Five things that will give you expensive car insurance
Nobody wants expensive car insurance! But with a little bit of insider knowledge, you can get top notch insurance without having to fork over a fortune. Here are five factors that affect how much you’ll pay for your premium.
1. Your credit score
There’s a proven correlation between someone’s credit score and how likely they are to make a claim. Things like credit defaults and repossession have a big effect on your credit score, so check it out and make sure yours is good.
“Insurers use your score, among other elements, to decide what your car insurance premiums will be,” says Credit Simple CEO David Scognamiglio. “A credit score around 700 or above will see you get cheaper premiums, but a score around 500 or less means you’ll pay more – or insurers may actually refuse you outright.”
Click here to check your credit score.
2. The type of car you drive
Insurers want to know how likely your car is to be in an accident, and if it is, what will it cost to repair it. Compare a Suzuki Swift or a Toyota Corolla with a Holden Commodore or a Subaru WRX. It’s not so much about the initial cost of the car itself, but more about power: fast, grunty cars are more likely to be involved in an accident.
And watch out for spendy modifications. If you add an expensive sound system, tints or mags it means your car is more likely to be stolen or have a crash – and insurers will charge you more for your premiums.
3. Where you live
Simply put, thieves go where the vehicles are. And in cities there are more victims to prey on than in rural areas. Aucklanders pay more for insurance compared to, say, Twizel residents, due to the density of vehicles on the road – which also means you’re more likely to have an accident. And if crime rates in your location are high, your insurance costs will be too.
4. Your driving record
If your driving record shows a number of crashes where you were at fault, be prepared to shell out more for insurance. If you’re really a road danger, some insurance companies may refuse to cover you at all.
On the bright side, if you’ve got a clean record, this all works in your favour. Make sure you’re getting the best possible deal from your insurance company, if you’ve got a squeaky clean driving record.
Want to know if you’re actually a safe driver or just think you are? Tower has an app called SmartDriver that tracks how you drive (i.e. acceleration and braking) through your smartphone, and tells you how you rate. And if you’re a safe driver, you may also be able to get discounts through Tower.
5. Making insurance claims
Insurance companies want to know whether or not you’re a good customer prospect for them. If you make claims, you’ll lose your no-claims bonus. Again, on the bright side, after a few years accident-free you can grab that bonus back. Use this as a bargaining chip with your car insurance provider.
Pro tip: ensure you have automatic windscreen and glass coverage, so a chip or a shattered window won’t set you back in your no-claims track.
Above all, shop around – and shop with your mouse – and ask for discounts to reward loyalty, a good credit score, or a clean record. Check out the Citizens’ Advice Bureau page for more on car insurance.
Credit Simple gives all Kiwis free access to their credit score, as well as their detailed credit report. See how your credit score compares by age, gender and community and gain valuable insights into what it all means.All stories by: Credit Simple