4 Factors That Affect Your Auto Insurance Rates

Whether you have paid cash for your car or you are financing it through a lender, it is major investment. Not to mention, it can be your trusty companion for years to come and help you out in all kinds of ways. 

So, why not protect your investment?

Auto insurance can be one of the most necessary things you have to pay for, even if you don’t want to. Not to mention, in many regions, you have to get auto insurance by law or you can face fines. 

But, when you are looking at insurance rates, you will find that they can vary significantly. Even if your friend has the same car and you both go to the same insurance company, you could both get different insurance rates. 

But, instead of paying higher rates, here are some factors you should look into that affect your auto insurance rates

Your Driving Record

The first and most obvious one is your driving record. Your driving record might be one of the most important factors insurance companies take into consideration when they are deciding your rates. 

In case you have got a history of speeding tickets, accidents, or other traffic violations, the insurers will see you as a higher risk and will likely charge you more for coverage. 

On the other hand, if you have a clean driving record, you will be able to enjoy lower premiums. 

Your Age and Gender

Believe it or not, your age and gender also play a role in determining your auto insurance rates. 

Insurance companies look at the basic statistics of the drivers in their region, and incorporate some basic behavior stats into it as well. 

Generally, younger drivers, especially those under 25, tend to pay more for insurance because they are statistically more likely to be involved in accidents

Gender can also be a factor, with young male drivers typically facing higher premiums than their female counterparts. 

The Type of Car You Drive

Another important factor is the car you are getting insured. For instance, if you have a car that is expensive, like a rare or a luxury vehicle, then you will most likely have to pay higher premiums because the car is expensive to repair or replace. 

Similarly, cars that have a higher statistical theft rate are also more expensive to insure. 

So, if you are still in the market for a new car and want to keep your insurance costs down, look into vehicles that are known to be reliable, and they are moderately priced with good safety features.

Your Credit Score

Your credit score shows how good you are at maintaining your financials. It can affect everything in life, from your ability to get a loan to getting a good job. And, it can also impact your auto insurance rates.

Insurers often use credit-based insurance scores to help determine how likely you are to file a claim. The insurance companies have all kinds of researches and studies, which often show that individuals with lower credit scores tend to file more claims and, as a result, may face higher premiums. So, if it has been suffering, you should find some ways to improve your credit score sooner rather than later to save on insurance rates.