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Does Your Car Affect Your Auto Insurance Rates?

by Raymond Gibson

When you drive a car, you must have auto insurance. Auto insurance is a legal requirement, and it protects you and others. But how do agents calculate the costs of your policy? Does your car affect the rates? Many people know that their vehicles affect their rates but aren't sure how. Here is an explanation of your car's effects on the rates you pay for auto insurance coverage.

Your car's value

The agent asks for your car information when you request an auto insurance quote. For example, what year, make, and model is it? What's the VIN? Agents need this information to determine your car's value, as the value affects the plan. Of course, agents factor in many things, including the value, to determine your policy costs. The value of your vehicle affects how much the insurance company pays if you wreck the car. Thus, higher-valued cars will cost more to insure than cheaper cars.

Safety ratings

Next, your car has safety ratings, and the agent will look at these. Safer cars cost less to insure, as they might encounter less damage from a collision. So you can save money by choosing a car with excellent ratings.

Coverage types

One of the primary factors affecting rates is your coverage type. Of course, your car affects what types you choose. First, is your car paid off? If so, you can choose less coverage, which means you'll pay less. You must select more coverage if you have a loan, as lenders require full coverage on vehicles with loans. Thus, you'll pay more if you choose full coverage vs. liability insurance.

Driving record

While all the factors listed so far affect your car insurance rates, your driving record is another factor. Insurance agents label people by risk. A high-risk person pays higher rates, while a low-risk person pays lower rates. As a result, your driving record also affects the costs of insuring your vehicle. If you have a blemish-free record, you'll save money on auto insurance rates.

Learn more about auto insurance plans

Having auto insurance is necessary for all drivers, but you don't have to overspend on your policy. You have the freedom to shop around to find the best deal for the coverage you need. You can also choose what car you drive next time you shop for a different vehicle, as you can see the car's effects on your plan.

Contact an insurance agent for help with picking out an auto insurance policy.