Shopping for a new car is an exciting experience, but shopping for auto insurance…not so much. There are a number of factors that go into what rate you will pay for your next ride. Understanding how your rates are determined will help you navigate why these rates vary and will assist you in your auto buying decision. Here is everything you need to know when it comes to shopping for auto rates and keeping costs low.
The Basics
The main factors that determine your auto insurance rates include the following:
- – The type of car you drive
- – Where you live
- – Value of the vehicle
- – Age of the insured
- – Age of the vehicle
- – Driver record
- – Amount of miles you drive
Before You Buy
Before you settle on which car you are going to buy, and start picking between midnight blue or candy apple red, it’s a good idea to understand all the costs associated with your purchase. This includes the cost of auto insurance. Since auto premium rates vary based on a variety of factors, learning how rates are determined will assist you in your final decision. Below we will highlight several of the main contributing factors and how they affect your rate.
Type of Vehicle
The type of vehicle you buy affects your rate in two key ways: size and performance.
Size: Larger cars tend to be less expensive than smaller options due to increased durability. Often large cars sustain far less damage as the result of an accident.
Performance: High performance vehicles, such as sports cars, tend to be more expensive than standard vehicles. This is because, statistically, they are driven more aggressively, often at higher speeds. Due to this, sports cars and high performance vehicles are involved in accidents more frequently.
Vehicle Location
Where you live or store your car has a major impact on the cost of your auto insurance. Typically, the more densely populated the area, the higher your auto premium will be. The more vehicles on the road, the more likely the risk that you will be in an accident.
Value of Vehicle
A simple rule of thumb is, the more expensive the vehicle, the more it will cost to insure. This is due to the higher costs of repairs or replacement should the vehicle be involved in an accident. However, newer model cars with improved safety features can help cut some of the costs. Be sure to ask your agent if the improved safety features qualify you for any discounts.
Driver Age
Another one of the most important factors in determining auto rates is the driver’s age. Young, less experienced drivers under the age of 25 are 4 times more likely to be in an accident. This is why they typically pay higher rates than older drivers with more time behind the wheel. Additionally, males under age 25 tend to be more expensive to insure than females under 25.
Driving Record
Studies show that drivers with past claims are more likely to have future claims, so the driving record greatly affects the cost of the policy. Drivers with moving violations, accidents, and/or claims in the past 3 years can expect to pay a higher price. If you have a less than perfect record, you will pay more than someone who is “loss-free” insuring the same vehicle.
Best Ways to Save on Auto Premiums
Now that you know what affects your auto insurance rates, here are the best ways to save:
Raising your deductible: The higher your deductible, the lower your premium.
Good driving record: Maintain a clean driving record and many companies will offer you a discount.
Drive a safe car: Safety features like anti-locking brakes and anti-theft devices can qualify you for a discount.
Multi-policy discounts: Most agencies offer discounted premium rates if you have multiple policies with them.
For more information on how to lower your auto insurance rates, you can read our previous article here.
Here to Help
You wouldn’t buy a car without a test drive, so why buy your insurance without a test? Call us at 724-929-2300 and our agents will happily provide you with all the information to make your car buying and coverage decision. Don’t forget to ask for a free quote or policy review too! We do the shopping for you and can find you the right coverage at the best rate to save you time and money.