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I recently traded in my hunk-of-junk car for a brand-spanking-new 2012 Ford Fusion, and it is B-E-A-U-T-I-F-U-L. My 1999 clunker was more stress than it was worth. Not long ago, I spent close to $700 in engine repairs, and the day after I got my car back from the shop, my engine was stalling. When it finally started properly, it shook so hard I felt like I was racing in NASCAR. I discovered there was a leak in an engine hose that would cost an additional $200 to replace – that was the LAST STRAW.

Let’s look on the bright side. Now I get to drive something with great gas mileage (about 32 mpg) on my daily commute to Detroit. It even has heated leather seats, a rear back-up camera, and bunches of other fun stuff.

Not to be a Debbie Downer, but the downside to all of this is that I’m paying significantly more for car insurance.

I’m only 21, so even though I have a good driving record, my insurance prices are bound to be a little bit high. The first time I purchased car insurance, I was overwhelmed with all the options. If you’re shopping online, most companies offer “customizable” insurance. This can be a complete disaster if you don’t know what you’re doing. Stupidly, I decided to put collision and comprehensive coverage on my clunker. At one point, I was paying nearly $300 a month just for my car insurance, and if anything ever happened, I’d still have to swallow the $1000 deductible that I chose to get my rates down.

As I slowly watched my savings account swirl down the drain, I realized it was pointless to have all that insurance on such an old car. I was paying more than the car was worth because I didn’t understand my coverage. How much was my car worth? When I finally traded in that nightmare of a vehicle, the dealership gave me a total of $300 for it. Wow, don’t be too generous, guys.

I learned my lesson the hard way after wasting tons of money on pricey insurance, so I don’t want you to make the same mistake. Here are some life lessons from a former insurance sucker:

• Don’t get talked into buying coverage you don’t need. Each state has different laws regarding the minimum insurance coverage you can carry on your car. In Michigan, collision coverage is not required. If you’re driving an older car like I was, consider if it’s really worth it. Would it be cheaper to fix the car if it were wrecked, or just replace it? Also, do you really need extra coverage for towing and vehicle rental?
• The vehicle you drive affects your premium. Obviously, pricier cars will cost more to insure, and small cars sometimes have very high injury claims that can make insurance expensive. Consider this if you’re shopping for a new vehicle. Insurance companies set rates based on their own experiences, so if you already have a vehicle, shop around.
• Who you are affects your premium. Married men pay less than single men. If you live in a city with dense traffic, your insurance is probably higher than someone who lives in a rural area. If you’re under 25, expect your insurance to be expensive. Man, I can’t wait to turn 25!
• The best way to keep your rates down is to be a safe driver with a clean record. Tickets and accidents dramatically increase premiums, no matter how old you are. Getting a ticket will cost you more than a simple fine; it’s going to increase your premium for years to come.
• Don’t be shy about asking for discounts. In my experience, I’ve gotten discounts for things like belonging to a bank, using PayPal, being a good student, and having a car alarm.
• Drive less. In addition to saving you money on gas and helping the environment, using carpools and public transportation mean you drive less miles, which could mean a big payoff for your premium.
• A larger deductible means a smaller premium. If you get in a small accident, you might end up paying the entire cost of repairs, but if there’s major damage, you’ll still be covered. Unless you’re a really bad driver, the money you’ll save in your monthly premium will probably pay off.

The most important thing to know is that shopping around can save you tons of money on car insurance. Look beyond the big brand-name companies you see on TV, and make some phone calls before deciding on a car and/or insurance provider. Don’t feel like you have to buy certain coverage just because someone tells you to. Good luck, and drive safe!