How to Estimate Car Insurance Costs Before Buying a Car

Takeaways

• Before estimating costs, narrow down your top vehicle choice and decide how much coverage you'll need.

• Get quotes from several insurers to see rate estimates, or use an online car insurance comparison tool.

• Your age, driving record, location and the car you drive all factor into your car insurance estimate.

Even the savviest car shoppers can forget to estimate car insurance costs before buying. Depending on the vehicle and insurance company, the cost of car insurance can vary by hundreds of dollars a year for the same driver.

How to estimate car insurance costs

Follow these steps for an accurate auto insurance estimate:

1. Narrow down your top choices for vehicles. Learn how to pick the right car for you.

2. Decide how much coverage you need. If you’re buying a new car, include collision and comprehensive, which cover damage or loss of the vehicle. If you get a car loan for a used car, you’ll need this coverage because the lender will require it. If you’re unsure, some insurers’ websites feature car insurance calculators to help you determine your coverage needs.

3. Get quotes for the same amount of coverage for the vehicles you’re thinking about buying. 

Factors that affect the cost of car insurance

Your car make and model aren’t the only factors that go into an auto insurance quote. Others include:

• Personal characteristics like age, gender and marital status. For example, teen drivers have higher car insurance quotes on average than any other age group.

• The coverage you choose. The more coverage you have, the higher your insurance rates are likely to be.

• Your driving record. A recent DUI, speeding ticket or at-fault accident can raise your rates.

• Your location. Every state has different car insurance minimums, and factors like your neighborhood's crime rate and population density will affect your insurance price.

• Your credit score. Drivers with poor credit typically have higher car insurance rates. Insurers use a credit-based insurance score, which is different from your regular credit score, to determine the likelihood you’ll file a claim. A credit-based insurance score is determined by factors like payment history and outstanding debt, but not personal information like income or occupation. California, Hawaii and Massachusetts have banned insurers from using credit scores when calculating car insurance rates.

• Your car insurance history. This can include whether your car insurance has lapsed, insurance claims, how long you’ve been with your insurer and your last insurance company.

How much car insurance you need

Most states require a minimum amount of car insurance, but you’ll likely want to have more than minimum coverage. Some drivers opt to get full coverage to help protect themselves against any type of accident. Remember, full coverage isn't a type of policy, but generally a combination of required and optional coverages. But full coverage doesn't include everything. Extras like roadside assistance and gap coverage may have to be added separately.

Full coverage car insurance may include:

Coverage type	What it pays for
Bodily injury liability	Medical costs due to injuries or deaths from an accident you caused.
Property damage liability	Repair costs for property you damaged in an accident.
Uninsured motorist bodily injury liability	Medical costs after an accident with an uninsured driver.
Uninsured motorist property damage coverage	Repair costs after an accident with an uninsured driver.
Collision coverage	Repair expenses from traffic-related accidents, regardless of who is at fault.
Comprehensive coverage	Repair costs from events outside your control — including weather events, hitting an animal while driving, theft and vandalism.

Why some cars cost more to insure

Certain cars cost more to insure than others because carriers use crash and theft statistics to help set rates for each model separately. So if the car you choose tends to be stolen or crashed more, chances are you’ll pay more for insurance. For example, the reason sports cars cost more to cover is because they’re more likely to be driven fast and crashed hard by their owners.

Here are some specific vehicle characteristics that affect auto insurance costs:

• Retail price. Generally, the pricier the car, the more expensive it will be to insure. If you buy comprehensive and collision coverage, the insurance company will be on the hook to pay out the car’s market value if the vehicle is stolen or wrecked beyond repair.

• Cost of parts. High-end models often use parts made from carbon fiber and other specialized materials that are expensive to repair. This drives up the cost of damage claims.

• Safety. Over time, cars that do a good job of protecting drivers and their passengers bring down insurance costs. Fewer injuries mean fewer claims for medical payments and personal injury protection.