At some point you're going to be in the market for your next car, be it used or new. If you've narrowed your search down to the type of vehicle you'd like to own, you should check car insurance rates before you buy.
It’s not uncommon for people to buy a new car without any giving any thought to the insurance rates. In some cases, the monthly insurance premium can be more than the monthly car payments. A surprise like that can be avoided simply by checking insurance rates before you buy.
How are car insurance rates determined?
The main factors that influence your insurance rates are:
- Your driving record
- Your insurance claims history
- Your credit history (in some states)
- Your zip code
- The cost of repairs to your car
- The cost of injuries to people injured in that car
The last two items are affected by the type of car you choose. A more expensive car will typically cost more to repair, hence the higher premiums. And cars with poor safety ratings will also cost more to insure.
One of your first stops when researching a new car should be to the Insurance Institute for Highway Safety for a review of your vehicle. If your car has poor ratings in any category, realize that there is potential for this to negatively impact your insurance rate. Their website is: www.iihs.org.
Keeping your car insurance premium in check
Once you do have your car, there are a number of steps you can take to ensure that your premium doesn't escalate substantially later. These include:
Being smart about filing insurance claims. Do you have some minor damage to your car? Consider paying for the cost of the repair before you file an insurance claim if the cost of the repair is close to or just slightly higher than your deductible.
If you have been involved in an accident and there are injuries, file a claim without hesitation. This is a scenario where you should involve your insurance carrier immediately to help protect yourself, particularly if you believe the other driver was at fault.
Have you been pulled over and ticketed for speeding? You can often avoid having it show up on your record if you pay the fine and take a special safe-driving course offered through providers that contract with your state Department of Motor Vehicles. The cost of the defensive-driving class is far less than the increased cost to your insurance rate.
Maintain your credit/insurance score by heeding the following tips.
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- Pay your bills on time
- Avoid excessive inquiries into your credit reports
- Limit the number of credit accounts you have
- Review your credit report annually
- Limit the amount of new debt you take on
- Work with creditors to resolve outstanding balances before they are turned over to collection agencies