Let’s recap what we have learned from part one. Your insurance policy is based strongly on two things, the value of the vehicle as well as your states insurance policy requirements. We also distinguished the difference between your monthly premium and your deductible. We found that if your trying to save costs in the short term you might want to go with a lower monthly premium as long as you have enough savings to pay more out of pocket in case of an unexpected accident. On the flipside if you can afford it and your chances of an accident are increased due to multiple drivers on your account than you might want to go with a higher monthly premium and a lower deductible because in case of an accident you will pay much lower out of pocket. Now let’s continue learning what other factors to consider before purchasing insurance.
As we mentioned before different states have different requirements for car insurance policies. For instance, in New Hampshire, you’re only required have car insurance if you’ve been convicted of certain violations such as DWI or leaving the scene of an accident. This results in substantial price difference when compared to California which requires drivers to carry minimum liability insurance of $15,000 for injury or death to one person and $5,000 for property damage. Another factor to consider is if you’re living in a city or rural environment. City vehicles are usually subject to more break-ins, theft, and fender benders which is more expensive to insure than ones in rural areas.
According to Insure.com, late-model Mercedes, BMW, and Audi are the most expensive cars to insure because they cost more to repair them. If you are looking for cars that won’t require you to purchase more expensive insurance than consider Jeep SUVS, Honda SUVS or minivans, or other compact SUV or minivans.
Another factor to consider is the age of the vehicle. For instance a late-model vehicle compared to a 10 year old vehicle is going to cost less to insure because generally the parts to repair the vehicle are going to be cheaper. If you want your monthly premium to cost less than $100 a month you might want to consider buying a 5-10 years old used car in good condition that happens to be an SUV or minivan.
Knowing what types of insurances are included in your policy could lead you to substantial savings, here is a breakdown: