In this paper we present a new multilevel clustering algorithm for Vehicular Ad-Hoc Networks (VANET), which we will call the Density Based Clustering (DBC) algorithm. Our solution is focused on the formation of stable, long living clusters for reliable communication. Cluster formation is based on complex clustering metric which takes into account density of connection graph, link quality and traffic conditions. Tests performed in the simulation environment composed from VanetMobiSim and JiST/SWANS have shown that algorithm performs better than the popular classic approach (the Lowest Id algorithm [1]) - the clusters stability is significantly increased.
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