January 4, 2017
If someone asked you whether paying for your car or paying for your car insurance is more fulfilling, it’d be no brainer. You’d likely say that paying for your trusty car, truck, or SUV is gratifying while sometimes paying for auto insurance may not feel the same. You may have even chatted with your friends about this very topic and come away more confused than ever based on that fact that you’re paying vastly different amounts than each other month in and month out.
Whether you’ve been questioning your rising rates, or are just plain interested to know how and why your insurance rates are somewhere in the ballpark of your actual vehicle lease or financing payments, it’s important to take stock of the factors that determine how much you pay in auto insurance premiums. From there, you can ensure that you’re enrolled in the best type of coverage for your lifestyle.
Your Driving Reputation Precedes You
We’re sorry to say that the fender bender you got in last winter doesn’t just disappear along with the melting snow. Or maybe you went through a James Dean-inspired rebellious phase a few years ago and racked up quite a few speeding tickets in a short period of time. It’s also possible that you’re a squeaky clean driver, in which case you enjoy generally lower premiums. Accidents and serious traffic violations raise auto insurance rates because in any reputable carrier’s eyes; more violations indicate riskier driving behavior and thus the likelihood that you’ll make a claim. Luckily, you can consciously work to improve your driving vigilance and habits and expect many types of blemishes on your record to decrease their impact after about five years.
You Don’t Have Ideal Coverage
It’s entirely possible that you’re at a point in your life where it would be useful to carefully evaluate your monthly expenses and identify the areas where you’re paying more than you need to. Are you currently enrolled for expensive collision coverage on an old vehicle that you drive only occasionally? You might find that liability auto insurance is the most cost-effective way to get the basic coverage you need. It’s worth at least double checking that the policy you pay for is the best option for you, because the worst-case scenario is that you spend a few hours of your time confirming that your auto insurance policy has you ideally covered if the unforeseen should occur.
It’s Not Personal—It’s Your Vehicle
Every movie breakup includes an ‘it’s not you, it’s me’ speech, and that may also be the case for your car. Auto insurance premiums factor in the type of vehicle insured, so those sliding behind the wheel of a shiny sports car are going to pay differently than someone who drives a dependable sedan, for example.
According to Kelley Blue Book, here are some quick rules of thumb to apply when you’re assessing how the vehicle you drive is affecting your car insurance rates:
* Cars with a higher MSRP generally call for higher premiums because luxury models cost more to fix or replace. If you’re looking to save, opt for a more modest vehicle with a solid safety rating.
* You might derive great satisfaction from the commanding rev of your engine, but vehicles with higher horsepower signal to insurance companies that there’s an increased risk of an accident related to speed. If you really want to save on your premium, opt for a trim package with a more moderately powered engine.
* It’s worth it to research frequently and infrequently stolen types of cars, as owning a commonly targeted vehicle might translate to higher payments.
* Before you prioritize your need for speed with a sports car, it’s worth pondering whether you’re equipped to pay higher insurance premiums.
These three factors are quite important in evaluating why your car insurance costs you just about as much as your actual car does. With diligent research, it’s entirely possible to make sure that your car insurance costs are fitting into your budget while still meeting your coverage needs.