Car insurance rates per month depend on several factors. It’s important to have an estimate of how much insurance will cost you per month before purchasing a new or used vehicle. By having some idea of what your monthly car payment and insurance costs will be, you can prepare yourself and your budget.

What are some of the common factors in car insurance rates?

Your driving record is a big determinant on how much you will pay monthly for car insurance. Drivers, who have clean records with no tickets or accidents, do not pay nearly as much as drivers who have accidents or moving violations. While car most insurance companies only look three years back in someone’s driving record, some will look back five years. The best bet to ensure cheap car insurance is to obey the rules of the road.

Your Age

Your age is another factor in how much you will pay per month. Younger drivers pay much more in premiums than those who are older. With most teenagers, getting their license at age 16, a five-year period is usually all it takes to get a lower rate. By the age of 21 and for some insurance companies, 25, your insurance rate should drop substantially.

Your Credit Score

Your credit score not only affects how much your ability to get a car loan, but it can affect your monthly insurance payments. Research has shown a direct correlation to those with poor credit and claims filed. This leads to the assumption that people who make poor decisions towards their credit are at higher risk of making poor decisions on the road. However, some states do not allow the use of credit scores as a factor when calculating rates. Insurance companies then have to focus on other factors when determining premiums.

Type of Vehicle Insured

The car you are insuring is another factor when seeking auto insurance. Some vehicles command higher car insurance premiums for several factors. Vehicles can be rated on their:

• Replacement value
• Safety Ratings
• Vehicle Safety Features

Sports cars and/or exotic cars also tend to be more costly to insure than your standard vehicles.

Where you Live

Your geographic location can also affect your monthly insurance premiums. Insurance rates can differ depending on which state you live in. The differences account for such determinants as the state’s insurance laws and statistical analysis of accidents in an individual state, among others.

What is the average cost for car insurance in the U.S.?

The average annual cost of car insurance in the United States was $795 according to data compiled by the National Association of Insurance Commissioners (NAIC) in 2007. However, this average is across all states, with some having higher yearly averages. For example, New York and Florida had different averages that were over $1000, while Pennsylvania, Texas, and California all had averages in the low $800 range.

According to the NAIC information, states with higher rates tended to be more urban areas. With these areas come higher wages and vehicles that are more expensive. Urban areas tend to have higher traffic volumes, which can cause more accidents. In addition, more auto thefts are reported in urban areas versus rural areas.

How can I obtain cheap car insurance?

The best way to find the cheapest car insurance is to shop around. Don’t settle for just one or two quotes, due your research and find rates for as many different car insurance companies that are available to you.

Many car insurance companies give age-based discounts to drivers. While, it’s a well known fact that by the age of 25 your car insurance can drop as much as 20%, what many don’t know is that you could be eligible for more discounts every year beyond 25.  Although most age-based discounts stop when you reach your 50s make sure to check every year to see if you’re eligible for any more discounts as they are plenty around.

The type of vehicle you are trying to insure can make a difference in your premium. While most believe new cars are more expensive to insure than older cars, this is not always the case. Some car insurance companies charge higher rates for used vehicles than those that are new since the cost of repair can sometimes be much more expensive than a new vehicle.

Vehicles that are luxury vehicles tend to cost more to insurance as well. There’s an increased risk of accidents for sports cars because they are capable of greater speeds. Another consideration is that luxury vehicle parts cost much to replace.

Try to stay insured with one company

One way to save on your car insurance is to bring all your business to one insurance company. Just like cable/satellite companies, there are benefits to bundling your services. If you have health, life, travel, and even dental you might be able to get a great rate on all of these and your car insurance for sticking with one company.

If you have an excellent car insurance company, then stick with them. Car Insurance companies often offer benefits to loyal customers. Build a relationship with your insurance agent and they’ll keep you up-to-date with any discounts in which you may be eligible. After all, they want to keep those customers who pay on time and have been with them around for the long run.

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