Finding good car insurance at an affordable price is tricky, especially for people who have less than perfect driving histories. Often, consumers are told that they need to buy a cheap car in order to qualify for the best deals on car insurance. This is why its news to many people when they find out that cheaper cars can often cost more to insure than more expensive ones.
Every auto insurance company has its own method of determining risk, so it is impossible to know exactly how their rates are determined. In general, though, a company will use past statistics regarding car accidents to determine the overall likelihood that a customer will get into an accident.
For various reasons, people who drive cheaper cars and trucks tend to get into more accidents than people who drive more expensive ones. One of the possible reasons for this is that cheaper cars are usually owned by people who are younger, and therefore not as financially established. Younger drivers tend to be in more accidents.
Furthermore, cheaper cars are usually owned by single drivers without children. After having children, American drivers are more likely to invest in a more expensive car that has more safety features. These safety features can reduce the personal and property damage that occurs during an accident. Because of this, more expensive cars will typically be cheaper to cover after an accident than less expensive cars.
There is also a tendency among people who drive less expensive cars to immediately claim damage after a car accident. Drivers who own more expensive cars, however, will tend to only make a claim against their insurance for larger amounts of damage. A series of small claims can cost an insurance company much more to process than a single, larger claim. This increases the overhead costs of the insurance company and makes the drivers of cheaper cars much more expensive to insure.
Fortunately, the good news is that there are steps that drivers of cheaper cars can take to lower their insurance bills. Consider raising your deductible so that you are only claiming large accidents on your insurance. Many young people who have taken this step have reported that they have seen a ten percent reduction in their premiums by taking this step. Next, try to keep a clean driving record. Driving history will affect premium rates much more than what type of car you drive. Finally, if you need to drive a cheap car, pick a model that has high safety ratings. This will lower the insurance company’s risk to insure you.