Before you purchase a car, it’s a good idea to understand all the costs associated with the purchase of the vehicle — including the cost of automobile insurance. Auto premiums rates vary based on a variety of factors. Learning about how rates are determined will help you navigate why rates vary and can assist you with your auto buying decision. Seven of the factors that impact your auto rates include:
- The type of vehicle you drive
- Where you live
- Age of insured driver(s)
- Age of car
- Value of car
- Driver record
- How many miles you drive
Type of vehicle
Both size and performance impact premium costs:
- Size: Larger cars tend to be less expensive to insure than smaller cars because they typically suffer less damage in an accident.
- Performance: High-performance vehicles, such as sports cars, tend to be more expensive to insure since they are statistically driven more aggressively. As a result, they tend to be involved in accidents more frequently.
Value and Age of Vehicle
As a simple rule of thumb, the more expensive the car, the more it will cost to insure. The newer the vehicle, the more it costs to insure.
Vehicle Usage and Location
Typically, the cost is based on the average amount of miles the automobile is driven: the higher the mileage, the higher the premium. Where you live or store your vehicle has a major impact on what your automobile insurance will cost. Typically, the more densely populated an area is, the higher the auto premium. More cars on the road means a greater risk of accidents.
One of the most important factors in determining auto premiums is the driver’s age. Young drivers under the age of 25 are statistically up to four times more likely to be in an accident, so rates are typically higher than their older counterparts. Additionally, males under the age of 25 will be more expensive to insure than females under the age of 25.
Studies indicate that drivers with past claims are more likely to have future claims, so the driving records of the individuals listed on the policy greatly impacts the cost of the policy. Drivers with moving violations, accidents and/or claims in the past three years will usually pay a higher price for their automobile insurance than those ensuring the same vehicle but are “loss-free.”
The higher your deductible, the lower your premium.
You can earn premium discounts based on the vehicles safety features, such as anti-lock brakes, air bags, anti-theft devices and having more than one car on the policy.
Top Ways to Save on Your Auto Premium
- Consider raising your deductible
- Keep up your good driving record
- Drive less to qualify for a low-mileage discount
- Drive a car with safety features such as anti-lock brakes, airbags, etc.
- Install an anti-theft device
- Ask about our multi-policy discounts
What to do before purchasing a vehicle? Test drive the automobile insurance rate by contacting our office. We would be happy to provide you the information you need to help you make your best buying and coverage decision.