Factors that affect car insurance rates

Plan ahead to save on your premiums

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Most folks know your age, vehicle and driving history all influence how much you pay for auto insurance. Your state, marital status and where you park your car at night might also factor in. But those aren’t the only things that influence your costs.

“There are many more factors than ever before,” said Phil Minnes, an American Family Insurance agent in Norcross, Georgia. “Last I heard, there were 1,700-plus factors that affect each premium.”

While we don’t have time to cover all 1,700 variables, we can tackle some of the big ones. For example, how much can a single speeding ticket raise your rates? Why would a car that costs $121,000 be cheaper to insure than a $26,000 Toyota? And do men still pay more than women?

Key insights

  • Auto insurance providers calculate premiums by plugging hundreds to thousands of variables into a proprietary algorithm to answer one question: How likely are you to submit a claim?
  • Out of the many factors driving auto insurance premiums in 2023, your age, gender, marital status, vehicle make and model, coverage levels and state of residence are still some of the biggest players.
  • If one of your biggest personal risk factors is mitigated (e.g., you get married or you start parking in a garage), it’s best to let your provider know as soon as possible to see if it lowers your premiums.
  • You can save on auto insurance by getting quotes before you buy a car, taking advantage of every possible discount, raising your deductibles and getting new quotes every six to 12 months.

Which personal factors affect car insurance rates?

Generally speaking, auto insurance providers look at four main categories when calculating your premiums: you, your car, your coverage and your location.

Let’s start with the main personal factors:

  • Age: Your age plays a big role in your insurance premiums. According to Progressive, the average monthly car insurance premium peaks at $230 for those who are 18 years old. The average rate falls dramatically by the time drivers reach age 30 and keeps dropping until age 75. But rates can rise again in your golden years.

    “‘Experienced’ drivers in their 70s will see sharp increases annually,” Minnes said.

  • Gender: QuoteWizard reports that 18-year-old men pay roughly 25% more for car insurance than women with otherwise identical profiles. That changes later in life, though — a 2022 study by the Consumer Federation of America (CFA) showed that by age 35, women in Delaware pay an average of about 8% more for car insurance than men. The good news is that seven states have banned gender-based auto insurance pricing.
  • Marital status: Married people tend to pay less on average for auto insurance, and the discrepancy might be higher than you’d expect. A 2015 study by the CFA found that four of six major auto insurance providers increased rates for recently widowed women by an average of 20%. If you’re newly married, let your provider know for quick and easy savings.
  • Driving history: A single speeding ticket can raise your rates by 20%, according to Insurance.com. A high-risk offense (like driving under the influence) can send rates skyrocketing by up to 300%. Fortunately, though, most auto insurance providers only look at offenses from the past three to five years when calculating your rates.
  • Credit score: According to Allstate, “Many U.S. auto insurance companies use credit-based insurance scores to help determine risk when providing insurance quotes.” In other words, folks with good credit pay less for auto insurance. Why? “People with lower scores file more claims,” Minnes explained.

» SEE WHERE YOU STAND: How to check your credit score

Vehicle-related factors

Because your insurance provider could be financially liable for damage to your car — or damage your car causes — it’ll want to know every detail about your vehicle, down to the nuts and bolts.

Make and model

Your make and model will certainly have a big influence on how much you pay for auto insurance, but pricier cars aren’t always more expensive to insure. For many insurers, what matters is how often they receive claims for a specific type of vehicle.

To illustrate, an analysis by RateForce found that, on average, a Nissan GT-R, which has a starting manufacturer’s suggested retail price (MSRP) of about $121,000, was cheaper to insure than a Toyota Camry, which has a starting MSRP of about $26,000. On a similar note, one Ferrari owner reported paying $255,000 for his Italian stallion — but just $1,608 annually to insure it. Although claims on a Ferrari are presumably quite expensive, Ferrari owners may file claims so infrequently that their insurance rates remain surprisingly low.

That’s not to say you should swap your Mazda for a McLaren to save on insurance; rather, it suggests the relationship between your vehicle’s MSRP and how much you pay for auto insurance can be unpredictable. That’s why it’s best to get insurance quotes during the budgeting stage instead of after you buy the car.

Vehicle age

Broadly speaking, older vehicles are cheaper to insure because they’re worth significantly less than newer cars. That means they’re cheaper to replace in the event of a total loss.

That said, newer vehicles have better safety features, so the cost gap between new and used may be small for some insurers.

» MORE: How to buy a used car

Safety features

Auto insurance providers love any kind of tech that can either prevent an accident or reduce the likelihood of fatalities or injuries. That’s why they ask if you have an anti-lock braking system, blind spot detection and more when you’re getting quotes online.

There’s no hard-and-fast rule about how much your safety equipment will reduce your premiums, but it’s safe to say that a well-equipped modern sedan will be cheaper to insure than a spartan, old-school muscle car.

Likelihood of theft

If your vehicle is stolen and you have comprehensive insurance, most providers will just declare it a total loss and pay you the actual cash value of your car minus your deductible. Even if your stolen car is later recovered (roughly half of stolen vehicles are, according to Statista), it’s now your provider’s property and a hassle to repair and sell.

As a result, insurance providers tend to charge higher premiums for vehicles that are easy to steal, stolen frequently or parked in high-crime areas.

Example: Once the “Kia Boys” revealed how easy it was to steal select Hyundai and Kia vehicles — and theft rates tripled in certain areas — the cost of insuring those vehicles rose in tandem.

» MORE: How much is car insurance?

Coverage-related factors

It probably goes without saying that the types of insurance you purchase and the limits you choose have a direct and measurable impact on your premiums. Here are some of the biggest factors to consider:

  • Liability versus full coverage: According to our calculations, the average cost of a liability-only policy in 2023 is roughly $720 per year, and the average cost of full coverage is around $2,100 per year. That means the cost of your auto insurance can triple if you want or need full coverage. Most auto loan or lease agreements require you to carry full coverage for the duration of the contract term.
  • Discounts: You can always chisel away at those premiums by taking advantage of as many provider discounts as possible. Some providers will lower premiums by up to 30% if you participate in their driver-monitoring programs and drive like your driving instructor is watching.
  • Limits and deductibles: You can also lower your premiums by lowering your coverage limits and raising your deductibles. For example, if you now have enough savings to cover an emergency repair, it’s probably safe to raise your comprehensive deductible from $250 to $500.
  • Payment history and autopay: Insurance providers tend to reward policyholders who pay on time, every time. “Full pay, autopay and bank draft payments can mean large discounts,” Minnes noted.

» COMPARE: Comprehensive vs. collision insurance

Location-based factors

Where your car spends most of its time can have a massive influence on how likely you are to submit an insurance claim. For example, someone who parks their car in a private garage in Boise will have a totally different (and smaller) set of risk factors than someone who street-parks in Brooklyn.

Some of the biggest variables affecting your premiums have to do with crime rates, parking and weather.

  • State: Your state’s laws, demographics and rate of uninsured drivers can play a huge role in how much you’ll pay for auto insurance. Take Florida, for example. Despite having some of the lowest minimum insurance requirements in the country, Florida has among the most expensive auto insurance rates due to inclement weather and the fact that about one in five motorists are uninsured.
  • Local crime rate: Providers tend to assume that if you live in an area with high crime, your car has a higher likelihood of being stolen or vandalized. As a result, drivers in high-crime areas pay more for auto insurance. Detroit, for instance, regularly ranks as one of the most violent cities in the country; it’s also one of the most expensive places to insure a vehicle.
  • Rural versus urban areas: Population density can play a major role in how auto insurance premiums are calculated. Drivers in high-density areas tend to experience more theft and accidents than folks who commute on empty country roads, so insurance providers tend to charge city dwellers more to make up for the increased risk. If you’ve recently moved from the heart of midtown to a quiet suburb, be sure to let your insurance provider know.
  • Parking situation: In a similar vein, cars parked in garages at night are better protected against theft, vandalism and bad weather than those parked outside. As a result, auto insurance providers tend to charge less for comprehensive insurance for cars in protected parking areas.
  • Local weather: Since locations with inclement weather (like blizzards and hurricanes) tend to have higher rates of accidents and/or total losses, providers charge more for auto insurance in these areas. If you live in an area with severe weather but park your vehicle indoors, you might be able to get lower premiums.

5 ways to lower your auto insurance rates

Now that you have a better idea of which factors impact your auto insurance the most, what can you do to improve your chances of getting lower premiums?

Try the following:

1. Update your driver profile
Are you recently married? Have you moved into an apartment with a covered garage? Let your provider know. Showing that you’ve mitigated some of the biggest risk factors mentioned above may result in lower premiums.
2. Reassess your insurance needs
Raising your deductibles and lowering your limits are two of the fastest ways to save on auto insurance. If you’re comfortable paying $500 or $1,000 out of pocket for a repair, you can raise your deductible now to start saving on insurance over time.
3. Hunt for discounts
While you’re on the phone with a rep from your provider, simply ask them to help you find discounts. Some of the best discounts (like Allstate’s Drivewise) may require some work, but they’re worth it in the end.

» SAVE BIG: How to get cheap car insurance

4. Shop around
In our experience, getting five quotes every six months is best. Out of five, you’ll often find that one is comically high and one is shockingly cheap. And if you don’t want to switch from your current provider, simply bring in the competing offer and ask for a discount.
5. Get a quote before you buy your next car
Two vehicles with identical MSRPs can command wildly different insurance premiums, sometimes by $1,000 or more per year. That’s why it’s best to factor insurance into your budget before you buy a car, not after.

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. Progressive, “ What age does car insurance go down? ” Accessed June 22, 2023.
  2. QuoteWizard, “ Car Insurance Costs for Men vs. Women .” Accessed June 22, 2023.
  3. Consumer Federation of America, “ Gender Disparities in Auto Insurance Pricing in the State of Delaware March 2022 .” Accessed June 22, 2023.
  4. Consumer Federation of America, “ New Research Shows That Most Major Auto Insurers Vary Prices Considerably Depending on Marital Status .” Accessed June 22, 2023.
  5. Insurance.com, “ Surprising ways your driving record can negatively affect your life .” Accessed June 22, 2023.
  6. Allstate, “ Does your credit score affect your car insurance rate? ” Accessed June 22, 2023.
  7. RateForce, “ How does your Car make and Model Impact Auto Insurance Rates? ” Accessed June 22, 2023.
  8. MotorBiscuit, “ How Much Does It Cost to Insure a Supercar? ” Accessed June 22, 2023.
  9. NBCUniversal Media, “ Insurance Companies Say Some Kia and Hyundai Cars Are Too Expensive to Insure .” Accessed June 22, 2023.
  10. Insurance Information Institute, “ Facts + Statistics: Uninsured motorists .” Accessed June 22, 2023.
  11. The Detroit News, “ Detroit remains among nation's most violent big cities, FBI statistics show .” Accessed June 22, 2023.
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