As you are probably well aware by now, owning a car can be an expensive undertaking. For one thing, there are the costs associated with owning and operating a vehicle, including the purchase price, maintenance, and fuel. But that’s just the beginning. You’ll also have to shell out cash to meet the legal obligations tied to owning a vehicle, including registration and of course, insurance. And aside from the price of buying a vehicle, paying for insurance can be one of the largest additional concerns. You should also know that your insurance premiums are not set in stone. There are a number of factors that can affect the price you’ll pay for automobile coverage. Here are just a few you should know about.
- Age. You might think that the cost of insurance is based solely on your driving record, but your age can actually make a big difference in how much you’re required to pay for coverage. For example, most providers will automatically charge more if you’re under the age of 25. This is because you are in the highest-risk group for accidents. Of course, you may be able to temper these costs in some cases by keeping your record clean for a set amount of time or maintaining a good GPA. But you should go into the process understanding that young adults will pay more than those that are considered to be more experienced and responsible due to their age.
- Your car. The type of car you drive can definitely impact the amount you pay for insurance premiums. For example, if you’re paying down a car loan you’ll likely be required to pay for full coverage insurance until you get the pink slip from your lender. But even if you own your car free and clear, certain types of automobiles are considered to be at higher risk for accidents. You’ll pay more for a car with two doors or one that is classified as a “sports” vehicle. And the more expensive the vehicle, the more you’ll pay to insure it.
- Your policy. Premiums are dictated by a number of factors, but the policy you choose will certainly affect your overall cost. Most insurance providers offer several options that deliver varying levels of collision and liability coverage. And each will come with a price tag that reflects the amount of damage and/or medical costs covered in the event of an accident.
- Potential discounts. So far we’ve discussed things that can have a negative impact on the cost of your insurance, but most insurance companies also offer a variety of discounts that could help to lower the price of your premiums. If, for example, you hold multiple policies for vehicles, a home, life insurance, and so on, you could be eligible for discounts on the total. You might also get discounts for being a safe driver, installing LoJack (or other anti-theft measures) in your vehicle, and more, depending on what your insurance provider offers.
- Accidents and moving violations. The main reason to contract with auto insurance companies is to get coverage for accidents. But in case you didn’t know, being the cause of an accident can lead to an increase in premiums, as can being ticketed for moving violations such as speeding, running red lights or stop signs, hit and run, and DUI, amongst others. Driving in a safe and responsible manner will help to ensure that you don’t suffer raised rates for these easily avoidable infractions.