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5 Ways to Save Money on Car Insurance

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Car insurance -- no one likes paying for it, but when you need it, you'll be glad you bought it. You shouldn't have to pay an arm and a leg just to protect your car and your finances in case of an accident, though.

Saving money on car insurance is all about knowing the right moves. These five tips can help you start saving today:

1 - Compare Quotes

One of the worst mistakes you can make when it comes to car insurance is not comparison shopping. Most Americans are overpaying on auto insurance to the tune of $368 per year, mostly because they're not shopping around, according to a recent NerdWallet study.

Car insurance companies measure risk in different ways and there are few industry standards when it comes to what poses "risk." For example, moving just a few miles from your current location could affect the cost of your policy.

This means that it's critical to comparison shop for car insurance, and doing it just once isn't enough. Make it a habit to check car insurance rates once every year or two. It's also important to comparison shop every time there's a change in your marital status, location or traffic violations. These factors could affect how much you pay, and the only way to know if you're getting the best deal is to run a fresh search on the rates you qualify for.

2 - Find Good Discounts

There are lots of auto insurance discounts out there, but you have to know what you're looking for -- many insurance companies don't advertise all the deals they offer.

For example, if you have a high school or college student on your insurance policy, check whether your auto insurer gives a discount for good grades. Other common discounts are offered to members of the military, those with good driving records, those who have taken a defensive driving class, and those who have cars with certain safety features.

Again, it's important to specifically ask your insurance company about these deals, because they often won't ask if your circumstances entitle you to one.

3 - Bundle Your Coverage

One of the easiest ways to get a discount on your car insurance is to bundle your vehicle coverage with your homeowner's or renter's insurance. Nearly every major insurance company offers a premium discount to customers who buy multiple policies.

One of the main reasons that insurance companies offer this discount is to discourage customers from shopping around. Don't fall into this trap! Get the deal from your current insurer, but don't neglect to compare rates every year.

4 - Commit To Driving Less

One of the most frequently overlooked car insurance discounts out there is the low-mileage discount; car insurance rates are calculated based on your chances of getting into an accident after all. What's considered low mileage varies with each provider, but it usually falls between 7,500 to 15,000 miles a year.

You can reduce the miles you drive each year by biking and walking, or taking public transit, which will likely reduce your car insurance rates, too.

5 - Achieve and Maintain Good Credit

Car insurers look at a lot of information when deciding the cost of your premium, and many drivers forget or don't realize that credit is a factor. Achieving and maintaining good credit can help you get lower insurance rates.

If your credit could use a boost, focus on getting current with your bills and paying down your debts. Not only will these changes improve the interest rates you'll get on loans, you'll also likely see a decrease in your car insurance premiums.

The bottom line: Saving money on car insurance isn't as hard as it might seem if you keep these tips in mind. Comparison shopping and asking about discounts are most effective, but other steps also can help you save money.