What Factors Affect The Car Insurance Rates

Meta: Buying car insurance is not only essential but also compulsory in some countries. Discover some useful tips when choosing car insurance rates in your country.
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According to the civil law enacted by US Government, all car owners must have civil responsibility insurance. This is reasonable since you cannot prevent all of the dangerous or unfortunate events. These amounts are defined in the law, so all insurance companies will offer you contract with the same clauses and compensation money.

However, you have some options to extend the base contract and increase the payments as well as the coverage of your insurance in exchange for the growth in car insurance rates. For example, you can increase money paid for each person and the car. You can also buy insurance that will pay for your damaged or stolen components. To get the best deal with an acceptable insurance rate, these are aspects you should take a look at.

Some Factors Affecting Your Car Insurance Rates

The actual insurance rates will be decided through individual negotiation, so they vary greatly depending on specific circumstances, and they are not publicly announced by insurance companies. Nevertheless, these are factors that heavily influence your final insurance rates:

Your Vehicle

Most insurance companies will not make a deal for cars whose values are less than $5000. The ideal situation happens when your car has less than 3 years of usage, and it preserves about 85% of the original value. You can expect to get a very low rate with this type of cars since the cars will likely to experience fewer problems in the future.

As you can already guess, the older the car and the less value it has, the more money you need to pay for its insurance. However, if the car has been insured for more than 3 years, the insurance rate decreases; the amounts of discount differ between companies.

Your Ages and Genders

Young and old people normally have to pay more money compared to a middle-aged person. However, the causes are not the same for the two groups. Young people tend to drive faster and more recklessly, therefore, accidents may occur more often. On the other hand, old people may get into troubles because of their health, and insurance companies will not overlook this factor.

In addition, men pay more money for car insurance on average than women. The reason is that insurers consider men as consuming more alcohols, and driving on long trips far more frequently. You can expect to pay a higher rate than your wife, sisters, or female friends.

Your Driving Records

If you can offer a good driving history to your insurer, the rate might go down significantly. People who strictly follow traffic laws, have never involved in accidents are guaranteed low insurance fee. In contrast, the insurance company will raise your rates if they know you got into several traffic troubles in the past.

Your Living Location

This factor seems trivial, but it actually creates a big difference during your negotiation. People living in crowded urban areas are more likely to get small collisions, so they may be put at a disadvantage when they want to buy insurance for car body and components.
Similarly, you will get higher insurance rates if you are living in a region with high crime rates because there is a larger possibility that your car may get damaged or robbery.

How to Lower Your Car Insurance Rates

After going through possible factors, you can have some preparations before finalizing your contract so that you do not have to pay unreasonable money for your car:

Carefully Choose Your Insurance Plan

As I mentioned above, there is a compulsory insurance with nearly fixed terms for all companies, and there are several options to extend that contract. These plug-in offers a lot of benefits such as getting insurance in some foreign countries, 24/7 car-rescue service, compensation for damaged parts twice a year, optional garages, etc.

These merits cost you more money, consequently. Each extension requires you to pay an addition of 10% to 50% of the original contract, so you need to consider your situation carefully and make a trade-off between capability and cost. For instance, if you usually go to neighbor countries like Cambodia or Laos, it will be better to buy the foreign insurance with a 50% increase, instead of buying an insurance contract in each country.

Take Care of Your Car

The condition of your car is important to determine the money you need to pay for its insurance. It’s not a problem if you buy a brand-new car, but you should be careful when you want a new contract for your old car, or you purchase a used car. Remember, the worse the car condition is, the more money you need to spend for the same amounts of compensation.

Purchase Your Insurance in Bulk

Most insurance companies offer contracts in groups where you can get the health insurance, car insurance, property and investment insurance, etc. with one purchase. If you want to own all of this assurance, purchasing them in bulk will reduce the cost significantly.

Use Online, Connected Service

Some companies encourage their customers to use their online service by cutting fee for people buy insurance through their websites and bank accounts. You can save some money if this is a feasible option.

Furthermore, some banks have their own insurance programs or joint ventures with insurance companies. If you have their bank accounts, you will get considerable discount, options, and convenience through integrating your car insurance with your bank (faster service, simpler paperwork, etc.)

Get High Grades on Your Driving License and Records

If you are an excellent driver who is always obey traffic law, you will enjoy an upper hand during negotiating process. If you involved in accidents in the past but it was not entirely your faults, you could explain the incidents in details to your insurers with evidence so that you can still get a good contract.


Car insurance is mandatory because of their usefulness in possible troubles or accidents, and you should spend efforts and time to get the best deal for yourself with the lowest fee. In my opinion, car insurance is not complicated like some people think, you just need to balance your requirements and budgets properly. You should not rely totally on your advisors or insurers since they cannot understand your situation as clearly as you.

I hope this article can help you when choosing optimal car insurance rates. Thank you for reading!

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