Top 4 Things That Affect Your Car Insurance Rates

insurance rates

Did you know that the countrywide average auto insurance expenditure rises by more than 5 percent each year?

In 2018, the average cost to own and operate a 2018 model vehicle was $8,849. Out of the total cost, a whopping $1,232 accounted just for the insurance. The only way to get a low insurance rate is by satisfying all the conditions that the car insurance agencies have set for a new applicant.

insurance rates

Here are the top 4 things that affect your car insurance rates.

1. Gender

According to a report by the Insurance Institute for Highway Safety, males(and not females) are more likely to get into a fatal accident. Gone are the days when people use to make fun of clumsy female driver. They are doing quite well with their driving.

The reason behind this fact could just be a numbers game as males drive more miles each year than females. But the insurance companies do not consider it as a number game. Car insurance rates for both males and females are equal when they are in their 30s-50s. They begin to skyrocket for men once they hit the 60s.

2. Age

Ask any car insurance agent and they will say “The younger the driver, higher will be the insurance rate”. This makes total sense, as young people are more likely to get in a fatal accident(as a result of alcohol consumption or aggressiveness).

The older a person gets, the less likely it is that they will engage in reckless driving. Hence, this gives car insurance companies leverage to offer low-interest rates for older people(less than 60).

3. Location

Do you stay in a small town or you are a city guy/girl? This might seem silly to some people but your location does affect your car insurance rates. People staying in urban areas pay a higher car insurance rate than those from a rural area. Also, things like the population, condition of the roads, weather, culture, etc factor in while calculating your car insurance rates.

4. Credit score

The credit score is one factor that might or might not affect your insurance rates. Some states allow the credit score to considered while calculating the rates while others express complete disapproval of it.

As a rule of thumb, whether the credit a score is taken into consideration or not, applicants with a low credit score are likely to get approved with a high-interest rate. There is no clear explanation for this but this is true from what I know.


The purpose of sharing the above 4 factors is to make you aware of how your car insurance premiums are affecting your finances. I know many people for whom, paying a sum of $8,849 annually is daunting.

If this sounds like you, you need to look at other factors(Previous insurance coverage, Years of driving experience, your criminal record, Vehicle age and size, Miles drove until now, etc) as well and make sure you tick all the boxes. To your relief, these factors are fixed and known.

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