6 things that affect car insurance costs – and what you can do about them!

A wide variety of factors are taken into account when an insurance company assesses the risk you pose to them – and any one of these could have an impact on the cost of your policy.

Here are six things that could affect your car insurance costs, and what you can do about them!

1. Your vehicle
Some cars are regarded as riskier to insure than others. Insurers view vehicles that have powerful engines as more likely to be involved in accidents.

Likewise, soft top cars are seen as easier to break in to, so they’re usually more expensive to insure. If you’re choosing a new car, it’s worth taking these things into account.

Alternatively, if you’re tempted to modify your existing vehicle, you may want to think twice. Most insurance companies charge higher premiums for modified vehicles, no matter how minimal the changes you make to your car.

2. Your location
Where you live will affect how much your car insurance costs, because local crime and accident statistics will be used when your insurer calculates the risk you’ll make a claim.

Of course, moving house to reduce your insurance premiums is not an option!

You can, however, take other precautions that might help lower the cost of your insurance, regardless of your postcode.

Parking your car on a drive or in a garage will help, as will fitting a security device such as an immobiliser or car alarm to your vehicle. If you’re able to do these things, make sure your insurer knows so it can be taken into account when the price of your policy is determined.

3. Your age
As any driver under 25 or over 65 will testify, your age can have a serious impact on how much your car insurance costs.

Insurers use data on other customers of your age to predict how you will behave, and claim their statistics show people within certain age groups are more likely to make claims.

However, the government recently published the Equality Bill which is due to come into law in 2010. This may make it more difficult for insurance companies to price customers’ premiums in line with how old they are.

In the meantime, older drivers might want to investigate whether a specialist insurer could offer them a better deal. Companies such as Saga specifically target customers who are 50 or over.

4. Your profession
Believe it or not, your job title can affect how much you pay for your car insurance. Some professions are regarded as riskier than others based on insurers’ past data.

You could try tweaking your job title when comparing insurance policies to see whether it affects the price you’re quoted. For example, a ‘writer’ might find a slightly cheaper car insurance deal than a ‘journalist’.

However, you should only ever use a job title that reasonably describes what you actually do. Telling an insurer you have a certain job when you don’t is fraud.

5. How you drive
Driving carefully should be a top priority if you’re looking to keep your car insurance costs down.

If you’re involved in an accident, caught speeding or fined for using a mobile at the wheel, you are likely to see the price of your next premium increase (and might lose your no-claims bonus).

6. Which company you choose
Finally, remember: sticking with the same insurer year after year means you probably won’t be offered its cheapest deals.

These tend to be reserved for new customers, so loyalty to one company may mean you lose out.

Comparing insurance deals from a variety of providers is the best way to ensure you get value for money when you buy car insurance. Good luck with slashing those costs!

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**