Factors That Impact Your Auto Insurance Cost

Auto insurance cost is always the mind of the financially prudent. Some drivers face rising premiums, but don't understand why the cost of their insurance continues to rise. When the time comes to renew your policy, you'll want to know all of the factors that impact your auto insurance cost.

Your Car

The make and model of your car is one of the biggest factors affecting auto insurance cost. Generally, the more expensive the car, the more expensive it is to insure. Makes sense, right? Expensive cars usually have expensive parts. Expensive parts mean expensive labor. And anything expensive means that your insurance premium may be higher than you'd like.

Your auto insurance cost also depends on the safety rating of your car. Does it include ABS braking system and/or airbags? Your car's safety rating is a factor because, if you're driving a safe car, you're less likely to be injured in an accident.

Your Driving History

Your driving history has a big impact on your auto insurance cost. In particular, traffic tickets and accidents can affect the cost of your premium.
  • Traffic Tickets: Though traffic tickets only dent your wallet, they are tracked by your auto insurance company. If you receive a high number of tickets, your policy is flagged as "high risk" and your insurance is likely to increase.
  • Traffic Accidents: Traffic accidents cost both you and your insurance company. The more accidents you're involved in, the higher your premium will be. Your insurance company can and will cancel your policy if your driving history proves you to be a liability.
Where you Live

If you live in a high-traffic, urban area, your auto insurance cost will be more expensive than if you live in a slow-paced, rural town. This is not only due to the number of cars on the road and the potential for accidents, but because living in a populated, urban area puts cars at a greater risk of being stolen or broken into.

Your Age

Younger drivers (under the age of 25) are more expensive to insure because they are inexperienced behind the wheel. Auto insurance companies consider older drivers to be safer and more responsible drivers; therefore, they are considered lower risk on the road.

How Much You Drive

If you work from home and don't have a commute, or if your car sits in the garage most of the time, your auto insurance cost will be much, much less than if you drive 15,000 miles a year. Insurers will often ask how many miles you average per year so that they can get an idea of your potential risk.

Your Credit History

As if you needed another reason to keep your credit in check! Auto insurance companies often check your credit history to see if you pay bills on time. Those who do not pay bills on time are considered less responsible and often receive a higher insurance premium.


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