Cheap Car Insurance: Factors that Affect Your Car Insurance Rates Part 1

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When it comes to auto insurance rates, who you are determines what you pay.

Automobile insurance premiums are based on a large number of factors, some of which you can control, and some of which, alas, are incontrovertible facts of life. Statistically, a sixteen-year old boy with a 300 horsepower sports car in a big city is far more likely to hit something than a 35 year-old married guy driving a minivan around the suburbs.

While you can?t change your age and some other factors, there are things that you can do to keep insurance premiums as low as possible.

Factors you CAN?T change that impact your auto insurance rates:

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Your age

Dick Clark and Sophia Loren notwithstanding, aging is unavoidable. And while you may be a mature-looking teen or a youthful octogenarian, the oldest and the youngest drivers are far more likely to have accidents.

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Gender

Whether it?s the mothering instinct or fewer NASCAR fantasies, women statistically make safer drivers.

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Marital Status

Ok, you can change this, but there have been no reports of people marrying simply to lower their insurance rates.

Factors you CAN change that impact your auto insurance rates:

Geography

Where you live matters.For instance, those living in rural America are far less likely to have a collision or a stolen car than those living in a city. But, sometimes even just moving across the street can change your rate.

Driving violations

Speeding tickets, running red lights, failure to yield, etc. all count toward your auto insurance rate.

Your vehicle

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If you must have that cherry red Corvette or the Ferrari Testarossa, be prepared to pay for it. Your insurance premiums will be higher.

Accident claims

While you can?t change the past, keeping your slate clean and free of accidents will hold you in better stead than lots ..... to be continued

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1. Shop around

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The difference in price between various companies can be significant. What one company may consider a high risk factor another company may not view as so important. Insurance companies arrive at a price for your car insurance by adding or discounting money after each answer you give to the questions they ask you. Each company has its own rules as to what they consider should increase or decrease your premium. By shopping around you get a better list of prices to compare.

2. Buy a lower group car

One of the important factors that insurance companies take into account is of course your vehicle. There are thousands of different cars on the road so companies divide them up into groups. Most companies will adopt the ABI (Association of British Insurers) group rating. This splits up vehicles into 20 different groups. Generally speaking the higher the group rating for your vehicle, the higher your premium will be. Some companies may also combine your driving experience with the vehicle group to get a better idea of how high the risk is. This is one of the reasons why young drivers should consider buying a lower group car if they want to lower their insurance cost.

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3. Consider Third Party Only cover

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A Third Party Only insurance policy is the minimum amount of cover legally required - it is also the cheapest. Generally speaking you should consider opting for this type of policy if your vehicle is of low value. In the unfortunate event of having an accident, any damage to a third party vehicle will be covered but any damage to your vehicle is not. However, if your vehicle is of little value then you may not be too concerned. It may not be worth paying extra for a Fully Comprehensive policy in these circumstances.

4. Maintain a good credit rating

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More and more insurance companies are adopting credit scoring techniques as part of the overall calculation of your car insurance premium. By keeping a good credit history you may avoid any additional premium that companies add to your price for having a bad credit score.

5. Buy on the web

Many insurance providers now offer some good discounts for buying the policy over the internet. The theory is that by purchasing your insurance over the web, you are saving the company money by not requiring telesales agent time and incurring free-phone costs. This saving is passed on to you in the form of a discount for buying online. If you have got prices by telephone then check your quote again on their website, you may be surprised at how much cheaper it is.

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6. Have a higher voluntary excess

During the quotation process you will be asked how much voluntary excess you want to have. Insurance companies will generally include a compulsory excess amount on the policy but give you the opportunity to increase this if you wish. The more the voluntary excess the lower your premium should be. However, in the event of a claim, you will have to pay a higher amount yourself, up to the total amount of excess on your policy.

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7. Reduce your annual mileage

How many miles you do a year is a common question that can affect your car insurance premium. The more miles you do the more your premium is likely to be. Quotation systems and telephone agents will often suggest an amount of miles for you. Try and work out how many miles you will genuinely do. It may be less than the amount suggested. Of course, you should always give an honest answer to this and other questions.

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8. Keep a clean driving record

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This may be easier said than done. However, by having few or preferably no driving convictions, you can avoid being penalised by increases in your car insurance premium. Getting caught with a speeding fine is often not the only financial penalty you incur. Insurance companies take very seriously all driving convictions and it is usually an important part of their rating process. You can expect an increase in the cost of your insurance if you do get caught with a driving conviction, so it pays to be a safe driver.

9. Keep claim free

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This ties in neatly with number 8 above. The biggest factor affecting the cost of your car insurance premium is how many No Claims Bonus Years you have. Full No Claims Bonus is generally considered by most companies to be five years or more, this can give you huge discounts, in some cases up to 75%. By being a safe driver and avoiding potential claims, you can continually benefit by building up your number of claim free years. Every additional No Claims Bonus year you get, the lower your car insurance cost should be. Some companies give you the option of paying a bit more on your premium to protect your No Claims Bonus.

10. Be realistic about the value of your car ..... companies offer lower premiums when your named drivers are insured and spouse as opposed to two unmarried drivers. Some companies believe that this shows an element of stability which is a hallmark of safer drivers and give you a discount on this basis.

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16. Premiuims increase because of other drivers at fault.

Do check whether if a named driver is involved in an accident which is not their fault whether your ppremiuinm will automatically go up!
Editor

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The Editor is Barrie Segal founder of

http://www.appealnow.com

and

http://www.supportourpolice.co.uk