Whether you’ve already purchased car insurance for young drivers or you are getting ready to start looking, one of the best things you can do to obtain the lowest possible insurance rates is to improve those things that car insurance companies look at when they calculate your insurance premium.  There are several things you can do in the short term to improve your insurability standing, and there are also things you can do over the long term to improve it as well.

Improve Your Credit Score
Most car insurance companies now consider your credit score when determining your premium.  Insurers have decided that there is a correlation between your credit history and potential insurance claim behavior.  While age, vehicle, driving history, and location all still have an effect on your premium, credit history can also have an impact.  Depending on your personal credit score, this can be a good thing, or it can be a bad thing.
Regardless, now more than ever it is important to make sure that you have a healthy credit score so that you can obtain the lowest possible car insurance rates.  Paying all of your bills on time is obviously the simplest way to maintain a good credit score; however there are a number of items that insurers look at when calculating this score, including:

* Bankruptcy, foreclosures or collections
* Payment history of loans and bills
* Amount of time you've had credit
* How often you've recently applied for credit
* How many open lines of credit you have
* Type of debt you have
* Debt to credit ratio (how much you owe vs. available credit)

Taking all of these factors into account, we can quickly identify several ways that you can increase your credit score, and immediately obtain lower car insurance rates.

(1) Obtain a free credit report and fix any errors.
By law, you are entitled to a free credit report every year.  Simply contact one of the three major credit bureaus to obtain a copy.
Trans Union (www.transunion.com) at 1-800-888-4213
Equifax (www.credit.equifax.com) at 1-800-685-1111
Experian (www.experian.com) at 1-888-397-3742

Once you obtain a copy of your credit report, review it very carefully to make sure there are no invalid debts, late payments, or delinquencies listed.  If you find any errors, immediately report it to the credit bureau.  By law, if you report such an error, the credit bureau must investigate it and send you a response within 30 days.
Often, repairing an error on your credit report can significantly reduce your car insurance premiums.

(2) If you've applied for credit, wait to obtain car insurance.
Since recently applying for loans can adversely affect your credit score, you will drastically improve your chances of getting better insurance rates if you wait about four to six months after you've last applied for a loan or credit before purchasing car insurance.

(3) Reduce lines of credit by consolidating loans.
When it comes to credit score, having three credit cards with a balance of $5000 each isn't considered as favorable as having one card with a $15,000 balance.  Debt to credit ratio (your balance vs. your credit limit) is certainly a factor, but since the number of lines of credit is an additional factor, at least reducing your lines of credit to only one or two will improve your credit score.

(4) Change bad debt into good debt.
Credit score is significantly impacted by the amount of credit card debt that you have.  If you are running very large balances on your credit cards, consider transferring those balances to loans that are considered "good debt" such as home equity loans, or 401k retirement loans.

(5) Pay down your debt before applying for car insurance.
This sounds simple, but it's also the hardest to do.  Every year when tax time comes around and families receive a tax refund, we promise ourselves that we are going to at least devote a portion of that money to paying down debt.  All too often we end up spending the money on something else.  However, having the discipline to pay down your credit card debt will improve your debt to credit ratio.  This alone has one of the largest impacts on credit score than any other factor.

Taking action on one or all of these issues to improve your credit score will have a tremendous effect on the amount you eventually end up paying for your car insurance.  So take your credit score seriously and do everything you can do improve it immediately.

Take a Driving Class
One of the fastest and most effective techniques to drop car insurance rates for young drivers is also the one most people don't bother with - taking a Defensive Driving class.Most insurance companies offer reduced rates if you have taken a driver's education or defensive driving class.  For example, car insurance companies in 36 states offer premium discounts to graduates of the AARP Driver Safety Program (http://www.aarp.org/families/driver_safety/driver_ed/).The AARP program is a refresher program meant to help remind drivers of the rules of the road, and how to drive defensively and safely.  The best news is that AARP now offers the course online, so it is extremely convenient and there is no final test to pass.  The online course provides you 60 days to complete the course and provides a simple online registration procedure.  The course is only an 8 hour course, and many people complete it in one sitting.

Register here: http://www.aarp.org/families/driver_safety/driver_safety_online_course.html
Insurance info: http://www.aarp.org/families/driver_safety/driver_program/a2004-06-07-insurancediscounts.html

In many states it is mandatory for car insurance companies to provide discounts for drivers who take this course.  In other states, insurance companies do so voluntarily.  First check with the state bureau of insurance website (listed earlier in this guide) to determine if you live in one of these states.  If not, then check with your current, or potential, insurance company to learn if they offer this discount.  In either case, make sure you sign up and complete the course.  For the small fee and brief time it takes to complete the class - the cost benefits you receive from the car insurance savings will be well worth it.

Take College Classes, and Get Good Grades
Most insurance companies offer a "good student" discount.  This discount is typically offered to drivers less than 25 years of age enrolled in school full-time.  Keep in mind that this doesn't only apply to young college students.  Many young folks getting started in life assume that once they graduate from college, they no longer qualify for the "good student" discount.  This isn't the case at all - the discount applies to any person under 25.  This means that if the student decides to continue schooling, full time, for a graduate degree, they still qualify for the discount if they maintain the grades until they are over 25.

Fortunately, most insurance companies also offer a discount for individuals who reach the 25 year old milestone.

Drive Defensively
One thing that has the most impact on car insurance rates for young drivers is obviously your driving record.  This should be encouragement enough to watch your driving carefully.  Observe the speed limit, and drive as defensively as possible.  Ignore all situations that involve road rage with other drivers, and do everything humanly possible to avoid being in a situation that is high risk, such as drinking and driving, tailgating other cars, and speeding.