Factors affecting the cost of car insurance


Buying car insurance is an evitable investment for many reasons. A right insurance plan can save you from a lot of hassle by sharing the responsibility and payment issues in case of an accident or damage. However, buying car insurance can be perplexing sometimes. Many companies offer different plans with different costs, deductibles, add-ons and other features that make it difficult to find the right one. You can look for online portals like the iSelect which facilitates the research and comparison. If you are concerned about the cost of the insurance, you should know the factors which affect the cost. It will help you make an informed decision and know how you can reduce the cost.

Demographic Factors

Many demographic factors related can significantly affect the overall price of your car insurance. Below are the general demographic factors, however, these may differ for different states.


This factor does not result in a drastic difference in the price you need to pay for the premium. But, it can still impact the cost to a certain extent. Young boys often need to pay more for car insurance as they are statistically more prone to accidents. For older men can get the plan at a lower cost as they are less expected to drive fast and rash and lend into any unfortunate situation.

Living location

You are more likely to drive your car in the area or city you live in. This determines the traffic that you will be facing every day and thus the likelihood of the accidents. Your location and particularly your neighborhood also gives an idea about the chances of theft and damage due to environmental factors.

Credit scores

Your credit scores are the best indicators of your financial ability to pay the premiums. They tell you about your payment history, debts, etc. Having a poor credit score can make it difficult for you to get a good insurance deal.

Car-related factors

Ultimately, the insurance you are buying is for your car. So, it has to be the central criteria to decide the cost. Factors related to the vehicle that impact the cost include the following.

Car’s model and safety features

Different car makes and models have different safety ratings that are the indicators of the possible damage to the vehicle, passenger, and others in case of an accident. Cars with better safety features can get you better insurance deals.

Age of the vehicle

Older cars often get more damaged as compared to the newer once, in accidents. The cost of repair of the older car may not worth considering its life and services it can offer you.  Most old car owners generally consider getting it totaled and buy a new one. For that reason, insurance for such cars can be less expensive.

Driving factors

Your driving records also contribute to the cost of insurance. Prominent factors are:

Driving history

Your driving history including the number of times you have received tickets, the number of claims you have submitted due to accidents, etc.

indicates how safe your driving is. If you have a history of risky driving, you would have to pay more for car insurance.

Driving activities

The cost of insurance also depends on the way you are going to use your car. If you are using it commercially, it would be on roads more and will have more wear. This would increase your costs.

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