in a major accident.

Your driving habits may also be a consideration. If your past is filled with crumpled fenders, if you have a lead foot or a long commute on a treacherous winding road, then you should get more comprehensive coverage.

“Consumers should also be aware that they don’t have to buy the package [of collision and comprehensive coverage],” Howard said. “If your vehicle is older, if you have a good driving record and if there is a low likelihood that it would be totaled in an accident, but a high likelihood of it being stolen, you could buy comprehensive but not collision.” Seems like good advice for all of the 1989 Toyota Camry owners reading this article — this has been the most stolen car in the nation for several years (it’s often stolen for parts). But we would expect that most of them on the road have well over 100,000 miles.

At this time, a rather sobering point needs to be interjected. Just having car insurance doesn’t protect you from absolutely anything bad that might happen. First, the insurance company needs to back up the claims that they make in the fine details of the contract. TV ads show folksy adjustors at the scenes of natural disasters passing out claims checks like coupons for cocktail wieners at a supermarket. But, in case you haven’t noticed, real life is a bit different from TV ads. If you have an accident, your car insurance company will take a close look at your claim before mailing you a check. And the check may be written for an amount much smaller than you had hoped. For this reason, you should be intimately familiar with the terms of your policy and call the company with any questions you might have.

Now that you have made several practical and philosophical decisions, it’s time to start shopping. Begin by setting aside about an hour for this task. Bring all your records — your current insurance policy, your driver license number and your vehicle registration. Drink plenty of coffee. Have a phone at your elbow. And, of course, power up your computer.

Begin with the online services. If you go to Netquote.com or other insurance quote sites, you can type in your information and get a list of comparative quotes. The form takes about 15 minutes to complete. If this bores you, just remind yourself that you are saving money and you can use that money to buy something nice for yourself. If the entire shopping process takes you two hours to complete, and you save $800, you’re effectively earning $400 an hour.

A few things to keep in mind: (1) When you use quote sites, you may not get instant insurance quotes. Some companies may contact you later by e-mail, and some that are not “direct providers” may put you in touch with a local agent, who will then calculate a quote for you. (A “direct provider,” like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We’ll discuss the pros and cons of each later.) (2) It’s not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you’ll probably find it faster to pick up the phone, since most insurers currently don’t provide online quotes for this state.

You can also try getting insurance quotes from some of the insurance companies listed on the Edmunds.com Web site — Geico, InsWeb, or Insurance.com. The forms will take about 10 minutes each to complete.

Of course, there are many other insurers that you can contact online. But remember, while you’re researching companies, make notes in a separate computer file or on a piece of paper divided into categories. This will keep you from duplicating your efforts. When you visit the different online insurance sites you should take note of several things:

• Annual and monthly rates for the different types of coverage — make sure to keep the coverage limits the same so that you can make “apples-to-apples” comparisons
• An 800 number to call for questions you can’t get answered online
• The insurance company’s payment policy (When is your payment due? What happens if you’re late in making a payment?)
• Discounts offered by the insurance company that pertain to you
• The insurance company’s consumer complaint ratio from your state’s department of insurance Web site (more on this below)
• The insurance company’s A.M. Best and Standard & Poor’s ratings (more on this below)

Once you have exhausted your online options, it’s time to work the phones. Those companies you haven’t been able to get an online quote from should be contacted. Surprisingly, doing this process verbally can actually go faster than the online counterpart, providing you have all the information regarding your driver license and vehicle registration close at hand. When you get a quote, be sure to confirm the price. Also, ask them to fax or e-mail the quote to you as a record.

While talking to the insurance companies’ telephone salespeople, make sure you explore all options relating to discounts. Insurance companies give discounts for a good driving record, favorable credit score, safety equipment (for example, antilock brakes), certain occupations or professional affiliations, and more. For more guidance in this area, check out “How to Save Money on Auto Insurance.”

Always bear in mind that your mission isn’t just to buy the cheapest car insurance out there; it is to buy the cheapest insurance and still receive adequate coverage and service. “You don’t want to pay to get a great deal on insurance and then not get your car repaired after an accident,” Heller noted.

Your final selection should depend on two things:
a. the reliability of the insurance company based on the criteria above;
b. the price of the quote.

We can all find the lowest premium, but it may not be immediately obvious how to determine whether a company is reliable. When we say “reliable,” we’re talking about how the insurer treats you, the customer. Particularly, how will the company deal with you when you file a claim? Will you be paid the full amount to which you are entitled? And will you be paid promptly?

While there are never any guarantees, we’ve come up with several ways of seeking out the most reliable insurance companies:

1. Visit your state’s department of insurance Web site.
Although you may not be familiar with it due to lack of marketing, your state, and every state, has a department of insurance. Most departments have Web sites, and many publish “consumer complaint ratios” for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints an insurance company received per 1,000 claims. All of the experts we interviewed recommended that consumers use complaint ratios as a resource before making a decision.

“Just because they’re a big name doesn’t mean that they’ll be a ‘good neighbor’ or that you’ll be ‘in their hands,’” Heller noted. If you can’t get complaint ratios for your state, he said that you can often get a good idea of how a company treats its customers by comparing the complaint ratios published by other states (this obviously shouldn’t be the only deciding factor since a single insurance company often varies significantly from state to state — consistently favorable or unfavorable ratios may be revealing, though).

Another consideration: “High-risk insurers come out the worst [in the consumer complaint ratios],” said Brian Sullivan, a recognized insurance expert and editor of Auto Insurance Report, a weekly insurance industry publication. “Whenever you have a really big claim, it’s more complicated…. And these companies tend to insure people who get into big accidents.” Regardless, a high number of complaints should give you pause, even if the company is financially appealing.

Similarly, be sure to jot down those companies with favorable ratios. Howard’s Web site provides links and contact information for every state’s department of insurance.

Additionally, the department of insurance sites often provide basic rate comparison surveys. These can give you a rough idea of which insurers might interest you on a financial basis without the hassle of typing in all your personal information (as you must when you use one of the quote sites described above). This may be particularly useful if you’re going to use the phone, rather than the Web, to shop.

2. Find out which companies body shops would recommend.
Howard offered another idea that you may never have considered: “Contact the local body shops of dealerships or others that you trust. See which companies they would recommend.” You can compare the consumer complaint ratios with what the body shop managers say. Clearly, this kind of research is more time-consuming than simply finding the lowest premium rate, but if you have a claim, you want to make sure that your vehicle is repaired correctly and completely with minimal hassle and that OEM (original equipment manufacturer) parts are used.

Howard, who is involved in an effort to create guidelines for the use of aftermarket parts, said that consumers should avoid them for the time being. “Right now, these parts are so incredibly inferior. Body shop managers will tell you which insurers are pushing aftermarket parts.” A March 12, 2001, I-CAN press release explains the protections consumers currently have in each state — it’s rather fortuitous to live in Minnesota, the only state that prohibits insurers from requiring the use of aftermarket parts.

3. Consider working with an insurance agent.
It used to be that everyone purchased their auto insurance from an agent, but now, companies like Amica, Esurance, Geico and others allow you to purchase insurance directly — over the phone from a customer service representative or online. Still, many of the major players have preserved their national networks of local agents — even if you use State Farm’s or Allstate’s Web site, you will still be assigned a local agent. Before we delve further, you should be aware there are two kinds of agents: (1) the captive agent who represents only one insurance company (AAA, Allstate, State Farm, and the like); and (2) the independent agent, also known as a broker, who represents several insurance companies (for example, Erie and Progressive are both sold through independent agents) and therefore does not have a vested interest in selling you a policy from one particular company.

Experts say that consumers who sign on with agents generally have an advantage during the claims process. “The agent has a vested interest in you being happy,” Sullivan said. “The claims representative has a general desire to keep you happy, but it’s not the same.”

Further, an agent can become familiar with your situation and guide you toward a suitable policy, Howard said. “Don’t rule out direct providers, but my personal preference is to have an agent, preferably an independent agent, write your policy for you…. An independent agent would become aware of less advantageous conditions with one company [and help you move to another]. You can change carriers without changing your agent. I encourage consumers to develop a relationship with their agent.”

The prospect of good working relations with an agent may help you to make a decision: When Heller purchased auto insurance for the first time, two insurers gave him similar quotes but he went for the slightly higher one because the agent had been highly recommended by a friend. “You shouldn’t go direct without always checking out other options,” he said. “[...But] never feel pressured by a broker or an agent. Take the time to talk with an agent or a broker as well as do your online research. You may not need an agent — you may find a better deal with a company that operates direct.”

Independent agents may charge a fee for their services, but you may be able to negotiate. You should agree upon any fee in writing before making a purchase. Look for agents who are certified by Independent Insurance Agents of America (Big “I”) or PIA (Professional Insurance Agents).

4. Check out the financial strength ratings for the companies that interest you.
Refer to the A.M. Best and Standard & Poor’s ratings. Both companies publish financial strength ratings for all insurance companies — these “measure” an insurance company’s ability to pay out a claim. The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company’s solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating.

The Standard & Poor’s ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) and NR, which means ‘not rated’. The letter grades might be modified by a + or – mark. Consider only those companies that have at least a BBB rating. Insurance companies often provide this information on their Web sites, but if not, you can run a search at the A.M. Best and Standard & Poor’s sites. Keep in mind that these ratings have nothing to do with the way an insurance company treats its customers.

5. Skim J.D. Power and Associates’ auto insurance ratings.
Another basic resource is J.D. Power and Associates’ auto insurance ratings. Two of the top insurers in the study, Amica and Erie, are also companies that Howard recommends: “Erie is sold by independent agents, who are very knowledgeable about the product. I like their claims handling approach. Almost all other companies look at a claim and find a way to not pay it. Erie and Amica will look at it and try to find a way to cover it.”

6. Don’t assume that affinity programs have your best interests at heart.
Sometimes auto insurers will team up with an auto manufacturer, union, trade association, or other entity to offer a select group of people insurance policies at a discounted rate — this is known as an “affinity program.” For instance, Ford owners can get a special rate through The Hartford. Don’t assume that such an insurance company will provide superior customer service — research these as rigorously as you would an unaffiliated company.

“You do get a bit of a premium break, but I would still say go to consumer complaint ratios at your state’s department of insurance Web site,” Howard advised. “It has been my experience that insurance companies that enter into third-party mass-marketing programs are lacking when it comes to service.”

7. If insurers won’t treat you right, contact your legislators.
It’s not always easy to find affordable, reliable car insurance, particularly if you don’t make a lot of money and live in an urban area. Your state’s legislators, of course, are the people who require you to purchase insurance in the first place (unless you live in New Hampshire, Tennessee or Wisconsin). Contact these officials if you can’t find a policy that you can afford or if your current insurer has treated you unfairly during the claims process.

“Particularly for low-income consumers,” Heller noted, “auto insurance is too expensive relative to their income to even think about…. We urge motorists to get some coverage but also to let their elected officials know that they’re having trouble finding affordable insurance.” Heller was the leading advocate behind the implementation of the Lifeline Auto Insurance Plan, a pilot program in California that makes affordable auto insurance available to low-income residents of Los Angeles and San Francisco counties (areas that typically have astronomical insurance rates) with good driving records. The program was possible only because “low-income motorists let lawmakers know that 80 percent of the people in their neighborhood were uninsured,” he said.

So, you’ve done your research, and you’ve decided on a company. Before you sign, though, read the policy. In addition to verifying that it contains the coverage you want, there are two clauses that you should look for in the contract:

1. Retain your right to sue.
“Find out if you are giving up your right to go to court and will be forced into arbitration if there is a disagreement [between you and the insurance company],” Heller advised. “You’re much better off if you don’t give up this right…. It makes it easier for [insurers] to take advantage of you.” If you find a clause to this effect, all isn’t necessarily lost. “At least in theory, a contract is a mutual agreement, so you should be able to cross out that line in the policy,” Heller said. If the company won’t agree to the policy sans clause, then you should probably take your business elsewhere.

2. Avoid aftermarket parts requirements.
“If an insurance company has written in the policy that ‘new factory’, ‘like kind and quality’, or ‘aftermarket parts’ [may be used for body shop repairs], …go on to the next company,” Howard said. If you own a relatively new car that you plan to keep for a while, you will probably be much happier if you spend a little more time researching companies on the front end rather than try to fight the company when you have a claim.

After you lock in the insurance policy you want with the company you select, you have two more things to do. The first is to cancel coverage with your existing insurance company. Second, if your state requires you to carry proof of insurance, make sure you either have it in your wallet or the glove compartment of your car (some experts discourage this, however — if your car is stolen, the thief has everything he needs to prove the vehicle is his).

Now, there’s one last thing to do: reward yourself for saving so much money on your car insurance. Now it’s time to go shopping — real shopping.

You walk out to your car and it’s gone. Not your car itself, the navigation system or even your cell phone. The “it” is your catalytic converter. If you don’t happen to notice it right away, the moment you start your car, you will. The sound has been described as “a deep loud noise,” “an unmistakable roar,” and even like “a Harley Davidson.”

Dan McColl of Upland, California, remembers when it happened to him.

“When I got out of the gym, I started up my truck and it sounded like there was a hot rod in the parking lot,” said McColl. “In fact, I didn’t even think it was my truck at first. But when I cut the engine and it stopped, I knew that it was me. I was able to drive it, but it was like the gas wasn’t really engaging. I drove it to the mechanic and he was able to tell me right away that the catalytic converter had been stolen.”

The catalytic converter was mandated for all U.S. cars and trucks in 1975, to convert harmful pollutants into less harmful emissions before they left the exhaust system. Precious metals such as platinum, palladium, rhodium or gold are used as the catalyst. Depending on which metal was used, thieves can sell the converters to metal recyclers for $20-$200. The recyclers then extract the metal and resell it for as much as $6,000 an ounce, as in the case of rhodium. While national theft figures are not recorded for catalytic converter theft, the crime has risen in tandem with sharply rising metal prices.

The unfortunate vehicle owner will have to pay $1,000 or more for a replacement converter to be installed, depending on parts and labor charges. If the thief damages the vehicle’s wiring or fuel line in the process, the vehicle could be left in a dangerous state and cost far more to repair. If the thief steals your converter without causing additional damage, you should still be able to drive your vehicle, but you’ll need to install a replacement converter as soon as possible if the law still requires one. Ironically, during the writing of this article, a catalytic converter was stolen from a Toyota truck belonging to the brother-in-law of Edmunds.com Director of Vehicle Testing Dan Edmunds. The quote to replace it was $1,200, but because there is no smog testing program in the rural county in which he lives, he’s not sure he’ll replace it.

An Easy Grab and Go
Thieves can remove a catalytic converter quickly, often in less than two minutes, so theft can even occur in broad daylight. The only tools a thief needs are a wrench (for converters that are bolted on) or a reciprocating saw (for converters that are welded in). Some thieves bring a mechanic’s creeper. Then all they do is slide under the vehicle, remove the bolts holding the converter, and take it. Thieves can remove the unit within a minute or two.

Typically, catalytic converters are stolen from cars and trucks in driveways, strip malls or in parking garages. “Anywhere cars are exposed,” says Detective Abram Yap of the Long Beach Police Department.

The most commonly hit vehicles are SUVs and trucks, especially late-model Toyotas, because they sit higher off the ground (making for easier access) and the bolts that connect the converter are easily removed. Yap says his department has been seeing more Nissans targeted as well.

Rudy Espinoza, wholesale parts manager for Surf City Nissan in Huntington Beach, agrees, noting an uptick in requests from owners of older-model Nissan Frontiers. “It’s crazy,” he says. “We get calls, “How much is a catalytic converter? Mine was stolen!”

How To Prevent Catalytic Converter Theft
There are a few options that may help prevent this type of theft. Some mechanics suggest welding the heads on the catalytic converter bolts — or simply shearing them off.

The aftermarket has responded by designing products to deter and prevent catalytic converter theft. The idea behind such devices is that if it takes too long to make the steal, the thieves will move on to easier pickings. The CatClamp, for example, which starts at $150, is a hard-to-defeat cage installed around the catalytic converter. This product can be installed by a mechanic or at home with an included specialized tool and is backed by a money-back guarantee.

While most owners don’t give much thought to their catalytic converter, those with vehicles high off the ground might want to think twice. It’s always wiser to park in well-lit or protected public parking lots, and to park your car in your home garage if possible. Owners whose vehicles have easy clearance underneath might want to take it a step further with an aftermarket product. Taking these precautionary measures will hopefully deter thieves and keep your car running smoothly.

Disclosure: Detective Abram Yap is the author’s husband and helped contribute to this story.

Introduction
The following simple steps will help you determine how much car insurance you need to carry. And it will also help you get the best coverage at the lowest price. If you are confused about any of the terms we use, be sure to review the glossary in “Little-Known but Important Insurance Issues.”

Step 1: Starting Out
When it comes to auto insurance, you want to be adequately covered if you get in an accident but you don’t want to pay any more than you have to. So how can you navigate your way through this murky subject?

Keep telling yourself there is money to be saved. How much? Hundreds, even thousands, per year. For example, one of our editors typed all of his insurance information into a comparative insurance service. The quotes (for very basic coverage on two old cars) ranged from $1,006 to $1,807 — a difference of $801 a year. If you’re currently dumping thousands into your insurance company’s coffers because of a couple of tickets, an accident or a questionable credit rating, shopping your policy against others may be well worth the effort.

Look at it this way — you can convert the money you save into the purchase of something you’ve desired for a long time. Hold that goal in your mind.

Step 2: How Much Coverage Do You Need?
To find the right auto insurance, start by figuring out the amount of coverage you need. This varies from state to state. So take a moment to find out what coverage is required where you live. Make a list of the different types of coverage and then return for the next step. (You will find a list of each state’s requirements and an explanation of the various types of insurance in “How Much Auto Insurance Do You Really Need?” Also, check out “Little-Known but Important Insurance Issues” as it has a glossary of basic insurance terminology.)

Now that you know what is required, you can decide what you need in addition. Some people are quite cautious. They base their lives on worst-case scenarios. Insurance companies love these people. That’s because insurance companies know what your chances are of being in an accident, and how likely it is for your car to be damaged or stolen. The information the insurance company has collected over previous decades is crunched into “actuarial tables” that give insurance adjustors a quick look at the probability of just about any occurrence.

So how much insurance should you buy beyond your state’s minimum?

Experts recommend that if you have a lot of assets you should get enough liability coverage to protect them. For instance, if you purchase $50,000 of bodily injury liability coverage but have $100,000 in assets, attorneys could go after your treasures in the event of an accident in which you’re at fault and the other party’s medical bills exceed $50,000.

General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don’t buy excess coverage.

Another issue to consider is that the limits of any uninsured and/or underinsured motorist coverage that you purchase cannot exceed the limits of your liability coverage. Such coverage, he said, can be valuable, as it will cover lost income if you’re out of work for several months after being injured in a major accident.

Your driving habits may also be a consideration. If your past is filled with crumpled fenders, if you have a lead foot or a long commute on a treacherous winding road, then you should get more comprehensive coverage. Keep in mind that you don’t have to buy collision and comprehensive coverage. If your vehicle is older, if you have a good driving record and if there is a low likelihood that it would be totaled in an accident, but a high likelihood of it being stolen, you could buy comprehensive but not collision.

Step 3: Review Your Driving Record and Current Insurance Policy
Before you begin shopping for insurance you should check the following: the status of your driving record, your current coverage and the premiums you are paying.

You should know how many tickets you have had recently. But time plays tricks and our memories repress painful incidents. If you can’t remember how long that speeding ticket has been on your record, check with your state’s DMV. If your record will soon improve, and the points you earned will finally disappear, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record.

Also, you should contact your auto insurance company or pull out a recent bill. Jot down the amount of coverage you have and what you are paying for it. Take note of the yearly and monthly cost of your insurance since many of your quotes will be given both ways. Now you have a figure in mind to try to beat.

Step 4: Solicit Competitive Quotes
Now that you have made several practical and philosophical decisions, it’s time to start shopping. Begin by setting aside about an hour for this task. Bring all your records — your current insurance policy, your driver license number and your vehicle registration. Drink plenty of coffee. Have a phone at your elbow. And, of course, power up your computer.

Begin with the online services. If you go to InsWeb.com or other online insurance quote sites, you can type in your information and get a list of comparative quotes. These forms take about 15 minutes to complete. If this bores you, just remind yourself how much you will be saving and that you can use the money to buy something nice for yourself. If the entire shopping process takes you two hours to complete and you save $800, you’re effectively earning $400 an hour.

A few things to keep in mind: 1) When you use quote sites, you may not get instant quotes. Some companies may contact you later by e-mail, and some that are not “direct providers” may put you in touch with a local agent, who will then calculate a quote for you. (A “direct provider,” like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We’ll discuss the pros and cons of each later.) 2) It’s not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you’ll probably find it faster to pick up the phone, since most insurers in this state currently don’t provide online quotes.

You can also try getting quotes from some of the insurance companies listed on the Edmunds.com Web site — Liberty Mutual, Geico or Progressive. These forms will take about 10 minutes each to complete.

Step 5: Record and Compare Quotes
While you’re researching companies, make notes in a separate computer file or on a piece of paper divided into categories. This will keep you from duplicating your efforts. When you visit the different online insurance sites, you should take note of several things:

• Annual and monthly rates for the different types of coverage — make sure to keep the coverage limits the same so that you can make “apples-to-apples” comparisons
• An 800 number to call for questions you can’t get answered online
• The insurance company’s payment policy (When is your payment due? What happens if you’re late in making a payment?)
• Discounts offered by the insurance company that pertain to you
• The insurance company’s consumer complaint ratio from your state’s department of insurance Web site (more on this later)
• The insurance company’s A.M. Best and Standard & Poor’s ratings (more on this later)

Step 6: Work the Phones
Once you have exhausted your online options, it’s time to work the phones. Those companies you haven’t been able to get an online quote from should be contacted. At times, doing this process verbally can actually go faster than the online counterpart, providing you have all the information regarding your driver license and vehicle registration close at hand. When you get a quote, be sure to confirm the price. Also, ask them to fax or e-mail the quote to you as a record.

Step 7: Look for Discounts
While talking to the insurance companies’ telephone salespeople, make sure you explore all options relating to discounts. Insurance companies give discounts for a good driving record, favorable credit score, safety equipment (for example, antilock brakes), certain occupations or professional affiliations and more. For more guidance in this area, check out “How to Save Money on Auto Insurance.”

Step 8: Choosing the Right Insurance Company
You now have most of the information in front of you that you need to make a decision. However, there is something more to consider. You can clearly see which company is least expensive, but when you need them to cover a claim, what kind of job will they do? To put it another way, which is the most reliable insurance company?

Below, we offer a number of issues to guide your thinking and help you reach a decision:

1. Visit your state’s department of insurance and check consumer complaint ratios and basic rate comparison surveys.
2. Get in touch with local body shops or dealerships you trust and ask which insurance companies they recommend.
3. Consider contacting an insurance agent for additional information about a particular company.
4. Check out the financial strength ratings for an insurance company by referring to the A.M. Best and Standard & Poor’s ratings.
5. Look over J.D. Power and Associates’ consumer satisfaction surveys reviewing auto insurance companies.

Step 9: Review the Policy Before You Sign
So, you’ve done your research, and you’ve decided on a company. Before you sign, though, read the policy. In addition to verifying that it contains the coverage you want, there are two clauses that you should look for in the contract:

1. Retain your right to sue. “Find out if you are giving up your right to go to court and will be forced into arbitration if there is a disagreement [between you and the insurance company],” one expert advised. “You’re much better off if you don’t give up this right…. It makes it easier for [insurers] to take advantage of you.” If you find a clause to this effect, all isn’t necessarily lost. “At least in theory, a contract is a mutual agreement, so you should be able to cross out that line in the policy,” he said. If the company won’t agree to the policy sans clause, then you should probably take your business elsewhere.
2. Avoid aftermarket parts requirements. If an insurance company has written in the policy that “new factory,” “like kind and quality” or “aftermarket parts” may be used for body shop repairs, go to another company, one expert advised. If you own a relatively new car that you plan to keep for a while, you will probably be much happier if you spend a little more time researching companies on the front end rather than try to fight the company when you have a claim.

Step 10: Cancel Your Old Policy
After you lock in the insurance policy you want with the company you select, you have two more things to do. The first is to cancel coverage with your existing insurance company. Second, if your state requires you to carry proof of insurance, make sure you either have it in your wallet or the glove compartment of your car (some experts discourage this, however — if your car is stolen, the thief has everything he needs to prove the vehicle is his).

Now, there’s one last thing to do: reward yourself for saving so much money on car insurance.

Checklist

• Determine your state’s insurance requirements.
• Consider your own financial situation in relation to the required insurance and consider buying more to protect your assets.
• Review the status of your driving record — do you have any outstanding tickets or points on your driver license?
• Check your current coverage to find out how much in premiums you are paying.
• Get competing quotes from an Internet insurance Web site such as InsWeb.com, YouDecide.com and InsureOne.com.
• Make follow-up phone calls to insurance companies to get additional information about coverage.
• Inquire about discounts you might qualify for such as a multiple policy discount.
• Evaluate the reliability of the insurance company you’re considering by visiting your state’s insurance Web site.
• If you have chosen a new insurance company, remember to cancel your old policy.

You’ve got your auto lease deal all set when it hits you: “What happens if this car gets into an accident?”

Technically, the car still belongs to the manufacturer or leasing company. But, you’re still responsible for replacing it.

That’s right. Even after your auto insurance company figures out how much the car is worth and pays off the damage, you may still owe the carmaker some dough. And that’s where gap insurance comes in.

Though it may sound trivial, gap insurance is a must for leasing. And if you made a small down payment when buying a car, a gap policy can be a lifesaver as well. But first, let’s look at why it exists.

As the name implies, gap insurance covers what traditional car insurance doesn’t. In other words, it closes the gap between what your auto insurance company pays if your car is stolen or totaled and what you owe the finance company.

Let’s take a test case. Say you bought your car two months ago for $25,000. You begin making car payments at about $500 a month based on a 6-percent interest rate. Then, disaster strikes: a tree falls on your car and flattens it.

You call the auto insurance company and the adjustor looks into his crystal ball and decides at the time of the accident your car was worth only $20,000. The car may only be a couple of months old, but it has already lost 20 percent of its value. Unfortunately, the finance company still wants the full amount you owe them. With interest, tax and license fees, they figure that to be $27,000.

Yikes! There’s a gap of $7,000 between the $20,000 that the insurance company is willing to pay you and the $27,000 the finance company is demanding. Most folks are going to be eating Spam dinners for the next two years, but if you have gap insurance you can safely order steak.

Apply the same scenario to someone who bought their car. If they left the dealer lot without putting several thousand dollars down, they likely owe more than the auto insurance company will pay if the vehicle gets totaled or stolen in the first few years. Once again, gap coverage can save the day.

And that’s why gap insurance is a must for many drivers. In fact, gap insurance is usually mandated by lease contracts or included within them. If a gap policy is required but not included in your contract, you should shop around for this coverage (car insurance companies sell it). If gap coverage is included in the car lease, check to see how much is offered and how much you’re going to be paying for it. (In some cases, lease contracts may include what is known as a gap waiver, which protects you from gap charges in the event that the leased vehicle is declared a total loss — eliminating the need for a gap policy.)

Is gap insurance necessary for people who finance their cars? Well, it depends on your coverage. If your regular auto insurance policy is written to pay off the fully financed amount, then you don’t need gap insurance.

A few things to keep in mind when buying gap insurance:

• Although most people purchase it when a lease is initiated, some car insurance companies will sell you a gap policy anytime during the lease term.
• You must be in compliance with all terms of the lease.
• Your gap insurance policy may not be honored if you don’t have collision and comprehensive insurance coverage. Further, lease contracts generally require that you carry collision and comprehensive at all times.

If your car is totaled or stolen, carefully follow all requirements made by your auto insurance company. For example, some companies require you to continue making car payments on your totaled vehicle until the money from the gap insurance is paid out.

So when initiating a car loan or lease, always remember to ask your insurance agent or loan officer about gap insurance. If you have an accident, you’ll be glad you planned ahead.

By editors at Edmunds.com

You’ve just learned that your request for an auto loan with XYZ Bank has been denied. The loan officer explains that the decision has to do with your credit score. XYZ lends only to prime borrowers; your credit score, she continues, places you squarely in subprime territory.

Subprime. You’re not sure exactly what it means, but it sounds like a condemnation that will forever brand you as being somehow deficient to lenders.

However, being deemed subprime doesn’t necessarily mean that your borrowing days are over. It may still be possible for you to get that sought-after car loan (albeit from a different lender).

But first you need to understand the term that defines you. A subprime borrower is one with bad credit. Each lender has its own definition of what constitutes a subprime borrower, but typically, a credit score of less than 620 lands you in this less-than-desirable category. For more information on credit scores, and what sort of factors cause them to suffer, please see Credit Scores Demystified and Understanding Your Credit Report.

There are plenty of credit grantors specializing in subprime lending who are eager and willing to loan money to those with bad credit. Naturally, though, there’s a catch. The interest rates for subprime borrowers are frequently quite steep — significantly steeper than those paid by their more credit-worthy brethren.

So, now that you understand what your playing field looks like, how can you finesse the game in a way that gets you a reasonably priced car loan? Here are a few tips:

• Check your credit report. Make sure that everything on your report is accurate; it could be that information has been entered in error, and that your credit history is a lot less blemished than you’ve been led to believe. If you do find information on your report that is inaccurate, you need to address it right away. Contact the credit bureaus in writing, listing your name and address and clearly detailing the nature of the error.
• Access your credit score. For a long time, credit scores were available only to prospective lenders, who used them to evaluate those seeking loans. That has changed; it’s now possible for consumers to access this all-important number. Your score is available online from each of the three credit bureaus: Trans Union, Experian and Equifax. If you’ve got bad credit, it’s helpful to know it beforehand. Knowing your credit score will help give you a sense of exactly where you stand in your search for an auto loan.
• Don’t rely on the dealer. Dealers take a cut of all car financing deals they land; as a result, any loan that they’re able to get you with a bank or financing company is likely to wind up being more costly to you than if you had contacted the lending institution on your own. Ideally, you’ll want to secure your auto loan before setting foot inside the dealership.
• Shop around. Rates will vary from lender to lender; take the time to look around and see what deals are available. Lenders typically define their business according to credit tiers (A, A- and so on.); speak with loan officers regarding how each tier is linked to credit score and interest rate. Ask for a matrix detailing the tiers and their implications; having something in writing from each lender will make it easier to compare your options effectively. If you have a checking account, make sure to include your bank in your search for a loan. Many banks have entire departments dedicated to providing loans to those with flawed credit, and they tend to look more favorably upon applicants who are current clients. Your credit union is also a good place to turn. For years, credit unions have had a reputation of lending only to members with good credit, but that’s begun to change. Many are now beginning to expand their business to include those with less-than-perfect credit.
• Remember that your credit score is malleable and ever-changing. When it comes to your credit history, the ball is entirely in your court. You can improve your bad credit by paying your bills on time, and not overextending yourself when it comes to loans and credit cards. With proper attention paid to the state of your credit, you could conceivably hoist yourself out of subprime territory in as few as two or three years. Going forward, check your credit score at least once annually. You may have to pay more than you’d like for the auto loan you’re about to receive, but in a couple of years, if your credit score has improved, you’ll probably be able to refinance your loan at a much lower rate.

If you are looking for a good deal the next time you buy or lease a new or used car, you should do your own car finance calculations ahead of time. Then, when you get to the dealership, your numbers should agree with theirs.

Edmunds.com has created a powerful and flexible suite of calculators that performs the calculations you will need if auto financing is on your agenda. However, there are times when you are away from your computer or just want a more hands-on approach to handling the numbers. Here’s how to do several calculations you might need when figuring the cost of your car:

How to Figure Sales Tax
Often, car payments are quoted without including the tax and licensing fees. This extra expense can come as a nasty shock later on. So take a moment to figure out what they will be before you go to the dealership.

If you are considering buying a car for $20,000, make sure you know what all the options cost and add on the “destination fee” (all cars include a destination fee, typically between about $300 and $600). Once you have this total, find out what your state’s sales tax is. If it is 8 percent, convert this to a decimal number by adding .0 in front of the number. So 8 percent becomes .08. Now use the following formula:

Cost of the car + options + destination fee X sales tax
In the example, let’s say that the car is $20,000 and the options total $600. The destination fee is $495.

$20,000 + $600 + $495 = $21,095
To get the sales tax, multiply this by .08:

$21,095 X .08 = $1,687.60
Added to the cost of the car, we arrive at the grand total of $22,782.60.

How to Figure Title and License Fees
Car dealerships are often vague about the DMV fees charged to a customer because there are many separate fees — most of them small and seemingly insignificant. However, these fees do add up, and you should budget for them ahead of time. You won’t be able to compute these fees to the penny, but you should get an idea of what they will cost you.

In most states, the DMV fees are between 1 and 1.5 percent of the purchase price of the car. (In the second and ensuing years, these fees drop, and then, later, level off.)

To get the DMV fees for our example car, go back to the cost of the car + options + destination fee. Now multiply this by .01 or, if you’re the conservative type, .015.

$21,095 X .015 = $316.43 for DMV fees
Now we see that the $20,000 car has climbed to $23,099.02 once the sales tax and DMV fees have been added. Are you sure you can afford that car you’re eyeballing?

Figuring Auto Loan Payments
Interest on the auto loan has to be computed using a complicated calculation called “amortization.” Edmunds.com has created a calculator that can perform this calculation for you so you can arrive at your accurate monthly payment for the car loan.

For more information about how to use these financial calculators, read Take Control of the Numbers.

Figuring Car Lease Payments
You can calculate your car lease payments as long as you have certain figures such as the residual value and the interest rate (in leasing, the interest rate is expressed as a multiplier called a “money factor”). A complete explanation is given under Edmunds Do-It-Yourself Leasing Guide. Again, these calculations are complex and can quickly be performed by the Edmunds’ lease calculator. However, if you would like to manipulate the data yourself, we’ve copied the formula below for you adventurous types:

1.	Sticker Price of the car plus options		$23,000
2.	Times the residual value percentage	X	..57
3.	Equals the residual value	=	$13,110
4.	Invoice price of car minus incentives (net capitalized cost)		$20,000
5.	Minus the residual (From line 3)	-	$13,110
6.	Equals the depreciation over 36 months	=	$ 6,890
7.	Depreciation (Line 6) divided by term in months	÷	36
8.	Equals the monthly depreciation payment	=	$ 191.39
9.	Net capitalized cost (From line 4)		$20,000
10.	Plus the residual (From line 3)	+	$13,110
	Equals	=	$33,110
11.	Times the money factor	X	.0037
12.	Equals money factor payment portion	=	$ 122.51
13.	Monthly depreciation payment (from line		$ 191.39
14.	Plus money factor payment portion (from line 12)	+	$ 122.51
15.	Equals bottom monthly lease payment	=	$ 313.90

The 2010 Toyota RAV4 ranks 2 out of 22 Affordable Compact SUVs. This ranking is based on our analysis of 68 published reviews and test drives of the Toyota RAV4, and our analysis of reliability and safety data.

More than 10 years after it was first introduced, the RAV4 continues to shine for its excellent combination of power, performance and interior comfort.

The RAV4, last redesigned in 2006, is one of the most well-rounded vehicles in its class. It boasts an affordable base price, excellent fuel economy and a long list of accolades. For 2010, it’s one of Kelley Blue Book’s Best Resale Value award winners. Car and Driver selected it as one of its 5 Best Trucks in both 2007 and 2008, and IntelliChoice gave the 2007 model an award for “Highest Retained Value” in its class.

The RAV4 is consistently compared to the Honda CR-V, which comes with a nearly identical base price, but worse fuel economy. A big plus for the CR-V, however, is its better-rated interior and easier-to-use tailgate design. The RAV4’s cargo door swings to the right, which can make loading and unloading difficult. Apart from that, the RAV4 bests the CR-V on nearly all fronts. It boasts V6 power and an optional third-row seat, both rare features within the compact SUV class. Several reviewers also prefer the RAV4’s refined exterior to the CR-V’s awkward front grille.

Of course, the RAV4 isn’t perfect. Reviewers warn that options, including the V6 engine and third-row seat, can quickly inflate its otherwise affordable base price. And though its fuel economy is good, it’s not the best in its class — the two other gasoline-powered SUVs in the RAV4’s price range, the Chevrolet Equinox and Jeep Patriot, net more miles per gallon. Still, the RAV4 continues to be Toyota’s best-selling SUV, even in the economic downturn.

High demand and high resale value for the RAV4 may make it difficult to negotiate a great deal, but be sure to check for current Toyota Deals that may be available. Since it’s unchanged for 2010, buyers should consider the 2009 model, which may be available at a discount as dealers try to make space on their lots for the new models. Also note that the RAV4 will continue in its current design for a while — its next redesign is expected in 2012.

The RAV4 comes in a base model, performance-oriented Sport and top-of-the-line Limited. All-wheel drive is optional. Since the 2009 and 2010 RAV4 are nearly identical, this review uses research from both model years.

• “Available with the most powerful engine in the compact-SUV class, seating for seven, and impressive cargo room, refinement, and road manners, RAV4 is an easy choice. Toyota’s reputation for resale value is another asset.” — Consumer Guide
• “Spacious, comfortable and easy to drive, the 2009 Toyota RAV4 is a top pick for a crossover SUV, especially if you want a V6 or a usable kid-size third-row seat.” — Edmunds
• “The RAV4’s combination of compact size, plentiful and practical interior space, excellent powertrains, solid and substantial feel, and fine road manners makes for a sensible real-world SUV. The fact that pricing starts at barely over $20 grand is just icing on the cake.” — Car and Driver
• “The RAV4 is among the most versatile compact crossover-type SUVs.” — Truck Trend
• “It’s very much in tune with what buyers now expect from any new utility. That is the biggest possible versatility in the smallest, most efficient package possible.” — Motor Week
• “There is a lot to like about the 2009 RAV. Its size makes it a great errand runner, even if the rear cargo door opens from the wrong side for a U.S. audience. There is the Toyota promise of quality construction and long life. Plus, if you can hold the line on options, you can get one for a reasonable price.” — MarketWatch

The 2010 Nissan Versa ranks 15 out of 29 Affordable Small Cars. This ranking is based on our analysis of 66 published reviews and test drives of the Nissan Versa, and our analysis of reliability and safety data.

Considering that it is one of the least expensive cars in its class, the Nissan Versa is a good choice for its spacious cabin and excellent handling dynamics. That said, it falls far short of class competitors in its list of standard safety and interior features.

With a base MSRP of around $10,000, the 2010 Nissan Versa is a serious contender for the position of least expensive affordable small car on the market. However, although such a low price may sound like a good deal, you get what you pay for. While the Versa is praised for its soft-touch interior materials, roomy back seat and versatile cargo space, the base model has fewer standard features than almost any other car in its class. Even basics like power doors and windows require an upgrade to a higher trim and purchase of the power package for around $700. Moreover, safety features like anti-lock brakes — which are standard on most models now — are only optional on the base Versa.

The Versa is a good competitor in the affordable small car class once you upgrade to the hatchback model and add a few package options. Realistically though, once you do that its appealingly low price is no longer so low — it increases to between $14,000 and $16,000. While this is still considered a low price for the class, there are definitely other options that cost less and are worth more.

The Kia Soul has a lengthy list of standard features that challenges that of even some upscale small cars as well as a laudable list of standard safety features. Its base price is around $13,300 — a leap from the base price of the Versa, but comparable once the two are similarly equipped. . Another model worth a look is the Honda Fit, a hot hatch that also has a higher base MSRP than the Versa ($14,900). It’s a reviewer favorite for its long list of standard features, versatile cargo space and zippy ride. Finally, the Toyota Yaris is worth a look. It has a low starting price of only $12,355 and a list of standard safety features that trumps almost every other car in the class.

If these models aren’t exactly in your budget, you might want to consider buying an earlier model year or perhaps even a used car. Little has changed about the Versa for 2010, so savvy car buyers may be able to snag a deal on a 2009 model as dealers make room on their lots for the 2010s. Be sure to check out this month’s Nissan Deals.

The Versa comes as a sedan or hatchback. The sedan comes in four different trims, including the 1.6 BASE, 1.6, 1.8 S and 1.8 SL. The hatchback comes in two trims: the 1.8 S and 1.8 SL.

• “Versa is priced like a subcompact, but its blend of room, comfort, and refinement are an easy match for any number of more-expensive compact cars. Acceleration is modest, but that’s balanced by good road manners. All in all, Versa is a must-see.” — Consumer Guide
• “Bottom line, the Nissan Versa is a big small car with comfort, performance and versatility. It’s roomy and offers good fuel economy.” — New Car Test Drive
• “Fit and finish, both inside and out, exceeds the norm for this segment.” — Left Lane News
• “For all the exciting, uniquely styled vehicles Nissans sells, the 2009 Versa isn’t one of them. This is a car that looks plain, drives plain and just generally emotes plain. It makes vanilla seem spicy and an Amish girl look like Amy Winehouse.” — Edmunds
• “Versa is short for “versatility,” which the hatchback version exudes best. One of the roomiest in its class, the Versa also supplies good power in this category, as well as fuel thrift and low prices. A six-speed manual gearbox and a load of standard safety features are all positives.” — Car and Driver

Versa Performance – 7.2 (Good)

No one expects the 2010 Nissan to possess the speed of a Porsche or the handling capabilities of a BMW, but for such an inexpensive car, it’s pretty fun to drive. “For a basic economy car with no overt performance pretension, Versa is nimble and fun to drive,” says Consumer Guide.

Versa Exterior – 7.1 (Good)

While reviewers seem to like the styling of the 2010 Versa hatchback, they say that the sedan probably won’t turn many heads. Kelley Blue Book is neither exceptionally critical nor particularly fond of the Versa’s styling, saying simply, ”The tidy Versa succeeds at not being boxy or bland.”

Versa Interior – 8.6 (Very Good)

The automotive press is quite impressed with the 2010 Versa’s interior materials quality, versatile cargo space and especially its roomy rear seat.  Nonetheless, the base model is lamentably Spartan — lacking even power doors and windows — and the front seats, while adequate, fall behind some class competitors. Speaking about the lack of any sort of audio system in the base model, Motor Trend says, “Eventually you start to whistle quite a bit, and finally, pathetically, rolling the window down at stoplights to steal fleeting sounds from other cars’ radios. I ask you, is $10,000 worth this?”

Versa Safety – 9.2 (Excellent)

The 2010 Nissan Versa scores high in government crash testing and was named a “Top Safety Pick” by the insurance industry. Reviewers are pleased that certain safety systems have been added as options on higher trims but wish they were standard on all models. Consumer Guide says, “Kudos to Nissan for making traction control and an antiskid system available on Versa. We wish, however, these important safety features were standard on all models, rather than only on the top-end SL and optional on the S.”

Versa Reliability – 5.0 (Mediocre)

The 2010 Nissan Versa reliability score shown is the Predicted Reliability rating provided by J.D. Power and Associates. This score is based on trending the past three years of historical initial quality and dependability data from J.D. Power’s automotive studies, specifically the Vehicle Dependability Study (VDS) and the Initial Quality Study (IQS). The 2010 Nissan Versa comes with a three-year or 36,000-mile limited warranty.

The 2010 Nissan Frontier ranks 2 out of 8 Compact Pickup Trucks. This ranking is based on our analysis of 47 published reviews and test drives of the Nissan Frontier, and our analysis of reliability and safety data.

The Nissan Frontier is known for its rugged construction and comfortable on-pavement performance, something that can be hard to come by in a compact pickup. A long list of safety features and interior options helps the Frontier sail by most of the competition.

Motor Trend says, “The Nissan Frontier has been a solid contender in the midsize-truck segment since it was introduced over a decade ago. Not a whole lot has changed for the Frontier over the years, but then, not a lot has needed to change.” All in all, the Nissan Frontier makes sense for compact pickup buyers who are look for a little comfort alongside their truck’s capability. As an added bonus, the Frontier can be optioned into a fast performance truck or capable off-road machine. Though a few reviewers complain about the interior materials, most agree that any compact pickup truck buyer would do well to give the Frontier serious consideration.

While the Frontier wins plenty of good reviews from the press, perhaps the biggest complement comes from a rival manufacturer: Suzuki sourced its Equator pickup from the Nissan Frontier, proving that imitation is the sincerest form of flattery. However, that flattery may throw a wrench into Nissan’s sales. Since the Equator is pretty much the same as a Frontier, but Suzuki sales are much lower than Nissan’s, buyers may be able to negotiate a better deal on the Equator.  Even more important, the Equator offers a longer warranty than the Frontier. If you’re not picky about the badge your truck wears and you like the Frontier, you might save some money at the dealership and down the road by opting for the Equator.

Buyers should also check out the class-leading Toyota Tacoma.  While its looks aren’t as rugged as the Frontier’s, and it reviewers don’t praise its performance as much, it does start at about $2,000 less than the Frontier. Some reviewers also say it offers a nicer interior.

The 2010 Nissan Frontier has two cab styles, though both have four doors.  The King Cab is slightly smaller and is available in four trims — the base XE, SE, Pro-4X and LE. The Pro-4X is the trim of choice for buyers looking to take their trucks off-road. The Crew Cab is available in three trims — the SE, Pro-4X and LE.

In 2009, the Frontier got a slight refresh, but is largely unchanged for 2010.  That means that savvy buyers could get a deal by opting for the 2009 model instead of the 2010. Also, check out our Nissan deals to see what discounts and incentives are available on a new Frontier.

Frontier Performance – 8.9 (Very Good)

When it comes to performance, few competitors can match the Frontier, which offers plenty of power and a comfortable ride. Four Wheeler notes, “This is an amazingly nimble package for a pickup … the awesome drivetrain leaves the competition and some larger trucks in the dust.”

Frontier Exterior – 8.5 (Very Good)

The Nissan Frontier looks good. According to the Washington Post, the Frontier “has the demeanor of a physically fit young man who has enough money, time and sense of adventure to do and go where he wants when he wants.”

Frontier Interior – 8.0 (Very Good)

Despite complaints about cheap materials, most reviewers feel the Nissan Frontier’s interior is good enough for the class.  ”As is common in Nissans, the cabin is well designed, but materials are cheap,” writes Automobile Magazine.  That’s pretty typical for a compact pickup.

Frontier Safety – NA

The Frontier performs well in federal government and insurance industry crash tests, and comes equipped with a wide array of active and passive safety features — including electronic brake force distribution and an energy absorbing steering column. New for 2010 are standard side-curtain airbags for all models, and stability control on V6 models.

Frontier Reliability – 6.0 (Mediocre)

The 2010 Nissan Frontier reliability score shown is the Predicted Reliability rating provided by J.D. Power and Associates. This score is based on trending the past three years of historical initial quality and dependability data from J.D. Power’s automotive studies, specifically the Vehicle Dependability Study (VDS) and the Initial Quality Study (IQS).  Nissan provides a limited warranty for the first three years or 36,000 miles.