When you're checking your budget to see what kind of car you can afford, you have to look beyond the sticker price and monthly payments. Owning a car also means ensuring it. Since the cost of insurance premiums can vary widely, it's worth your time to learn about possible discounts and do some comparison shopping. Here are the basics to help you get the best deal on your car insurance:
Get a Quote
If you're new to this process, you should know that it's totally normal to contact different companies and ask them for car insurance quotes. You'll give them a little bit of information about yourself and the type of car you have (or plan to buy), and then ask them what their rates would be for varying levels of coverage. Asking for a quote does not obligate you to use that particular company, and it helps you to be an informed shopper. Be sure to ask for special discount programs from each company that you contact.
Factors That Affect How Much You'll Pay for Car Insurance
- Deductible: This is how much you pay out of pocket for an accident before your insurance coverage applies. Higher deductibles mean lower premiums.
- Age: Insurance companies charge more to ensure younger drivers. If you're under 25 and your parents live in the U.S., you may be able to save money by adding yourself and your car to your parents' insurance policy.
- Mileage: Do you drive your car to school every day? Is it a long trip? The less you drive, the lower your insurance rates will be. You may be able to save money by living less than three miles from school, or by leaving the car at home and using public transportation to commute.
- Driving Record: Being a safe driver saves money as well as lives. You'll pay less if your driving record doesn't include at-fault accidents or moving violations.
- Grades: Good-student discounts are standard for almost all car insurers. People who are responsible with schoolwork also tend to be responsible on the road.
- Driver Education: Most insurers offer a discount for successful completion of driver training. Some insurance companies even sponsor their own branded courses on how to be a safe driver.
- Credit History: Many college students don't have much credit history yet, but if you have a track record of on-time loan payments in your name, your insurance premiums may be lower.
- Bundling Coverage: You may already have insurance coverage for your computer, or you may carry renter's insurance. Insurers will lower your rates if you use one company for all your insurance needs.
- Car Value: If your car is relatively new, it will cost more to insure. Performance-type sports cars also bring higher premiums, because their drivers are statistically more likely to get into accidents. On the other hand, if you drive a very inexpensive car, you may save money by not carrying any comprehensive or collision coverage at all.
Understanding the Types of Coverage
Your state requires a certain amount of liability insurance. This covers other people's expenses if you are in an accident that is your fault. Uninsured motorist coverage pays for your expenses in an accident caused by someone else who does not have auto insurance. Collision coverage pays for damage to your car in an accident, while comprehensive coverage applies to theft, vandalism or other non-driving damage. Some states also offer personal injury protection, which covers you and your passengers regardless of who was at fault in an accident.
Planning to buy a car is an exciting project, and Boro would like to partner with you in finding the ideal vehicle. Contact us to learn more about our special auto loan program for college students.