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Two Factors Affecting Your Car Insurance Rates

Finding a personal car loan can help you get the car of your dreams, but you will always have to consider finding the right car insurance to drive legally. Understand that so many factors can have a huge impact on the total cost of car insurance and knowing what these factors are will help you know what to expect when you’re out looking for your first insurance product.

Men are Likely to Pay More

If you’re a man looking for your very first car insurance deal, be prepared to spend more. Studies have confirmed that young men are likely to pay more for car insurance compared to young women with the same circumstances. While the gender rate gap becomes less noticeable when you reach your mid-30s, you need to worry about it when you’re a young driver.

Car insurance prices fluctuate depending on the risk you present. These are determined by accident and driving offenses statistics. Statistically, young men are proven to be involved in risky driving behaviors and the driver at fault in motor accidents. Insurance companies put every man under the same umbrella even when you stick to safe driving practices.

The truth is that as a young male driver, statistics work against you. It is found that men are more likely to be involved in fatal collisions, especially those speed-related. Also, more men than women are involved in DUI-related collisions. Many car insurance companies have found that men are more interested in going for faster riskier cars as compared to women who go for the smaller engine sizes. Women, therefore are more likely to find insurance products with lower premiums.

Your Credit Score Matters

Again, it all comes down to how much of a risk your insurance company sees you and someone with a low credit score is more likely to miss payments than someone with high credit rating. It is also worth noting here, that your credit-based insurance score is different from your regular credit score but the two stays loosely correlated since they rely on your overall credit report.

You will notice a considerable drop in premiums when you take steps to move up by only a single credit tier. However, it is impossible for the youngest drivers to demonstrate a solid credit history and that is why they end up paying more. But, you can work on improving your credit scores by paying off credit cards and building new lines of credit or simply paying your bills on time. It not only helps you get better insurance rates each year but also improves your chances of securing a car loan at affordable rates.

In short, if you are a male under 25 expect to pay more to run the car of your dreams. Even if you could lay down hard cash to buy it, you’ll have a sizable bill for your insurance. But, if you play the long game, start with a smaller more economical car to build your no claims bonus, and pay your bills and credit cards on time. The risk you present to the insurance companies will begin to diminish right away and so will your next year’s premium. Use your savings for a deposit on your dream car as your reward when you can afford to enjoy it in a few years time.

Written by Nat Sauteed

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