So you got your car, but in order to register it in most states, you have to have some kind of insurance for your car. There are many factors that influence how much you will pay for insuring your car. Rates depend on your age, driving experience, where you keep your car, driving history, vehicle, desired coverage and deductibles, and even your credit history.
*Shop around. There are many insurance carriers out there, and you can go to at least a few websites who will give you insurance rates from several companies. Such sites include insurance.com, esurance.com, and carinsurance.com.
*Age and Driving Experience: Controlling for other factors, the younger you are, the higher your insurance quote, and similar circumstances apply to those with not much driving experience. This is because younger drivers, especially teenagers, have higher accident rates than older drivers.
*Keep your car parked in the garage or another secured location when you don’t use it, and this especially applies to luxury cars with a sticker price of more than $50,000. This is because secured cars are less likely to be stolen and/or damaged, resulting in a lower risk of theft and damage claims. However, since theft coverage is part of the comprehensive coverage package, if you purchase liability coverage, it shouldn’t matter where you park the car.
*Anti-theft devices will reduce the risk of a theft claim, and thus your insurance rates. Such devices include steering wheel locks, engine immobilizers, and vehicle alarms.
*Generally, the flashier the vehicle, the more expensive it will cost to insure it. This especially applies to luxury vehicles (see above) and vehicles that are coveted by thieves.
*Maintain a good driving record. Having an accident or major violation (DUI, reckless, speeding more than 30mph over, racing, etc) in the last 3 to 5 years, depending on how far back the insurance company will look, will drastically increase your insurance premiums. With multiple accidents or major violations, many insurance companies will revoke, refuse to renew, or deny coverage. This is because a major violation or a multiple minor violations increase the risk of an insurance claim (such as an accident), and thus, the insurance premium. If need be, take a defensive driving course, which will either reduce your point total, insurance premium, or both.
*Do you really need full coverage? If your vehicle is over 10 years old, it would be better if you only purchase liability insurance. This is because older vehicles are less technologically advanced than newer vehicles, leading to less expensive repairs and less expensive insurance claims. Besides, full coverage (liability + collision + comprehensive) costs around twice as much as liability-only coverage.
*Choose a higher deductible. If you get full coverage, you will have to choose a deductible for the collision and comprehensive portions. A deductible is the amount you have to pay out of pocket in the event of an accident or damage before the insurance company pays your claim. For instance, with a $500 deductible, you are liable for the first $500 of damages and the insurance company pays the rest.
*Maintain a good credit history. When you request a quote, you authorize insurance companies to order your credit report, and many insurance companies assign a financial risk score, which is used to determine your quote. Bankruptcies, past due bills, delinquencies, and multiple late payments increase your insurance rate.