How to Estimate Car Insurance Costs Before Buying a Car
Even savvy automobile buyers occasionally fail to factor in the cost of their insurance before making a purchase. The price of car insurance for the same driver might vary by hundreds of dollars a year depending on the vehicle and insurance provider.
Use the vehicle insurance estimator on NerdWallet to find out what full coverage would cost in your region.
It is beneficial to obtain preliminary car insurance rates for the models you are considering purchasing. When figuring out the total cost of owning a car, you need also take gas mileage and maintenance into consideration.
According to NerdWallet’s 2021 rate research, the average annual cost for “full coverage” car insurance is $1,592. However, among other things, the car you buy will affect your rates. Full coverage auto insurance is not a particular kind of plan. Instead, it describes a mix of coverages. Liability, comprehensive, collision, uninsured/underinsured motorist protection, and any other state-mandated coverage are all considered to be part of full coverage for the purposes of our rate study.
How to calculate the price of auto insurance
For a precise vehicle insurance estimate, follow these steps:
Reduce the number of vehicles you like most. Discover how to choose the ideal vehicle for you.
Determine how much protection you require. Include collision and comprehensive, which cover loss or damage to the vehicle, if you’re purchasing a new vehicle. You’ll need this insurance if you borrow money to buy a secondhand car since the lender will require it. If you’re unsure, vehicle insurance calculators are available on the websites of several insurers to assist you in determining your coverage requirements.
Obtain quotes for the same level of protection for the automobiles you’re considering purchasing. You can start by using the vehicle insurance comparison tool from NerdWallet.
Factors influencing the price of auto insurance
An auto insurance quote is based on a variety of factors, not only the brand and model of your car. Others consist of:
Age, gender, and marital status are examples of personal attributes. For instance, teen drivers typically pay more for auto insurance than any other age group.
the protection you select. Your insurance prices are likely to increase the more coverage you have.
your history of driving.
Your premiums may go up if you just received a DUI, a speeding ticket, or a liability accident.
Your address. The legal minimums for automobile insurance vary from state to state, and the cost of your insurance will be influenced by things like the crime rate and population density in your neighborhood.
your rating of credit.
Car insurance premiums are often higher for drivers with bad credit. To predict whether you’ll make a claim, insurers employ a credit-based insurance score that differs from your standard credit score. Payment history and outstanding debt are two criteria that go into calculating a credit-based insurance score; however, personal information like income or employment is not included.
Insurance companies are not allowed to utilize credit scores when determining auto insurance prices in California, Hawaii, and Massachusetts.
Your background with auto insurance. This can include insurance claims, whether your auto insurance has expired, how long you’ve been a customer of your insurer, and your previous insurance provider.
How much auto insurance is necessary
There are minimum insurance requirements in most states, but you should probably have more coverage than that. Some motorists choose to purchase complete coverage in order to better safeguard themselves from any kind of collision. Keep in mind that full coverage is typically a combination of necessary and optional coverages rather than a specific kind of insurance. Full coverage, however, does not cover all aspects. There may be a separate charge for add-ons like gap insurance and roadside assistance.
Why some vehicles require higher insurance
Because carriers base premiums for each model uniquely on collision and theft statistics, some automobiles are more expensive to insure than others. Therefore, it is likely that you will pay more for insurance if the vehicle you select has a higher rate of theft or accidents. Sports vehicles, for instance, are more expensive to insure because their owners are more likely to drive them quickly and wreck them hard.
Following are some unique vehicle features that influence auto insurance rates:
Retail cost. In general, the cost of insurance increases with the cost of the vehicle. If you choose comprehensive and collision insurance, the insurance provider will be responsible for paying the car’s market value if it is stolen or irreparably damaged.
Parts price. High-end versions frequently use parts made of carbon fiber and other expensive to fix specialist materials. The price of damage claims rises as a result.
Safety. Cars that safeguard drivers and passengers effectively over time reduce insurance costs. Less injuries mean less need for personal injury protection and medical payments.
Ranking the most affordable vehicles to insure
Saving money on auto insurance
Shopping around is the finest strategy for discovering the lowest vehicle insurance premiums. Look for a business with a solid reputation for customer service while comparing auto insurance prices.
Remember to compare prices for the same levels of coverage when you seek for auto insurance. Even if a business gives a specific discount, it could be more expensive than an insurer that provides affordable coverage all-around. Additionally, make sure to enquire with your insurer about any savings that may be absent from your insurance.
