Thinking about buying a car? In addition to paying off your car loan and making sure you have enough money for gas, tolls, and repairs, you'll need to set aside a hefty chunk of change — about $900 a year on average — for insurance. Here are seven things that affect what you pay for your policy.
1. If you're female, expect a lower premium than male drivers. A 20-year-old male driver will pay 21 percent more than his female counterpart (fast-forward five years and the gap narrows to 4 percent). The reason? "Everyone likes to think they are a better driver than they are, but the fact is that, on average, men are riskier than women," says Michael Gardon, General Manager,The Simple Dollar. "Men are more likely to speed, get a DUI conviction, and get into more catastrophic accidents; [it's] not necessarily [about] a higher volume of accidents."
2. If you're single, be prepared to get stiffed. On average, an unmarried 20-year-old pays 21 percent more than her married counterpart for the same policy.
3. Make your credit card payments on time to lower your rate. If you maxed out your Visa card this year and skipped a payment or two, you could also be in for a higher premium. That's because "one factor that often gets overlooked is credit score," says Gardon. "Like it or not, credit score is a measure of financial responsibility, and insurance companies use credit scores as a predictor for your overall behavioral responsibility."
4. Take note of your neighborhood — insurers factor in higher rates of vandalism and accidents when pricing your policy. Car insurance may be more expensive for drivers living in densely populated cities. "Where you live and where the car is parked can affect the cost of your insurance," says Loretta L. Worters, vice president of communications, Insurance Information Institute. "Generally, due to higher rates of vandalism, theft, and accidents, urban drivers pay a higher auto insurance price than those in small towns or rural areas."
5. Keep in mind that your car influences how much you pay. Insurers put a lot of stock in the car they're covering. It's not just about how safe the car is to drive and how well it protects occupants, but insurance companies "also look at the potential damage a car can inflict on another car," Worters says. "If a specific car has a higher chance of inflicting damage on another car and its occupants, some insurers may charge more for liability insurance."
6. You can lower your premium as early as six months after getting insured. Regularly paying your insurance on time each month won't just keep late fees at bay. Do it for half a year, and you could cash in on extra savings. "Stay insured continuously for over six months to get a loyalty or persistency insurance discount," says Jackie Vaughn, insurance advisor team lead at CoverHound, a site that compares car insurance plans.
The bottom line is that insurance companies want to your business and will offer tons of incentives to retain it. Ask about discounts on everything, especially if you've got more than one car or policy.
7. Think twice before cashing in on small claims — doing so regularly can raise your rate. Chances are you'll end the year with a few bumps, dings, and scratches on your fenders. But should you tap into your insurance to fix them? While you may be tempted to file a claim for that passenger-side dent, it may be wiser to pay out of pocket. That's because filing successive small claims can cause your insurance carrier to see you as a risky driver and raise your premium, often more than what you would have paid had you not filed these claims. A 2015 study found that drivers who make one claim of $2,000 or more end up paying an average of 41 percent more for car insurance.
0 comments:
Post a Comment