Talking About Auto Insurance Options

3 Factors That Affect The Cost Of Your Auto Insurance

by Megan Ortiz

If you're in the market for a new automobile,  it is important to only select a vehicle that you can truly afford. However, as you consider the cost of a new car or truck, you should also consider the cost of other essential car-related expenses, such as auto insurance. It is illegal to drive without auto insurance. Thus, you will need to find affordable coverage. Here are a few factors that can impact the cost of your auto insurance:

How expensive is the vehicle?

If you select an automobile that is expensive, it is important to know that the value of the vehicle will impact the cost of your automobile insurance. If your car is totaled in an accident, the amount provided by the insurance company to replace your vehicle will be based on its value. As a result, the auto insurer's risk is greater for a more expensive vehicle.

Credit Score

Auto insurers often check your credit score to determine a risk level. People with a poor credit score are usually a greater risk for the insurance company. As a result, if your credit score is low, you can expect to pay more for your automotive coverage.

Nevertheless, you can take measures to improve your score prior to obtaining your insurance. If you don't plan to purchase a vehicle within the next few weeks, you should have time for the changes to take effect.

Be sure to order a copy of your credit report. Most major credit reporting agencies allow you to order a free report once per year. If you notice erroneous information on the report, dispute it. The information can be removed if the judgment is favorable or if the creditor fails to respond in a timely manner.

In addition, pay off any lingering balances that are past due and don't pursue additional credit until after the purchase of your insurance. When a lender checks your credit at your request, your credit rating goes down temporarily.

Select a Vehicle with Safety Features

Some vehicles are cheaper to insure because of safety features, such as a security system and side airbags. Features that help protect the occupants of your car can lessen the insurance company's risk of having to pay hefty medical bills. Likewise, theft-deterrent systems can help keep your vehicle and valuables safe so that the insurance company never has to replace them.

For more ways to lower the cost of your automobile insurance, schedule an appointment with an auto insurance professional in your area.