How Much Does Car Insurance Cost Per Month?
Car Insurance
Car insurance payments are one of those annoying things we all have to deal with. Unfortunately, car insurance can also be quite expensive.
Nonetheless, the fact that it is illegal in almost every state to drive without insurance, makes it a necessity.
Still, insurance rates can vary quite a bit from person to person and vehicle to vehicle, which can make budgeting for insurance difficult.
With this in mind, here are the various factors that you’ll need to take into account to get a clearer estimate of how much your vehicle insurance will cost every month.
The Type of Vehicle You Drive and Its Value
The total value of your vehicle is one of the first things insurance companies take into account when determining rates.
It only makes sense that a more expensive vehicle will cost more to insure.
After all, the higher the value of the vehicle, the more the insurance company will have to pay out to have it repaired or replaced.
Insurance companies also charge different rates based on the type of vehicle.
In this case, sports cars and full-size trucks are usually much more expensive to insure than sedans and other smaller or less powerful vehicles.
Your Driving Record
Your driving record is also a huge factor in determining how much you can expect to pay.
If your record is mostly clean with no major accidents or traffic violations, you can obviously expect to pay far less.
Most insurance companies only take the last three to seven years of your driving record into account.
Any tickets you’ve received during this period or any accidents that were your fault will result in higher rates.
This is especially true if you have been charged with driving under the influence during this time.
In fact, some companies outright refuse to insure drivers who have been charged with a DUI, and some also won’t insure anyone with a reckless driving ticket on their record.
How Old You Are
Age is another determining factor in insurance rates.
Younger drivers are far less experienced and thus more expensive to insure. In most cases, the rates will drop off quite dramatically each year between 16 and 21.
The rates then start to level off once you reach your mid-20s to early 30s. Even after 30, you should still notice a small decline each year until you’re in your 50s.
However, most companies then start to raise their rates again once a driver reaches the age of 60.
The Level of Coverage and Insurance Provider
Not all insurance policies are the same, which means you also need to consider the level of coverage provided.
One of the easiest ways to get cheap car insurance is to simply choose a policy with a lower level of coverage.
Still, this could result in much larger out-of-pocket expenses should you get into an accident.
For this reason, it is also recommended to compare policies from multiple insurance providers.
You’ll often find that monthly premiums vary quite dramatically from one provider to the next even when comparing the same level of coverage.
For this reason, it is well worth your time to shop around and see what companies will offer you the best rates.
As you can see, determining how much you can expect to pay for auto insurance isn’t an exact science.
In fact, almost every company uses a different formula when determining insurance premiums.
Ensuring your vehicle is a necessary expense. Still, you could easily end up overpaying if you don’t take the time to do your homework before signing a contract.
Category: Insurance
