If you are on the hunt for a car, then you are probably calculating costs and adding numbers to figure out which vehicle you can afford. But when it comes to owning a car, there are additional costs that you might not be considering right away, like monthly insurance premiums.
Many people do not factor in the cost of car insurance when purchasing a car. According to a report from Progressive Casualty Insurance Company, 40% of car buyers don’t think about car insurance costs when buying a vehicle.
“Not all cars are created equal.”
Whether you are purchasing new or used, insurance is something you can’t avoid. Depending on the vehicle you purchase, your insurance costs might be higher than others. There are many factors that play a role in setting the price of car insurance.
You don’t have to wait until after you purchase a vehicle to know what these factors are. When looking around for your next vehicle, consider the following tips to help keep your monthly insurance costs low:
Check safety ratings
Is the model you are looking at purchasing notorious for its poor safety ratings? This is a big red flag to insurance providers, who will certainly raise your monthly costs with the anticipation that something could go wrong. According to the U.S. Department of Motor Vehicles, checking safety ratings will help you get an accurate perspective on how much car insurance you will need.
Know the risks of different cars
Not all cars are insured the same and some are consistently insured at lower rates than others. For example, Bankrate noted that SUVs and pickup trucks cost less to insure on average, while sports cars and luxury automobiles cost more. While there are certainly exclusions to this rule, it is worth discussing this with your dealer.
Check the history of the specific vehicle
Being aware of the safety ratings for certain models and the general insurance rates for those models is helpful, but you can also check on the history of the specific car in the lot. Get an accident history and see if the car is prone to problems. Whether you do or do not, it is likely your insurance provider will, so you might as well get ahead of the game and know what you are in for.
Know about the safety features
Depending on the year of the car you are considering, there may be more modern safety features included. Many cars, especially newer models, have updated safety tools designed to assist the driver and keep the passengers safe. These can go a long way when weighed by the insurance company. Even though the car itself might be a bit more expensive than one that doesn’t have these features, it is worth balancing out what the cost will be after insurance payments are taken into account.
Get the right insurance
Once you’ve found the car you want, do your research on the type of insurance you’ll need. Insurance laws vary from state to state. For example, Florida only requires drivers to have $10,000 of property damage liability per accident and $10,000 of personal injury protection. Maine, on the other hand, requires $25,000 of property damage liability per accident and no personal injury protection. However, the state requires quite a bit more in terms of bodily injury liability per accident and per person, uninsured motorist coverage per person and per accident, as well as medical payments coverage.
Since you’ll mostly only be dealing with your insurance company during an emergency, it’s important to pick a company that treats their customers well. If you find a company with a lot of poor reviews or angry comments, take that as a hint to find another provider. If you find one company has great customer service, it would be worth your while to reach out for a quote.
In summary, don’t just look at the price tag when it comes to purchasing a car, but also think about how your insurance will come into play. Insurance costs can add quite a bit to your monthly payments, but if you prepare ahead of time and plan for them, you can make smart decisions that will keep them low. Talk to your dealer and check out some free quotes from insurance providers to make the best decision for both your safety and your bank account.