Table of Contents
When you’re shopping around for insurance, it’s important to find the perfect balance of good coverage at an affordable rate. This is especially true when it comes to car insurance since most states require that you have coverage. Currently, on average, drivers spend more than $1,700 per year on car insurance costs, which amounts to over $140 per month.
Unfortunately, your car insurance payments may be wildly different. That’s because the total amount you pay is determined by a number of different factors.
Continue reading to take a closer look at what affects car insurance quotes so you can properly budget for how much you’ll need to pay.
The simple fact of the matter is that the younger you are, the harder it will be to find cheap car insurance. That’s because younger drivers have less experience and are more prone to getting into an accident. Typically, once you pass the age of 25, your premiums will start to go down, as you have more experience behind the wheel.
On the opposite end of the spectrum, once you become a senior, you might see your rates increase. Over the age of 65, you’re statistically more likely to get into an accident, which usually means your premiums will rise.
Your Driving History and Experience
Along those same lines, your history behind the wheel plays a large part in how much you’ll have to pay for insurance. If you have a history of getting into car accidents or receiving traffic citations, you will have to pay more for your car insurance coverage. This is true even if you’re in a car accident that’s not your fault.
On the flip side, if you have a clean driving record, you’ll be eligible for lower premiums. So, it really does pay to drive safely! As we touched on above, experience plays a part in your price as well. The longer you’re on the road with a clean record, the more likely you’ll be able to access lower premiums.
Where You Live
When car insurance agents generate quotes for your coverage, one of the things they factor in is where you live and work. In bigger cities, where there are more cars and higher risks of accidents, your premiums will likely be higher than in areas with less congestion.
This calculation goes beyond the general area you live in and can even vary depending on your specific zip code. For example, if you live in an area with street parking, you’ll likely have to pay a higher rate, since there’s a greater chance of your car getting damaged.
The Amount of Coverage You Need
When choosing your car insurance coverage, you may have different options to choose from, including the following:
- Comprehensive coverage
- Collision coverage
- Medical payment coverage
- Personal injury protection
- Uninsured motorist coverage
- Towing and labor costs
- Rental reimbursements
The level of coverage you want will dictate how much you end up paying each month. If you are looking for the cheapest possible rates, then opt for only the required coverage options. Of course, keep in mind that you could be out more money down the line if you get into an accident.
While you have some say in which coverage options you want, you also have to abide by state requirements. Since every state has its own car insurance requirements, the amount you end up paying can vary wildly if you move between states.
Before choosing your coverage, take the time to make sure it meets all state requirements so you’re not caught in a sticky situation later.
The Insurance Company You Choose
Another factor that influences how much you’ll pay is which insurance provider you choose. It’s a good idea to shop around for quotes from different car insurance companies to see the going rates in your area. This will help you make a more informed decision on which provider makes the most sense for your needs and your budget.
You can quickly compare quotes with the help of auto insurance experts by clicking the link so you’re sure to find the best possible rates.
Your Annual Mileage
How much you plan to drive each year also factors into how much you’ll pay. The more your car is on the road, the higher the chance of an accident or damage to the vehicle. So, more mileage generally means higher payments. Of course, if you don’t have a long commute or drive infrequently, your payments are likely to be lower than average.
The Vehicle You Drive
What you drive also plays a role in your monthly car insurance costs. Generally speaking, cars and trucks with higher safety ratings have lower insurance options, while flashier cars may have higher premiums.
The likelihood that your car will be stolen is also taken into consideration. Certain makes and models are more prone to theft and are, therefore, more expensive to insure.
Your Credit History
Finally, as with most things in the United States, your credit history plays a part in how much you’ll have to pay. Unfortunately, if you have a poor credit score, you’ll likely get higher car insurance quotes. And, if you have great credit, you’ll have access to lower rates.
However, there are a few states that don’t factor credit history into calculating premiums: California, Massachusetts, Michigan, Washington, and Hawaii. If you live in one of those states and you have bad credit, then you won’t have to worry about it impacting your monthly payment.
Calculating Your Monthly Car Insurance Payments
As you can see, there’s no set amount for car insurance payments that can apply to every single person. After reading this guide, you should have a better idea of what factors into your premiums so you can use that as a starting point for your budget. From there, get multiple quotes from different companies to help you find the best possible rate.
To read more lifestyle content like this, be sure to check out our other articles before you go.