5 Factors That Influence Your Car Insurance Rates

Customer consulting an insurance broker about getting the appropriate car insurance

23 Oct 5 Factors That Influence Your Car Insurance Rates

The amount you pay for your car insurance is largely dependent on the type of car you drive, how you drive it and the insurance cover you choose. But there are a few other factors that can also impact the cost of your car insurance premiums. While every insurer calculates car insurance differently, these are the 5 most common factors that can influence your car insurance rates.

1. Type of vehicle

When it comes to car insurance, the type of car you drive plays an important part in how much insurance you’ll pay. If you’re looking to maximise your insurance cover without blowing your budget, here are some things to consider:

Small vs. large cars

While most people assume a smaller car means lower insurance premiums, however, that’s not always the case. Smaller, sportier cars driven faster may be seen as a higher risk and hence can attract a higher premium.

Bigger engines

Larger cars may be safer in an accident, but a bigger engine size could mean a higher insurance premium. More horsepower generally equates to a faster speed being driven and a greater risk of an accident.

High-end vs. mid-range

As a general rule, more expensive cars cost more to insure because of the increased cost of repairs or replacement when things go wrong.

New vs. old

Older models, collector’s item vehicles, or those vehicles that are more attractive to thieves may attract higher insurance premiums.

Safety rating

Your car’s safety rating tells you how well your car will perform in an accident. Things like airbags, automatic seat belts, and traction control impact a car’s safety rating. The higher the rating, the safer you are on the road which will influence how much you pay for insurance.

Make and model

How old your car is and how much it costs to replace versus repair can impact your insurance rates. Older cars tend to cost more to repair and may be written off if it is unsafe or uneconomical to repair, while newer cars cost more to replace.

2. Your location

Where you live and park your car can impact the cost of your insurance. This is because certain areas are more densely populated with more cars on the road or they may be prone to more theft and break-ins. Typically, urban areas where theft and accidents are more likely to occur attract higher premiums, while those living outside of the major cities and in rural areas generally pay less for insurance.

Before you buy a new car, it’s a good idea to review your insurance options with an Insurance Adviser like those at Max Insurances. By reviewing insurance cover for different types of vehicles, you’ll have a much clearer idea of what you’ll be paying and it may help you decide the type of car you want to buy.

3. Your driving history

How you drive is just as important as what you drive. If you’ve been in accidents, received speeding tickets or driving infringements, or you’ve made previous car insurance claims, your insurance premiums may be higher.

Similarly, how long you’ve been driving can impact the cost of your car insurance. Drivers of different ages are charged different amounts dependent on the number of years they’ve been driving and the type of licence they’re driving on. Drivers under 25 years’ old usually pay a higher premium compared to older drivers, and may also have to pay additional excess in the event of a claim.

4. Your driving activity

How often you drive and how long you drive can also impact your car insurance – it makes sense that if you drive long distances, your car is on the road more often and for longer periods which increases the chance of an accident. If you only drive occasionally and much shorter distances, you’ll pay less.

5. Type of insurance cover

Choosing the type of insurance cover you need will impact how much you’ll pay. There are three levels to choose from, with Comprehensive Car Insurance covering you for most events – whether your car gets stolen, needs a new windscreen, towing if it breaks down, or repairs or replacement in an accident. As part of your Comprehensive Car Insurance, you’re also covered up to a certain amount for damage to any other vehicles involved in an accident that you’re liable for.

Third Party, Fire and Theft covers your car for fire and theft and covers any other cars involved in an accident that you caused, while Third Party Car Insurance is the most basic option, ideal if you’re on a tight budget and just need cover for damage to other vehicles in an accident you’re liable for.

Insurance policies will differ between insurers, so it’s important you carefully review the terms of agreement for each type of policy before deciding on the right insurance cover.

Get the best car insurance

Not insuring your car can mean a large expense when things go wrong, and even leave you financially unable to get back on the road again. Get competitive car insurance rates by working with a NZ Insurance Adviser like those at Max Insurances. We have access to a wide variety of insurance providers and can use our industry knowledge of insurance products in NZ to make it easy for you to compare insurance options and make an informed decision about the right insurance cover for you.

Talk to our team today about your car insurance needs. Or simply fill out our online quote form and we will be more than happy to provide you with a free, no-obligation car insurance quote.

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