Factors that affect the rates of cheap car insurance

The rates of auto insurance completely depend on the kind of vehicle which is supposed to be insured. Vehicles are classified in the terms of cost and size determining the rates of insurance. The vehicles which are larger in size and are sportier have high insurance rates in comparison with the smaller and the ones which are less expensive. For instance, repairing a bumper of a Ferrari might cost $7500 where as repairing a bumper of Toyota Prius might cost $500. There are several factors which affect the cheap car insurance rates.

The first factor which affects the rates is the type of the car. The cars which are luxury have high rates in comparison with smaller ones and the ones that are less costly. Moreover, it would cost more to the insurance company to pay for the theft of a luxury expensive car compared to a car which is less costly. If the car is less expensive then the rates will be lower for sure. Thus it is obvious that the cheap car insurance is directly dependent on the cost of the vehicle.

The second factor which affects the rate is the driver’s driving history. The insurance companies will only give you low rates if you have a clean driving record which contains no speed driving, no breaking of signals, any accidents and etc. If your track record is clean then you will surely get cheaper rates. Companies tend to expect fewer accidents in the future and aim for more profits. But if your driving record has been bad and you have been involved in dangerous driving and law breaking and accidents, then the companies will surely hesitate to offer you cheaper rates. So it is better to get training from a better driving school in order to get cheap car insurance.

The third factor which affects the rates is the credit rating of the driver. Many insurance policies will tend to inspect your credit rating as it is a part of the application process. If you have a good credit rating, then insurance companies will build trust in you and will certainly give you cheaper rates. The insurance companies are not directly influenced by the credit limit of the customer as the insurance policy gets cancelled immediately if you don’t pay for it. The fourth factor is the address of your house, that where do you live. This factor also determines the rate of the insurance. There are some cities and states where the traffic rate is high, there is high crime rate there, number of accidents taking place per year is also big, and so these factors can lead to a higher rate of insurance. But if you live in an area which is safe and sound and which has hardly any crime rate, then you can easily get cheap car insurance (in Denmark it’s called billig bilforsikring). Taking quotes from different companies can also get you cheaper rates if you do it properly.

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