Are you shopping around for car insurance and feel confused as to why you're receiving different rate quotes from different providers? If so, it will help to know what factors impact your car insurance rates.
1. Your Vehicle
The type of car that you drive will make a big impact on your auto insurance rates. This is due to your insurance company needing to cover the replacement cost of your vehicle, and one that is newer and more expensive is going to have a bigger impact on how much will potentially have to be paid out. Meanwhile, an older car that is worth much less will be less of a liability for insurance providers.
2. Your Driving History
Your insurance provider will also take a look at your personal driving history when determining your rates. If you have a history of getting speeding tickets or been in accidents in the past, you will be seen as a higher risk than another driver without those problems. You can expect to pay more in premiums simply because it is assumed that you'll demonstrate risky driving behavior in the future.
3. Your Driving Experience
One factor that you have no control over is your age. Young drivers will have less experience than older drivers, which means they are more likely to get into an accident and use their auto insurance. However, age is not the only thing factored when getting car insurance. It is possible for insurance providers to see how long you've been driving. If you got your driver's license later in life, you will still be considered a new driver and receive higher rates as if you were 16 years old.
4. Your Location
The area where you live is factored into your auto insurance rates. Being located in a big city makes you more at risk of getting into an accident. Crime also plays a factor in whether your vehicle will be broken into or stolen. While you don't have a lot of control over these factors, it's worth knowing that they are a factor.
5. Your Credit History
Were you aware that your credit history actually will determine how much you pay for car insurance? This is because insurance providers try to gauge how responsible you are behind the wheel by how responsible you are with your money. If you have a lot of loans and debt on your credit report, insurance companies may respond with a higher rate because you may take chances behind the wheel.