(BankingMyWay) – You’ve got to have auto insurance in order to drive your vehicle legally in the United States. For many people, though, the cost of insurance is a tough pill to swallow. However, comparison shopping and smart planning can help you save hundreds of dollars a year on your auto insurance premium.

Comparison Shop For The Best Deal
It may sound obvious, but comparison shopping for auto insurance is the fastest and most effective way to save money on your policy. Every single insurance provider uses a different formula for calculating auto insurance premiums, so getting quotes from various competitors will help you choose the most affordable rate for your needs. Online resources can also be very helpful, such as BankingMyWay.com’s Insurance Center, which lets you quickly get quotes from providers like Allstate (Stock Quote: ALL) and Nationwide (Stock Quote: NFS).
Know Your Needs
When you begin your search for the lowest price on auto insurance, be sure you have all the details of your current policy handy. You’ll want to match those exact requirements line by line in order to accurately compare premiums. Often, when a quote sounds too good to be true, it is.

Be sure to list your desired coverage amounts for the following:
• Deductible
• Liability coverage amount (for bodily injury and property damage)
• Collision coverage amount
• Comprehensive (for vandalism, theft, fire, etc.)
• Medical Payments
• Rental reimbursement (when applicable)
• Uninsured/underinsured motorist and property coverage

Once you’ve got all these elements listed, you can evaluate which policy is truly more affordable. Also, be sure that you are comparing the same duration terms, as some policies are quoted for one-year periods and others for six months.

Consider a Higher Deductible
Another major way to reduce your auto insurance premium is to choose a higher deductible. If you total a $30,000 vehicle, does it really matter whether you pay $500 or $1,000 out of pocket? According to AAA auto club, you can save $200 to $800 a year on the average policy by bumping up to the next deductible level.

Eliminate Unnecessary Costs
If you own your vehicle with a low resale value (under $2,500 for example), you may consider carrying only liability insurance instead of full coverage. On average, this adjustment can save you 40 to 60 percent on your annual premium. Keep in mind, though, that liability will only cover the expenses of the other driver involved. You must be sure that you can replace your car with your own money if it is totaled, as well as cover your own medical costs.

Find Discounts
Always ask for additional discounts from your auto insurance provider. Popular discounts include those for good drivers, students, union members, teachers and other professionals, multiple driver households and multiple policyholders. You can also receive discounts by taking defensive or mature driver classes, installing an anti-theft device on your vehicle and housing it in a garage.