Car-Related Factors That Affect Your Insurance Rates

Oct 17, 15 Car-Related Factors That Affect Your Insurance Rates

There are many other factors that can either raise or lower your overall insurance rates. Two most obvious factors include the amount of deductibles and the amount of coverage. But aside from these two, there are still a lot of factors that come into play when determining your insurance costs.

Demographic factors such as age, gender, marital status, profession, geographical location and credit score are a few factors that affect insurance in various ways. But these factors are not as significant as the condition of the car you drive. So here we take a look at some car-related factors that may affect your insurance rates.

  • Car Safety Rating 

be safe while driving or this will happenIf your vehicle has a high safety rating, then the chances of unwanted accidents or damages are lower – thus, the insurance rates are likely to be lower. On the other hand, if your car lacks safety features, expect to pay higher premium.

There are several factors that determine safety rating, which includes the possibility of the vehicle owner and passengers being injured in an accident. Automatic seat belts, airbags, emergency braking system, and traction control are some safety features that can help lessen the likelihood of accident and injuries. Of course, other car accessories, such as LED light (find out more here), can help keep your vehicle safer but will usually have no effect on your insurance rates.

  • Vehicle size

Compared to larger vehicles, smaller vehicles have higher risk of getting into trouble, that’s why they also come with higher insurance rates. Normally, larger vehicles with reliable safety features will tend to have lower premiums. In contrast, smaller cars with larger engines, such as sports car, will have costly insurance.

  • Vehicle age

Newer vehicles will usually have higher collision coverage rates than older ones, thus they also come with higher premiums. Some people who own very old cars would even drop the collision coverage and instead save the money to purchase a replacement in case of an accident. Moreover, owners are more likely to replace an older vehicle instead of spending on costly repairs.

  • Possibility of theft

Luxury cars are more likely targets of thieves and other lawless elements. If your vehicle is a hot item for thieves, then you can expect higher rates. However, you can invest on anti-theft features, such as alarms, to help lower your premium.

Aside from these four car-related factors, your personal driving record can have a major influence in your insurance costs. Having a bad record can raise your premium; some insurance providers may even refuse your application. Moreover, insurance companies would also consider your driving activity. The distance you drive, how often you drive and the types of roads you drive on can all affect the likelihood of an accident. Obviously, if you drive more, there’s a higher possibility of an accident and therefore a higher rate.

Knowing these factors can help you make a more informed decision when purchasing auto insurance. And more importantly, you can do things to help lower down your rates.