1. Shop around

Car insurance rates can vary by hundreds of dollars per year between insurers for the same levels of coverage, so it's critical to shop around.

According to a InsuredCirle analysis, a good driver with good credit can save more than $100 per month by finding the cheapest insurer rather than the most expensive in the state.

Savings can be even greater for drivers with bad credit or who have recently been in an accident. By selecting the cheapest insurer rather than the most expensive, these drivers could save more than $200 per month on average.

According to our analysis, which compared sample rates for 40-year-old drivers purchasing a full-coverage policy, rates from a state's cheapest widely available insurer are less than half of rates from the priciest one.

However, the company with the lowest rates in one state may have the highest rates in another. Furthermore, the cheapest company for a good driver with good credit may not be the cheapest for someone with bad credit or a recent accident.

Get quotes from several companies once a year to ensure you're getting the best rates. The InsuredCircle car insurance comparison tool can assist you in locating the best deal.

2. Take advantage of car insurance discounts

Every insurance company provides unique ways to reduce your car insurance premium. Ask your agent to go over your potential savings to ensure you're getting all of the discounts you're entitled to.

The following are some of the discounts provided by the four largest car insurance companies. However, keep in mind that you should compare quotes based on your specific situation. Just because an insurer offers numerous discounts does not imply that it has the lowest overall price.

• Allstate provides discounts based on the vehicle, coverage options, lifestyle, and driving habits. They range from a 5% discount for establishing automatic premium payments to a 35% good student discount. Drivewise, a usage-based insurance program, and Milewise, a pay-per-mile program, are also available in some states. According to the company, some drivers could save up to 39% by allowing Allstate to track their driving through these programs.
• Geico offers discounts for vehicle equipment, driving history and habits, driver training, customer loyalty and membership in one of 500 “affinity” groups, such as organizations and employers. Furthermore, military members may be eligible for a 15% discount, and federal government employees and retirees may be eligible for an 8% discount.
• Progressive provides discounts for home ownership, beginning your quote online, and signing documents online when purchasing coverage. Snapshot, a usage-based program that tracks mileage and driving habits, is also available from the company. Most Snapshot customers receive a discount, but some customers may face higher rates at renewal time if their driving data reveals risky habits.
• State Farm provides student discounts, vehicle safety equipment, and safe driving, among other things. Customers who sign up for the company's Drive Safe & Save usage-based program receive an initial 5% discount. According to the company, safe drivers who drive fewer miles can save up to 50% on car insurance. The program and discounts differ from one state to the next.

3. Drive safely

Accidents and traffic tickets raise car insurance premiums. If you receive a traffic ticket, you may be given the option of attending traffic school to have it dismissed or to reduce the number of violation points on your driving record. If you are able to keep the violation off your driving record, the time spent in class could save you hundreds of dollars over the course of several years.

4. Drop car insurance you don’t need

If you own an old car, it may be time to drop collision and comprehensive insurance, which cover vehicle damage. Collision insurance covers the cost of repairing your car if it collides with another vehicle or object, or if it flips over. Comprehensive insurance covers you if your car is stolen or damaged due to a storm, vandalism, or colliding with an animal such as a deer.

If your car is worth less than your deductible plus the cost of annual coverage, it's time to sell it. Collision and comprehensive insurance will never pay out more than the value of the vehicle. Consider whether it is worthwhile to pay for coverage that may only reimburse you a small amount, if at all.

If you drop collision and comprehensive coverage, put the money you would have spent in a fund for car repairs or a down payment on a newer car when your old one dies.

5. Drive a car that’s cheap to insure

Compare car insurance rates for the models you're considering before purchasing your next vehicle. Your car insurance premium is influenced by the vehicle you drive, especially if you purchase collision and comprehensive coverage. Minivans and small SUVs, which are safe and reasonably priced, are less expensive to insure than flashy and expensive cars.

6. Increase the deductible

Raising the deductible, or the amount that the insurance company does not cover when paying for repairs, can help you save money on collision and comprehensive insurance. For example, if the repair bill is $2,000 and your deductible is $500, the insurer will pay $1,500.

Savings vary by company, so compare quotes with various deductible levels before making a decision.

7. Improve your credit score

When car insurance companies determine how much to charge you, your credit score plays a significant role. In some cases, it may be more important than your driving record. (This is not true in California, Hawaii, or Massachusetts, where insurers are not permitted to take credit into account when setting rates.)

Focus on the following three steps to improve your credit and get lower car insurance rates:

• Make on-time payments on all of your loans and credit cards.
• Keep credit card balances well below your credit limits.
• Only open new credit accounts when absolutely necessary. Too many credit card applications can harm your credit score.

8. Don’t drive a lot? Consider usage-based insurance

If you don't drive frequently, look for an insurer that offers a pay-per-mile or usage-based driving program. Rates are determined in part by how much you drive and, in some cases, how well you drive. To participate, you must install a small device in your vehicle that sends data to the insurance company. Low mileage and, in many cases, safe driving habits earn you a discount.

In some states, Metromile, Allstate, Esurance, Nationwide, and Mile Auto all provide pay-per-mile insurance. Pay-per-mile coverage typically consists of a base rate plus a per-mile rate.

Other insurers that provide usage-based insurance programs include State Farm, Progressive, Safeco, and Travelers. Insurers use these programs to track your driving habits, such as speeding and hard braking, and then offer discounts or reduced rates for safe driving. In some cases, simply signing up entitles you to a discount. Some insurance companies, such as Allstate, Esurance, and Nationwide, provide both types.