Factors That Affect Your Car Insurance Rates

Factors That Affect Your Car Insurance Rates

When you own a vehicle, car insurance is one of those things you can’t afford to overlook. Not only is it required by law to have coverage, but it serves as a safety net for your investment. Should your car be stolen, vandalized, hit by a tree limb, or damaged in an auto accident, insurance provides you with the funds you need to cover the associated expenses. Although it’s a necessary expense, you have a budget to keep in mind. 

Finding Affordable Insurance

No one wants to go bankrupt trying to pay for auto insurance. As such, they use comparative shopping methods to find companies that offer affordable rates. While there are sites that make comparing top insurance agencies easier, knowing what factors play a role in your quote could help you save even more. Let’s take a closer look. 


Your address can impact your car insurance quotes. For example, someone that lives in the city will pay more than someone that lives in the suburbs. That’s because traffic is heavier and the chances of accidents increases. While you may not be willing to relocate to get an insurance discount, it’s good to know why you might pay more than a relative that lives just a few miles away.

Car Storage

Where you store your car when you’re not driving can also impact how much you pay for insurance. The insurer’s interest is in ensuring that the car stays intact, so they don’t have to shell out money to pay for damages. If you park your car on the street, there is a higher chance of it being damaged. However, if you have a garage, the vehicle is more secure, which can drive your premiums down. If you have a driveway or garage, ensure that you inform the insurance company to receive a discount.

Credit Score

Most people aren’t aware that insurance companies look at your credit score to determine how much you will pay. They take factors from your credit history like your outstanding credit, payment history, credit length, the pursuit of credit, and credit mix. This information is used to evaluate the likelihood that you’ll file an insurance claim. If your credit history is poor, chances are your credit-based insurance score will be low as well. Consequently, you’ll have to pay more for insurance. So, it’s best to clean up your credit history before trying to shop for cheap car insurance. Searching ‘starter loans near me’ could help you find a loan to pay off all your debts to clean up your credit and then you can make one monthly payment moving forward. 

Driving Record

Your ability to be a safe and responsible driver also impacts your insurance rates. Insurers will pull your driving record from the local department of motor vehicles to determine how risky you are to cover. If you received a moving violation ticket or been in an accident in the last 3-5 years, you’re considered high-risk. Insurance companies will either ask you to pay a higher rate or reject your application. If you had a fender bender a year ago, you’re probably wondering how long does a fender bender stay on your record? You can request a copy of your driving record to find out before applying for auto insurance. 

Your Vehicle

Last but not least, the make, model, color, age, and condition of the vehicle can impact how much you pay for insurance. For instance, a red sports car is going to cost more to insure than a black sedan. That’s because there’s a higher chance of the driver speeding. Similarly, a modern car with safety features like parking and lane assistance will be cheaper to insure than an older vehicle. Ultimately, the safety features reduce the chances of an accident. If you’re shopping for a new car, these are things you want to keep in mind to get affordable insurance. 

Finding cheap car insurance quotes isn’t as easy as it sounds. As you can see, there are several factors that insurance companies use to determine your rates. Ultimately, if you want to lower the monthly rate, start by making adjustments to the above areas.


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