Everything You Need to Know About How Much Auto Insurance Costs: How much do you pay for auto insurance? It’s an easy question, but the answer isn’t always straightforward. Factors like the vehicle you drive, your driving record, and your age can affect how much you pay each month—and how much you could save with certain discounts or with an insurance policy that offers more coverage at a lower cost.
car insurance rates are based on risk factors
The two most common factors that affect car insurance rates are where you live and your driving record. Certain cities have higher accident rates than others, so it makes sense that those places would also have higher premiums. If you’re on a good driving record, then your auto insurance company will likely give you a discount on your premiums. Your credit score could also influence how much is auto insurance; if you’ve got excellent credit, then your chances of being approved for cheap car insurance are better. It all makes sense: premium customers get cheaper prices!
Know your risk factors for a cheaper quote
This year, U.S. drivers will spend a total of $194 billion on auto insurance. That’s an average of about $880 per driver! However, your actual cost depends on how risky you are as a driver, your location, and other factors like if you use winter tires or drive for a ride-sharing service. Here are some risk factors that may result in higher rates: (1) Having one at-fault accident; (2) Being young and/or male; (3) Driving for Uber or Lyft instead of driving commercially; (4) Living in a city or high-crime area; (5) Increasing coverage from liability to comprehensive and collision.
Compare quotes from multiple companies
There are all sorts of things that affect how much auto insurance costs. In general, people who live in urban areas (or at least near their jobs) pay more for car insurance than people who live in rural or suburban areas because there’s a higher likelihood that those drivers will be involved in an accident. The more accidents you have on your record, and what kind of accidents they were, will also change how much you pay for car insurance. If you are under 25 years old, it is likely that you’ll pay more for car insurance than someone older because younger drivers are statistically more likely to be involved in an accident. And as we age, our driving skills diminish, so our premiums increase too.
Take advantage of discounts
Deductibles are a component of your insurance premium. The higher your deductible, the lower your premium. The best way to find out how much money you can save by increasing your deductible is to talk with an agent in person or over the phone and see what they say. Simply ask them: If I increase my deductible, what kind of discount could I get on my premium? More often than not, you’ll get a decent discount if you bump up your policy’s deductible amount. And that’s money back in your pocket!
Take time to review policy details
The amount of coverage you need—and how much you’ll pay for it—depends on your car, insurance provider, driving record, and location. Driving a gas guzzler in an area with high rates might cost you more than $2,000 per year; opting for basic liability coverage could bring that down to around $500. Talk with an agent who’s well-versed in your region’s laws and practices: They can help you decide how much is auto insurance really worth for you.
