Bad Credit Auto Insurance – What Affects My Car Insurance Premiums?

June 21, 2017 · Posted in General 
auto insurance

Words most people never thought they’d see together – “bad credit auto insurance.” You probably already know that there are many factors that affect your car insurance premium. But I’ll bet you never realized that credit was one of them!

No insurance company wants to pay claims so they calculate the risk associated with a person, and that determines the premium you pay. And having bad credit is one factor among many that insurance companies use when factoring in your “risk potential.”

Below are the major risk factors that car insurance companies use when determining your rate.

Age

Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. They are also the ones with the least amount of credit history, and often have some bad credit. Using a bad credit auto insurance broker can probably save these people the most money over using one of the bigger companies. 25 is a major turning point (especially for men) in auto insurance. This is the age where most insurance companies consider you a “responsible adult” and you should see a drop in your rates.

Drivers between the ages of 50 and 65 generally have the safest records.

Gender

Women have been statistically safer drivers. This is because they are more likely to be transporting children, and therefore more careful. They are also less apt to be “daredevils” on the road. But the number of women involved accidents is on the rise as more and more women are commuting to work and not becoming the traditional “stay at home mom.”

Marital Status

A married person will pay less than a single person with an identical driving record. They believe that being married makes you a safer driver. I don’t’ know if this is true, but that’s what they believe . . .

The above factors cannot be changed, but there are some things that you do have control over that affect your rate. You may be able to save on insurance based upon these decisions:

Credit Rating

Many insurance companies will charge a person with a poor credit history a higher premium. This is why using a bad credit auto loan broker is better than using one of the big insurance companies. Until your credit improves the big agencies will always ding you.

To improve your credit and get better insurance rates – monitor your credit report to see if you can get a better score. A better credit score will save on insurance premiums. You can legally challenge any outdated or inaccurate items on your credit report and have them removed, thus improving your credit score. For a modest monthly fee you can hire a credit attorney to help you and in a short time can clean up your credit.

Geography

Where you live makes a difference. Folks living in areas with little or no traffic can expect to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.

Accidents and DWI’s

Having a DWI, accident or reckless driving ticket (as opposed to a general speeding ticket) will put you at a higher risk for accidents and will probably mean a higher premium. Some insurance companies will penalize you for as many as five years from when the incident occurred. These things can affect your credit too. If you have a judgment or fine placed on you by the courts this is put on your credit report. Which can lower your score. If you’re paying off a fine or judgment and your insurance rates are high, try one of our bad credit auto loan brokers and see if you can at least lower your rate while you get the fine paid off.

Vehicle Type

A cheap car will cost less to insure than that status symbol SUV. This is because it will cost a lot less to repair or replace a cheaper car than an expensive one. A HUGE portion of your insurance premium is based on the replacement value of your vehicle. So think twice before buying a 2500 vs. a 1500 or even a full size SUV vs. a mid-size SUV.

Tickets

A clean driving record that is free of tickets proves to the insurance company that you are above the norm. Some insurance companies even offer rewards for having no tickets or accidents over a set period of time.

Occupation

Insurers rate your risk factor with your job. For instance, a sales person who drives the freeways every day is most likely a higher risk than the banker who sits at their desk all day.

Education

A higher education can get you lower premiums. Just being in college is often enough to get you a student discount, provided your grades are high enough.

Misc Factors
  1. Your driving distance to work
  2. Number of miles driven each year. Under 10 miles one-way will usually earn you a better rate
  3. Do you use your vehicle for business?
  4. Whether or not you currently have auto insurance and how high are your limits
  5. Theft protection devices like Lo-Jack (often results in discounts)
  6. Multiple cars and drivers (another opportunity for discounts)

If I Need Bad Credit Auto Insurance What Can I Do Right Now To Make Sure I Have The Lowest Premium?

Shop around for the best deal. Like any other kind of shopping when it comes to bad credit auto insurance it pays to check around. Typically a broker can find you the best rate because they take all of the above factors and match you with the best company. There are hundreds of insurance companies out there and you don’t have to limit yourself to just the big guys.

One stop can take care of it all. Check our site to see a list of bad credit auto insurance brokers that specialize in helping people who are credit challenged. You can receive multiple quotes, pick the best price, and then purchase. Get covered immediately on-line or over the phone. It REALLY is the easiest way to purchase car insurance.

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