Five Ways to Save Money on Your Car Insurance

Car and health insurance premiums are often seen as fixed costs -- the bills that must be paidregardless of their ever-increasing price and your tight budget. But if you haven't looked in awhile, itcan be beneficial to look at your recurring expenses. Here are five tips that could save you money onyour car insurance:

Change your profession

Insurers like to use every statistic they can find to weigh a driver's accident risk and the likelihoodthey will file a claim. There's one thing that can carry significant weight: your occupation. A reportby the Consumer Federation of America discovered three of the five largest U.S. car insurers basepremiums on more than driving records. The study used two hypothetical 30-year-old women livingon identical streets in middle-income ZIP codes in 12 different cities. One woman was a singlereceptionist with a high school diploma and an accident-free driving record. The other was a marriedexecutive with a master's degree and an at-fault accident in the past three years. In two-thirds ofcases, the woman with the accident received a lower quote, according to the report. Insurers useoccupation titles and education level as substitutes for specific income information and, like it ornot, income is used to project your potential cost to the insurer. With that in mind, it may help yourbank account to leave modesty aside when choosing what to call yourself on your application, since afancier title may fetch a lower rate.

Buy insurance in December

It varies by state, but depending on the month you buy insurance, you might be paying more thanyou need to -- sometimes significantly more. Nationally, December is the cheapest month to grabyour policy, according to a recent yearlong study by InsuranceQuotes.comb. March is typically themost expensive month to buy. Depending on the state, it's possible to see a nearly 50% variation inpremium price from the cheapest month to the most expensive. Being savvy about when you buyinsurance could save you big time.

Bundle your car insurance

Bundling your car insurance with other insurance policies can not only save you some green, but italso may have the added benefit of making your life a little easier. Beyond having to take care ofonly one payment, you'll also be dealing with just one agent. Bundling also closes coverage gaps thatcan cause disputes between your insurance companies over who will pay, which costs you money asthe claim is sorted out. If you have separate insurers, ask each of them to see if you can takeadvantage of bundling discounts. But be careful: Bundling isn't guaranteed to save you money. Toremain competitive, auto-only insurers might offer cheaper rates. Compare bundling with usingseparate companies. If you do bundle, check around at least once a year to make sure you are stillsaving money.

Get usage-based rates

This trick is a bit more complicated but -- depending on the individual -- it might be worth a look.With usage-based insurance, your monthly premium is determined by information from your

odometer or an electronic device installed in your car. Some policy rates are based on how manymiles you drive in a month. In other cases, an electronic device records your driving data, such asspeed, acceleration, braking and handling. The data is compiled and analyzed to determine yourrate. Obviously, this kind of policy depends on the individual. If you have a need for speed and takecorners like you're in the Grand Prix, this isn't going to help you. If you're young and cautious, anddon't spend too much time commuting, usage-based insurance could be a money saving option.

Shop around

You would be surprised how many people don't shop for a less-expensive policy. According to aNerdWallet survey, Americans pay an average of $368 more a year on car insurance than theyshould. But 88% of drivers said shopping around for the best rate is a frustrating experience. Toavoid paying more than you should, there are a few things to keep in mind when shopping around.Look at the big insurers, but also at smaller companies, too. Consider their reputations. Also, makesure when you are getting quotes that you're comparing the same kind of policies. Shop for thecoverage you need and can afford. There's not much point in paying less if your coverage isn'tenough and you're stuck with an accident you can't afford. Drivers could, on average, save 32% byshopping around, the survey found.

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