There are many ways to save money on auto insurance. Before you can begin saving, however, you should understand how auto insurance rates are calculated in the first place. This will help you to know what sort of things you can do to lower your auto insurance costs by getting cheaper premiums.

Auto insurance is calculated using a few different factors. These factors are combined to determine what level of risk you pose to the insurance company. Once your risk level has been determined, then you are quoted a rate based on this level. The elements used to calculate insurance rates include:

•    Driving record
•    Type of car being insured
•    Credit rating
•    Age, gender, marital status
•    How much coverage is desired

Once these elements are calculated into a risk level, you are assigned a specific class, depending on the results. The lowest rates are given to those known as preferred risk, because they are least likely to file a claim and have safe driving habits. In the middle are those known as standard risk, which are those people who may or may not file insurance claims, and need a little more caution than preferred drivers. Finally, there is a class for those who have the highest probability of needing to file insurance claims. These high risk drivers are technically referred to as non-standard risk drivers. They’ll pay the most for insurance, but can still find ways to save money on auto insurance.

Now that this has been explained, it’s time to move on to savings tips. If you’re a preferred risk, you’re already getting the lowest rates. However, you can still save more, as can all drivers. Here are some ways to save:

•    Discounts: these are available to all drivers based on various circumstances. There are discounts available for good drivers, good students, multiple vehicles, multiple policies, and more. Insurance companies will tell you exactly what you qualify for.
•    Shop around: taking a little time to research auto insurance rates and check with different companies is the easiest way to save money on auto insurance. You might be satisfied with a premium of $600 from one company, but what if there’s a company that will give you an annual premium of only $450? It’s worth the extra time to check out, if you really want to save money.
•    Classes: if you have a bad driving record, take defensive driving courses or traffic school classes willingly and of your own accord. This will demonstrate your willingness to improve your record, and many insurance companies will lower your rates for it.

These are just a few ways to save money on auto insurance, but every little bit will help. If you’re really interested in saving some cash, just invest a little extra time to know what you’re getting into. An informed shopper can save up to 50% more than someone who isn’t educated about what they’re buying.