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9 Factors to Consider When Shopping for Auto Insurance Rates

Scott Templin
March 12, 2019

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Before you purchase a car, it’s a good idea to understand all the costs associated with the purchase of the vehicle—including the cost of automobile insurance.

Decide Before You Buy

Before purchasing a car, it’s a good idea to understand all the costs associated with the purchase. This includes the cost of automobile insurance. Auto premium rates vary based on a variety of factors, which we’ve highlighted below. Learning about how rates are determined will help you navigate why rates vary and can assist you with your auto buying decision.

1.  Type of Vehicle
Both size and performance impact premium costs:
  • Size: Larger cars tend to be less expensive to insure than smaller cars because they typically suffer less damage in an accident.
  • Performance: High-performance vehicles, such as sports cars, tend to be more expensive to insure since they are statistically driven more aggressively. As a result, they tend to be involved in accidents more frequently.
2.  Value of Vehicle

As a simple rule of thumb, the more expensive the car, the more it will cost to insure.

3.  Age of Vehicle

The newer the vehicle, the more it costs to insure.

4.  Vehicle Usage

Typically, the cost is based on the average amount of miles the automobile is driven: the higher the mileage, the higher the premium.

5.  Vehicle Location

Where you live or store your vehicle has a major impact on what your automobile insurance will cost. Typically, the more densely populated an area is, the higher the auto premium. More cars on the road means a greater risk of accidents.

6.  Driver Age

One of the most important factors in determining auto premiums is the driver’s age. Young drivers under the age of 25 are statistically up to four times more likely to be in an accident, so rates are typically higher than their older counterparts. Additionally, males under the age of 25 will be more expensive to insure than females under the age of 25.

7.  Driver Record

Studies indicate that drivers with past claims are more likely to have future claims, so the driving records of the individuals listed on the policy greatly impacts the cost of the policy. Drivers with moving violations, accidents and/or claims in the past three years will usually pay a higher price for their automobile insurance than those insuring the same vehicle but are “loss-free.”

8.  Deductible Choice

The higher your deductible, the lower your premium.

9.  Credits

You can earn premium discounts based on the vehicle’s safety features, such as anti-lock brakes, air bags, anti-theft devices and having more than one car on the policy.

Top Ways to Save on your Auto Premium

  • Consider raising your deductible.
  • Keep up your good driving record.
  • Drive less to qualify for a low-mileage discount.
  • Drive a car with safety features such as anti-lock brakes, airbags, etc.
  • Install an anti-theft device.
  • Ask about our multi-policy discounts.

We’re Here to Help

What to do before purchasing a vehicle? Test drive the automobile insurance rate by contacting us at (219) 879-4581. We would be happy to provide you all the information that you need to help you make your best buying and coverage decision.

This article was adapted from Zywave. The information provided is not intended to be exhaustive, nor should it be construed as advice regarding coverage. Readers should contact an insurance professional for appropriate advice concerning their needs.

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