While you probably know full well that you'll need car insurance — it's required by law in almost every state, after all — sometimes it's an afterthought.
Here's the thing, though: The cost of car insurance should be factored in when you're in the middle of car shopping, because the type of car you buy impacts your auto insurance premium.
Let's take a look at what to factor in when buying car insurance, and how to go about buying a policy.
10 factors that impact the cost of car insurance
According to the National Association of Insurance Commissioners (NAIC), the average national premium for auto insurance in 2018 was $1,189.64. This breaks down to $99.13 a month.
However, the cost can vary depending on everything from the make and year of your car to where you live, and your driving record. Here are some factors that can affect the cost of your policy:
The type of coverage you choose
Most states require that you carry liability insurance. Minimum liability requirements vary by state and will affect how much your premium is.
You can also opt for comprehensive car insurance coverage, which can help pay to cover the costs to repair or place a car that's been damaged or destroyed by something other than a collision. Think natural disasters such as a flood or fire, wind, theft, or vandalism.
You can also get collision car insurance coverage, which can pay for damages to your car should you get into a collision with another car. If you finance or lease vehicle, your lender may require collision and comprehensive car insurance.
Finally, there's full car insurance coverage, which is a combination of liability, collision, and comprehensive coverage and provides the most protection.
| Damage | Comprehensive | Collision | Liability* | Full |
| Theft | Yes | No | No | Yes |
| Vandalism | Yes | No | No | Yes |
| Fire | Yes | No | No | Yes |
| Natural disaster | Yes | No | No | Yes |
| Falling objects (tree) | Yes | No | No | Yes |
| Animal damage | Yes | No | No | Yes |
| Collision/accident | No | Yes | No | Yes |
| Rollover | No | Yes | No | Yes |
| Bodily injury/medical bills | No | No | Yes | Yes |
| Physical damage | No | No | Yes | Yes |
| Property damage | No | No | Yes | Yes |
| Uninsured motorist | No | No | Yes | Yes |
*Most states require some type of liability coverage
Your deductible
Your car insurance deductible is the amount you'll pay out of pocket on a claim before your insurance coverage kicks in to cover the rest. The higher the deductible, the lower your premium tends to be. On the flip side, the lower your deductible, the higher your premium.
Your location
If you live in an urban area, your rate will generally be higher than if you lived in a rural area or suburb. That's because densely populated metro areas tend to have higher rates of theft and vandalism.
Your driving record
If you have a clean record, your insurance policy will typically be lower. But if you have a driving history with accidents and traffic violations, expect to pay more.
How often you drive
The fewer miles you put on your car, the less your insurance premium can be.
Your age, gender, and marital status
While your race and religion never factor into the cost of your deductible, your gender, age and marital status can.
According to the NAIC, single folks, drivers under 25, families with young drivers in the household, and males tend to have more accidents. In turn, they usually pay higher premiums. Folks over 65 also tend to have more accidents and pay more for car insurance.
Your credit-based insurance score
Just as your credit score can impact what sort of auto loan you qualify for, your credit-based insurance score can bump your insurance premium up or down. Unlike a credit score, which is used by lenders to determine how likely you are to default on a loan, a credit-based insurance score is used to determine how likely you are to have an insurance loss (and therefore need to file a claim).
Discounts offered by the carrier
Many carriers offer a discount if you sign up for auto pay or pay six months ahead of time versus monthly, or if you are part of a group or organization and get your insurance through them.
You might also scoop up a discount if you have a clean driving record, or if you bundle different types of insurance (like homeowners insurance or life insurance) with the same carrier.
Type of car
The year, type, make, and model of your car can play a large role in how much your insurance is. Whether it's new or used can also play a huge part. Also, safety features on your car can affect your premium.
If you've filed auto claims in the past
If you have a history of filing claims, it could bump up the cost of your premium.
Compare quotes to estimate the cost of car insurance
When shopping around for auto insurance, start by figuring out what type of coverage you need and what makes sense for you and your situation.
You'll also want to compare quotes side by side. So aim to get a few quotes for the same type of coverage so you can compare apples to apples.
The good news is that when you ask for a quote from an insurance company, it will only do a soft pull of your credit. This means that your credit score won't be negatively impacted.
When you get a quote from an auto insurance carrier, you generally need to provide the following information:
- Your personal information (i.e., legal name, address, date of birth, occupation)
- Driver's license
- Driving record
- Type of car, expected annual mileage
- Coverage type and amount
Be sure to read the fine print, and know what limits and restrictions apply to a given policy.
Check rates regularly to save money
The beauty of auto insurance is that you're not locked into a policy for an indefinite amount of time. When it's time to renew your policy — usually after six months or a year — you have the freedom to go with another company.
It's best to compare rates well before your policy period is up. That way, you'll have plenty of time to do your research and make a decision.
By doing the research and getting estimates of car insurance before you purchase a new car, it can help you gauge what the total costs of your new ride might be.