A better way to shop for a car while keeping future insurance premiums in mind is to understand the factors that go into how insurance companies compute premiums based upon differences in car models.
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Many people go out and choose a car to buy based solely on a handful of factors, such as the way it looks, safety ratings, engine power, handling, and perceived quality, and of course, price. However, a handful of cost-conscious and prudent buyers think even a bit further ahead, considering such factors as maintenance costs and the cost of car insurance.
One way to figure out the cost of insurance for each car model you are considering buying is to simply call up your insurance agent and rattle off your list of models. However, that is time-consuming, and it also means you have to keep going back to ask for more information if you get new car model ideas later.
How can I get cheap car insurance?
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- Choose your car wisely.
- Increase your voluntary excess.
- Limit your mileage.
- Build up a no claims discount.
- Consider a telematics policy – also known as black box insurance.
If you are looking for the car models with the cheapest insurance rate, learn about these five factors that influence car insurance rates:
1. Lower cost equals low insurance premium:
Start by understanding this simple rule: cars that cost less to buy also tend to cost less to insure. So, while the price of the model you are considering will affect how much you pay for monthly auto payments, it will also affect the amount you pay in insurance.
2. The degree of car-driving pleasure:
Your insurance premiums will also be kept as low as possible if you find a car that is not known for being fun to drive. The more that the car is built to be fun to drive, the higher the rates. Sound like a cruel insurance industry trick? This rule of thumb actually has some very sensible underpinnings. Cars with more horsepower and sport-tuned suspension are going to be driven harder and more dangerously, on average. Think of the danger factor in mini-van vs. Porsche.
3. Profile of the average person who drives that car:
Insurance companies keep tabs on profiles of what the average driver of each given model is like. They base their rates in part on this profile. What drives up costs are profiles with factors like the tendency for driving during peak commuting hours, driving at night, and driving aggressively.
4. A car that ranks in terms of auto thefts:
Quite simply, cars that get stolen more often are more costly to insure. This makes sense, of course: the insurance company anticipates that there is a higher likelihood that your car will get stolen if you buy a frequently-stolen model. This means bigger dollar signs for your premiums.
5. Safety record and features:
Cars with a better safety record and which are equipped with more safety features naturally pose lower medical bill-related claims risks and, this will translate to a lower auto insurance premium for you to pay.
Keep these five factors in mind as you look for the car with the cheapest insurance rate for teens.
What type of car insurance do I need?
The type of insurance you need depends on the level of cover you want. There are three different types.
Third party only covers you for injury or damage you cause to other people.
Third party insurance only covers the cost of compensating other people for injury or damage you cause.