How to Estimate Car Insurance Before Buying a Car
Find out if you’re getting ripped off on your car insurance in less than two minutes.
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Thinking of buying a new or used car? The price you’ll pay for car insurance is dependent on a number of factors, including but not limited to:
- Your age
- The age of the car
- Your driving record
- The type of car you drive
Estimating how much insurance you need and how much you should pay can be tricky, as you’ll run the risk of either overpaying or under-insuring. Here's what you need to know to get it right.
Determine the Kind of Driver You Are
Determining your "driver profile" before calling an insurance agent can ensure you don’t get taken advantage of. Here’s what they’ll typically take into account to determine how much you'll pay:
- Your age and gender
- Your marital status
- Your credit score
- Your occupation
- Where you live
- Your driving record
Studies often show that young men have a higher accident rate than young women, and many insurance companies will take into account crash data from the National Highway Traffic Safety Administration (NHTSA). This typically means that a married middle-aged person with good credit and a steady job residing in a low-crime area would receive a lower rate compared to a single 21-year-old student living in a city.
Some insurance companies will even factor in what you do with the car. For example, if it’s used primarily for business, your rates can increase as you have a higher statistical probability of getting into an accident. On the flip side, your rates can drop if you simply don’t use your car that often.
Decide What Type of Car You Want to Buy
Generally speaking, the older and safer the car, the cheaper the insurance. When determining policy rates, car insurance companies will look at a car’s:
- Safety rating
- Likelihood of theft
Safety ratings are determined primarily by two agencies: the NHTSA and the Insurance Institute for Highway Safety (IIHS). Theft rates are frequently compiled by the National Insurance Crime Bureau (NICB) and are then coupled with your location. More often than not, high theft rates can overcome high safety ratings, causing a seemingly inexpensive car — say, a Honda Civic — to have higher-than-usual insurance rates.
Figure Out What Car Insurance Discounts You’re Eligible For
While the matter of discounts may be best addressed by a car insurance agent, the most common discounts available are:
- Safe driver
However, some lesser-known discounts may also be available, which can include:
- Good student
- Green vehicle
- Low mileage
- Safe vehicle
- AAA membership
- Defensive driving course
Because there are so many discounts available between the major agencies, it’s important to shop around. This will help you determine the least expensive way to get the best amount of coverage.