At least three are within your control
of ConsumerAffairsMay 19, 2025
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Auto insurance premiums are on the rise nationwide, prompting consumers to seek ways to cut costs.
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Driving record, vehicle type, location, and credit score are major factors in determining car insurance rates.
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Experts recommend focusing on controllable factorslike safe driving habits and vehicle choiceto lower premiums.
Amid a wave of price hikes affecting everything from groceries to gas, Americans are now facing yet another financial strainrising car insurance premiums. The April Consumer Price Index showed the cost of car insurance is up 6.4%, much higher than the overall inflation rate.
In an already strained economic climate, consumers are increasingly looking for strategies to ease the burden, and industry experts say it all starts with understanding how insurers set their rates.
Unlike other factors, your driving record is one that you have some control over, said Kevin Quinn, vice president of Auto Claims at Mercury Insurance. Drivers with a clean motor vehicle record and no at-fault accidents typically get the lowest car insurance rates.
While a spotless driving history is often rewarded with better premiums, theres more to the equation. Insurers use a variety of data points to assess risk and calculate rates. Among the top considerations:
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Driving Record: Traffic violations, at-fault accidents, and DUIs can stay on your record for years, directly inflating your premiums.
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Age: Teen drivers, who are statistically more accident-prone, face some of the highest premiums. Rates typically decrease with experience, reaching their lowest in mid-life before ticking upward again for older adults.
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Location: Where you live mattersa lot. Urban areas, which may have higher crime rates or more traffic congestion, often see elevated insurance costs.
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Vehicle Type: Flashy or high-performance cars, as well as certain electric vehicles, can be expensive to insure due to higher repair or replacement costs.
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Credit Score: In many states, a lower credit score can negatively impact your premium, as data links poor credit to more frequent or costly insurance claims.
What to do
Some states, including California, Hawaii, and Massachusetts, have moved to restrict or ban the use of credit scores in rate-setting, but it remains a common practice elsewhere.
Quinn emphasizes the importance of managing whats within your control. Choose an affordable vehicle with good safety ratings, Quinn said. Research average insurance rates in different ZIP codes before planning a move. And, most importantly, be attentive and follow the law when behind the wheel.
For those willing to take proactive steps, the potential for savings is significant. Being a safe driver, maintaining good credit, and selecting a vehicle with low repair costs and high safety ratings can collectively make a big difference.
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