How to Estimate Car Insurance Before Buying a Car

Estimating a car’s insurance rates, which depend more on safety and functionality than age and color, can help you save money in the long run.
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Thinking of buying a new or used car? The price you’ll pay for car insurance is dependent on a number of factors including but not limited to:
Estimating how much insurance you need and how much you should pay for can be tricky as you’ll run the risk of either overpaying, or under-insuring. In order to get it right, here are some questions to ask yourself. In this article, Part 1 helps you determine the type of driver you are, Part 2 suggests ways to decide the kind of car you want, and Part 3 suggests discounts you can get.

Part 1 of 3: Determine the kind of driver you are

Determining your “driver profile” before calling an insurance agent can ensure you don’t get taken advantage of. Here’s what they’ll typically take into account to determine how much you pay:
  • Your age and gender
  • Your marital status
  • Your credit score
  • Your occupation
  • Where you live
  • Your driving record
Studies often show young men having a higher accident rate than young women, and many insurance companies will take into account crash data from the National Highway Traffic Safety Administration (NHTSA). This typically means a married middle-aged person with good credit and a steady job residing in a low-crime area would receive the lower rate compared to a single 21 year old student living in a city.
Some insurance companies will even factor in what you do with the car. For example, if it’s used primarily for business, say you’re a salesman, your rates can increase as you have a higher statistical probability of getting into an accident. On the flip side, your rates can drop if you simply don’t use your car that often.

Part 2 of 3: Decide what type of car you want to buy

Generally speaking, the older and safer the car, the cheaper the insurance. When factoring policy rates, car insurance companies will look at a car’s:
  • Make
  • Model
  • Year
  • Mileage
  • Safety rating
  • Likelihood of theft
Safety ratings are determined primarily by two agencies - NHTSA and the Insurance Institute for Highway Safety(IIHS). Theft rates are frequently compiled by the National Insurance Crime Bureau (NICB) and are then coupled with your location. More often than not, high theft rates can overcome high safety ratings, causing a seemingly inexpensive car - say a Honda Civic - to have higher than usual insurance rates.

Part 3 of 3: Figure out what car insurance discounts you’re eligible for

While this question may be best answered by a car insurance agent, the most common discounts available are:
  • Safe driver
  • Multi-car
  • Military
  • Homeowner
However, some lesser-known discounts may also be available which can include:
  • Good student
  • Green vehicle
  • Low mileage
  • Safe vehicle
  • AAA membership
  • Defensive driving course
Because there are so many discounts available between the major agencies, it’s important to call around for a rundown of discounts from more than one insurance provider. This will help you determine the least expensive way to get the best amount of coverage for your individual situation.
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