The auto insurance premiums are getting sky high every time I get a bill from them. According to the National Association of Insurance Commissioners the average amount spent on auto insurance went from $691 in 1996 to $829 in 2005. That is almost a 20% increase. If the auto insurance companies keep going at this rate, in 20 years we'll be paying almost a thousand dollars.

Thinking about this made me feel a lot better about my arrangement with my insurance company. I save almost 75% on my policy by simply having an alternative plan.

My policy with Progressive auto insurance company is a simple liability only policy. It will cover the damage of personal property of the other party in an accident. It will also cover medical bills for any injuries of the other party. The way I set it up is, I will get nothing in the event of an accident. The repairs will not be paid for by the insurance company, I will have to pay for it my self.

I have had a few accidents in my past and they were minor. Knowing how to repair my own car ofcourse helped but it is not necessary. You simply need to have a plan.

First you need to put away from $3000 to $5000 onto savings as your own insurance. I personally think $2000 to $3000 should be plenty. You can also use a credit card if you need to but it's better to have cash available.

Then you will get a liability only policy from your auto insurance company. This policy should cost you from 50% to 75% less than the full coverage.

Next is you need to get some contacts. To find a auto body specialist/do-it-yourself-er you will need to visit your local auto body supply store. It is better if it is a locally owned store, this way they will have good local contacts that are not pricey. Ask them if they know any body men, anyone they can recommend. Meet them and see their work. Find out the prices. This way you will know ahead of time what to expect in case of an accident.

Do the same for a mechanic, visit a local auto parts store and ask around. Even people in line.

After you do a little bit of research and spend some time getting your contacts together, you will realize how much money you will save in the long run.