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Major Factors That Determine Car Insurance Prices

Major Factors That Determine Car Insurance Prices

Often when shopping around for auto insurance, you will encounter different prices and offers from different insurance companies who are all fighting for your business. For this reason, it is important to know how these companies work out the car insurance cost for your unique driver situation.

The first thing you need to know is that the newer the vehicle, the higher its insurance coverage will be, and this is for the simple fact that a brand new car is worth much more than an older vehicle. In addition, models that have a record of accidents resulting from manufacturer’s faults or models that have been recalled in the past attract higher insurance premiums, due to higher risk of a pay out. These two factors can help you decide on the type of vehicle to purchase if you are looking for the cheapest auto insurance.

Secondly: Your own driving record determines how much you will pay for insurance. Drivers who have caused accidents in the past usually pay a lot more than accident-free drivers. The latter also benefit from driver discounts which reduce the total amount they pay. According to statistics, accident rates are higher for drivers who are under 25 years old, so your age might also determine how much you will end up paying for your vehicle insurance.

If you use your vehicle for business or frequent travel, auto insurance will be higher than if your car is for personal or domestic uses. You  can also get cheap car insurance if you live in a small town or in a safe neighborhood, since chances of vandalism and car theft will be much less than in urban areas.

Your credit score can also be a factor in determining how much you will pay for insurance. If you have a less than perfect credit history due to issues like unemployment or excessive debt, it becomes a bit more difficult to get car insurance, but many companies now have manageable packages to insure your vehicle. Expenditures due to past accidents also reflect in your credit record, but if you search well, you can find individual insurance that takes this into account without penalizing you too severely.

Despite these factors, it is possible to get the cheapest insurance for your vehicle if you do a little leg work. Begin by getting cheap auto insurance quotes online to show you the best offers for insurance in your area. Many online auto insurance companies also offer discounts such as the above mentioned good driver discount, and others including low mileage discounts and senior’s discounts.

The different types of car insurance are also available at different prices, and most companies offer flexible payment methods that make it easier for you to make payments. For example, you can get  cheap car insurance like a liability only insurance policy available as a 6-month or 1-year policy payable in small, affordable installments.

Given this information, all kinds of drivers can find cheap insurance to suit their budget. Whether you have just bought your brand new car or if you have an accident history in your driving experience, you can estimate your car insurance cost and find the perfect affordable policy for you budget and needs.

-Mike

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