Buying a car is an exciting time. With so many different makes, models, and options, it can be hard to choose with so many things to consider. However, not only do you need to consider the vehicle itself, but also the total cost of ownership that comes with the car including gas, maintenance and basic repairs, and lastly auto insurance.
There are many things that can impact your auto insurance rate. We’ve compiled a list of a few factors many insurers consider when they provide you with an auto insurance policy quote.
One large factor that plays a role in your insurance rate is your location. Insure.com lists Michigan as the most expensive place to purchase auto insurance, at an average of $2,394 per year. Maine grabs the spot for the lowest average insurance rates at $864 per years, with the national average being roughly $1,318.
Although these averages are widely varied, location does play the most crucial role in pricing your auto insurance policy. If you live in an urban and metropolitan area, you are much more likely to be involved in an accident resulting in damage. Factors such as vandalism and theft are higher in metropolitan areas as well, increasing the risk of a larger payout by the insurance companies if anything were to happen to your car.
What Car You Drive
One known factor to increase insurance premium rates is the type of vehicle you are driving. Your vehicle’s safety rating plays a key role in this factor, as insurance companies heavily analyze consumer claim data and industry safety reports to see which vehicles pose the least amount of risk to the drivers and themselves. If your vehicle received a poor safety rating and is also considered to be “eye-catching” in any way, you will surely see an increase in your insurance rates.
Chance of Theft
Vehicle theft is one of the largest costs an insurer will pay for. If your specific make and model is common, your car is a larger target for thieves and vandals looking to sell your car for parts or use it for various forms of crime.
Numerous studies claim to show that higher education levels can be linked to safer driving. Insurance companies are known to charge higher rates to less educated drivers due to their supposedly high risk of filing a claim or being involved in an accident. This also applies to your career, as insurers believe that people who have detail oriented and cautious jobs pose less of a risk than people with a high-stress job.
Insurance studies have found that married men and women tend to drive safer than those that are single or in a relationship. Being married could mean lower auto insurance rates versus being single and living alone. This is because insurance companies believe that drivers who are married tend to be more careful.
Having a less than perfect credit score can also affect your auto insurance rates. Be sure to shop around to find the best rate possible. If you are looking to purchase a car with bad credit, CrediReady can help. Our nationwide network of trusted lenders and verified dealers work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan request form today to get started!