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Factors That Determine Used Car Insurance Rates

Car InsuranceAuto insurance is required in most states, although the minimum requirements will vary. Before purchasing any new vehicle, even a used one, it’s important to consider the costs of the auto insurance policy and the factors that go into determining that cost. Doing so will ensure that you’re coming in under budget while still getting the coverage you need.

Vehicle Safety
The price of your insurance policy greatly depends on the make and model of the vehicle, but the individual car’s history can also play a part. When buying from a dealer, be sure to ask for the car’s history report. More specifically, you need to know if the car has ever been in an accident, if the transmission was ever changed, and if it underwent other extensive repairs. If so, you may be looking at a higher insurance rate.

Driver Age
Buying a used car is ideal for teens that are just learning to drive, but insurance rates are often higher for this age group. Teen and young adult males under the age of 25 will see the most expensive car insurance rates, so a safer, more reliable vehicle can help to cut these insurance costs.

Where You Live
Drivers that live in a city and park their cars in the street can expect to pay more for car insurance. This is because most insurance companies see this as a hazard, and that keeping cars safely off the road or in a garage means you’re less likely to file a claim.

Your Driving Record
Auto insurance rates do take into account your personal driving record, and traffic fines, speeding tickets, and even minor accidents can do a number on your rate. Reducing an insurance rate that has been raised due to poor driving, however, can be remedied. Inquire about any defensive driving or driver safety courses you can take to help reduce your premiums.

Collision Coverage Needs
Pre-owned vehicles often do not require the amounts of collision and comprehensive that brand new vehicles do. Keep in mind that a lender may require you to keep certain amounts of coverage, so ask about this before cutting it. Once you have paid off the car loan, it’s up to you to decide how much insurance coverage you need, as long as it meets your state’s minimum requirements.

Deductible Requirements
High deductibles keep premiums low, which translates into savings every month. It’s easier to get away with high deductibles on a used car because you can skip the cosmetic repairs you would want fixed on a newer model. As long as the car is mechanically sound, it shouldn’t be a problem unless you are involved in an accident. However, unless you’re prepare to sell car for scrap parts, or you have the funds to meet a higher deductible, this may not be the best plan.

Credit Score
Maintaining a good credit history matters not only when you apply for a car loan, but also when you get insurance on the vehicle. Working to bump up your credit score will have beneficial effects across the board.


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