Young people who have little experience “adulting” may find the world of car insurance quite difficult to understand. Car insurance rates are nearly a mysterious sanskrit language to our nation’s younger generation, and it is time to try and set the record straight.
Education is the way to success, and the more you know about how your car insurance policy is priced, the better deal you will get. Don’t play the fool next time you seek out an insurance quote, and check out a few factors that will affect the rates you are offered.
Your age
Most people know that age has something to do with their insurance quote, but few really know why or how their age affects their price quote. Here are a few guidelines to explain the impact of age on your car insurance rates.
If you are under the age of 25 or over the age of 75, then your rates will be much higher than the middle of the age ranges. Studies have shown that people below 25 and above 75 are far more likely to be involved in an accident than those in other age categories.
Your address
Your insurance agent probably knows far more about your neighborhood than you do. The place where your car will be sitting and driven the most is super influential to the price you will pay for coverage.
If you live in an urban area, where your car is parked on the street, then you may pay more for insurance. It is riskier to park your car on the street all night than it is to park it in your front driveway (statistically speaking).
The make and model of the car
It’s common knowledge that the kind of car you roll in can impact how much you shell out for insurance. Cruising in a red sports car? Well, brace yourself for higher premiums compared to the more modest white minivan.
But wait, there’s more. If you’re rocking a used car, your insurance company might want the scoop from a Carfax report. This report provides the details of the car’s history, like who owned it before and any bumps and bruises it’s been through. Getting this report is pretty easy; you can hop onto online platforms that can provide you with a cheap carfax report. Just punch in the vehicle identification number (VIN), and you’ll get the scoop on your car’s history without burning a hole in your pocket.
Your credit score
It has been determined that more than 90 percent of insurance companies will use your credit score to determine pricing. The lower your credit score, the higher your premiums. Evidently, car insurance risk assessments find that if you are bad with money, then you must be a risky driver.
Driving record and intended purpose
Of course, your driving history matters to insurance companies, but they also consider how you plan to use your vehicle. If you drive 80 miles to work every day, your insurance will cost more. If you work from home, you’ll get a break in pricing.
