Most Buyers Don't Know Car Insurance Cost
One of the key expenses every driver faces is the cost of their car insurance cost, and yet more than half the buyer's who took part in a new study for BuyingAdvice.com reported that they did not check the impact on their insurance bill before requesting an online price quote for a new car.
Fifty-six percent of respondents to an online poll said that they did not know the car insurance cost of the car they were thinking of purchasing. However, 39 percent of participants said that insurance cost was "very" important in their buying decision while a further 34 percent rated it as "somewhat" important. All the buyers who participated stated that they were within 30 days of making a new vehicle purchase.
"We want people to realize that insurance can have a big influence on how much they pay to operate their car over the long haul, and that the type of vehicle they buy makes a difference when it comes to the cost of insurance," said Robin Harbage, product development manager of Progressive Insurance.
When determining rates, insurers generally consider factors such as the vehicle's make, model, year, weight, horsepower and body type. They analyze how often specific types of cars are involved in accidents or are stolen and how much they've paid out in claims for various makes and models.
The National Highway Safety Administration publishes statistics on car repair cost and the National Insurance Crime Bureau produces an annual list of the most stolen cars, but the best way to compare costs for the individual driver is to get sample quotes.
Leah Knapp of Progressive Insurance said, "Savvy consumers interested in comparing the total cost of ownership among vehicles can and do contact us for sample quotes before deciding which vehicle to purchase."
Harbage added that even if budget-conscious consumers are unwilling to consider buying a car that's generally less expensive to insure, they can still save money on their insurance by shopping around. Different insurers consider different factors when setting rates, so the cost to insure a given vehicle can vary by hundreds of dollars among companies.
A study by Progressive showed that the smallest spread of insurance cost between insurance companies was $481 every six months and the highest was $586. The Insurance Information Institute suggests getting at least three quotes before buying a policy.
The III also advises requesting quotes from different types of companies: insurance companies that sell through their own agents, independent agents, and companies that primarily deal direct over the phone or Internet. In our study, 59 percent of participants said that they did request multiple quotes when buying insurance; however, only 13 percent reported that they had bought insurance over the Internet.
The huge variety of discounts offered by insurance companies can make the whole process of comparing prices a lengthy process, but the savings can be worth it. One avenue to explore is having multiple cars on the same policy and another is buying your car and home insurance from the same source. Many offer lower rates for anti-theft devices, day-time running lights, anti-lock brakes and specific airbag configurations. It may even be enough to off-set or even cover the price of adding an optional feature to your new vehicle.
Other discounts are available from some insurers to those with a clean driving record, a low annual mileage and for those who have completed a defensive driving course.
Increasing the deductible on your policy will lower the cost as will reducing the coverage on older cars. As a rule of thumb, the III suggests that the premium should not be more than 10 percent of the value of your car.
More and more insurance companies are using credit checks to determine rates so maintaining a healthy credit record will also impact your premium in many cases. Also explore what group discounts you may qualify for though professional or social organizations.
Remember, if you currently do not carry comprehensive insurance and you are financing a new vehicle, you will likely be required to carry more coverage as a condition of your loan.
Thoroughly researching your insurance options before you buy a new vehicle can have a considerable impact on your overall cost of car ownership.
Published on Wednesday, September 5, 2007 - Email to a friend
Copyright 2008 BuyingAdvice.com, INC. All rights reserved. This material may not be published, rewritten, or redistributed.
Find New Cars
About Us | Email Us | Directory | Webmaster Resources | Site Map |
