Car safety features can save your life, but can they save you money?
Kevin McDonald

There it is in the showroom -- the car you've been looking for. It's a four-door sedan with a five-speed automatic transmission, reclining bucket seats, a CD player, a sunroof and a spoiler.

The dealer is offering -- for a couple hundred more -- anti-lock brakes, dual air bags and an anti-theft system with a remote keyless entry device. Should you bite? Part of the decision should depend on whether your auto insurer will give you a discount on your premium if you invest in these safety and security features.

According to the National Association of Insurance Commissioners in Kansas City, Mo., 13 states give discounts for safety and security features: Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Pennsylvania, Nevada and Rhode Island.

In Georgia, for instance, a car owner can get a discount of 5 percent to 20 percent if he has an anti-theft system. Florida offers discounts of 2 percent to 15 percent for an anti-theft system, air bags and anti-lock brakes.

"The insurer needs to ask what discounts are available before they purchase the car," says Dan McLaughlin, a spokesman for the Florida Department of Insurance in Tallahassee.

The coverage

Dave Hurst, a spokesman for State Farm Insurance in Bloomington, Ind., says discounts usually apply toward the comprehensive coverage portion of a policy, which pays for damages from theft or natural disasters. Auto accidents go under collision coverage.

Insurance companies provide discounts in some states for cars with safety and anti-theft features because they are less likely to be stolen or severely damaged in an auto accident. They are supposed to reduce the number of claims an insurance company has to pay.

Yet Hurst says, "[State Farm] doesn't give more discounts in more states because there has not been a showing that these devices by themselves bring down the number of claims."

How they work

Anti-lock braking systems became widely available only in the early 1990s. They were designed to prevent the wheels from locking and the car from swerving when a driver brakes hard.

The Insurance Institute for Highway Safety in Arlington, Va., says ABS has not performed as well as expected, primarily because drivers mishandle them. Many insurance companies, however, offer discounts to those who own ABS-equipped cars.

There are a variety of anti-theft systems that will also earn you discounts. They range from The Club, a thick metal bar that is braced across the steering wheel, to LoJack, a transmitter hidden in the vehicle, so it can be traced if it is stolen.

Other systems involve a key with an embedded computer chip, which prohibits the car from starting unless a specific key is inserted in the ignition.

Anti-theft systems

Today, safety and security devices are standard on many models.

For example, the 2000 Acura Integra, at $21,355, comes with an alarm system with an engine immobilizer, anti-lock brakes and dual air bags, according to the Kelley Blue Book, a guide to new and used-car prices. Some dealers still offer these features as options.

Although prices vary from dealer to dealer and from region to region, a consumer can expect to spend between $400 and $800 for a package that includes anti-lock brakes and an antitheft system. Air bags are standard in all cars and light trucks.

Let's say you live in Georgia, and the car you want costs $21,000. Adding on anti-lock brakes and an antitheft system raise the sticker price by $600, bringing the total cost to $21,600.

Drive it until the wheels fall off

According to the National Association of Insurance Commissioners, premium discounts begin at 5 percent and rise to more than 25 percent depending on the equipment purchase. Let's say your insurer will give you a 10 percent discount on your monthly comprehensive premium of $100.

That would immediately knock $10 a month off your premiums. You would have to pay cash for the options and drive the car for five years to break even. If you take a 48-month loan at 8 percent to buy the car and roll the cost of the options into the loan, it will take more than another year to break even because you will be paying $103.09 in interest on the $600 options bill.

Decide whether you expect to keep the car long enough to make your investment in safety options pay off. Also, consider whether you can bring down your premium some other way: through a good driving record, good grades in college, higher deductibles, and being 55 or older. Such things will not raise your car payment, and they'll keep you in the drivers' seat.

-- Posted: Nov. 3, 1999