Twenty Things That Can Affect Your Car Insurance Costs

When buying insurance, many factors go into determining the premiums you're going to pay. Some of these things are in your control while others are not. In this article, we walk through twenty things that can affect your car insurance costs. Some of these things that are in your control include switching cars, driving safe, buying less insurance, an anti-theft device, and buying all at once.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: May 3, 2021

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When buying insurance, many factors come into play when determining your premiums. Some of these things are in your control and others are not in your control. In this article, we will break these factors down for you.

Let’s first take a look at the things that are in your power – things that you can do to save on your insurance rates.

Things in your control:

1. Switching cars

Different vehicles cost different amounts to insure. Many factors come into play when determining this, including the type of the vehicle, the age of the vehicle, safety ratings, price, cost of repair, etc.  You need to switch to a car that is cheap to insure.

2. Driving safe

If you’ve been in a recent accident or have gotten a recent traffic violation, chances are your premiums will increase. Keep a pristine driving record to keep your insurance costs low.

3. Buying less insurance

Each state has minimum insurance requirements.  If you don’t feel you need extra coverage (such as collision and comprehensive coverage), you can certainly save a lot of money by getting rid of them. (Be careful with reducing coverage, however. It certainly is a big gamble and can end up costing you lots of money in the wrong situation.)

4. Anti Theft Device

Purchasing a vehicle with a security system will often get you an insurance discount. Getting one installed on your current vehicle can also help you save. The reason for this is simple – if thieves can’t break into your car, the less likely they are to steal it. The less likely they are to steal it, the less likely your insurance company will have to pay to replace it.

5. Paying all at once

Many insurance companies offer discounts to drivers who are willing to pay for their car insurance for the year up front (instead of month to month).  Ask your insurer about this option.

6. Being a loyal customer

It costs insurance companies lots of money to find new customers, for this reason, they are willing to fight to keep the customers they currently have. Stick with your insurance company for a while and you might have a hard time finding better insurance rates anywhere else.

7. Increasing deductible

Increasing your deductible can have a significant impact on your insurance rates.  For example, when I increased my deductible from $250 to $500, my premium went down 25%. How much can you save?

8. Driving Less

Cutting your miles will not only save you on your gas prices, but it also decreases your chances of having an accident.  Insurance companies almost always give discounts to drivers who don’t drive as much.  Consider moving closer to work/school or using public transportation to help you do this.

9. Combining your insurance

Using the same insurer for multiple policies can help you save a lot of money.  Consider using the same company for your home, auto, life, health, and other insurance policies you may need.

10. Improve your credit score

Pay off your debts, relieve some stress, and save on car insurance. Your credit score is becoming a bigger and bigger factor in determining your insurance costs.  If your credit score recently improved, consider getting another insurance quote.

But what about the things that you have no control over?  Well, life isn’t always fair, but here are some things you should be aware of…

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Things out of your control:

1. How old you are

For obvious reasons, teenagers and young drivers cost the most to insure. However, reductions in insurance rates often come at age 21 and 25.  The more driving experience you have, the cheaper your insurance should be.

2. Whether you are a boy or a girl

Although you may often hear otherwise, women are actually safer drivers. The reason for this is that statistically speaking, men get in more serious accidents, get more speeding tickets, and are generally more aggressive on the road. If you are a man, sorry, you might be paying more than your wife for insurance.

3. Your past

Your driving record is one of the biggest things insurers look at when deciding your premium. Even though you might have “changed” and have become a better driver since your speeding tickets, it might be hard to convince the insurance company.  Most insurers look at your insurance record for the past 3-5 years.

4. What college you graduated from

If you are a Harvard graduate you are in luck.  If you are a graduate from Middle-of-Nowhere Community College, however, you might be paying a bit more for car insurance.

5. Whether you are married or not

Married drivers often pay less than single drivers.  The reason for this is because they can combine their insurance policy with their significant other in order to get discounted rates.

6. What you do

Your occupation can have a large influence on your premiums.  If your job requires lots of driving, you might pay more.  If you have a career that insurance companies deem to be “respectable”, such as a teacher or a doctor, you will pay less.

7. Where you live

If you live in a place notorious for bad drivers, you might be guilty by association and end up paying more. If your neighborhood has a high amount of auto accidents, break-ins, vandalism, and crime, you can expect to pay more for your auto insurance premiums.

8. How long you’ve been driving

Just like with age, this is a number you can’t really control but is very important to insurance companies. For drivers under age 25, insurance rates can be astronomically high. Teen drivers should expect to pay the most, especially if they are not on their parents’ policy. On the other end of the spectrum, auto insurance rates tend to increase after retirement. Elderly drivers, therefore, should expect to pay a bit more for insurance.

9. Use for business

If you use your vehicle for your job (i.e. if you are an ice cream truck driver or taxi driver), you probably will have a higher premium. In order to remain covered while driving on the job, make sure you first run it by your insurance company. Depending on your profession, you might have to purchase an extra commercial car insurance policy.

10. Multiple vehicles

If you are in a family with many drivers and many vehicles, you’ll pay more for insurance. Fortunately, some insurance companies offer multi-vehicle discounts. Consider combining all of these cars into one policy.  Chances are you’ll pay less to insure each car.

Now that you are educated on what factors can affect your insurance costs, start shopping around!  The only way to truly find the best rate specifically for you is to compare rates from many companies.  This list should help you further understand what kind of rates you can expect.

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