Why is Car Insurance Expensive for Young or First-Time Buyers?

crashed car

Every driver must have car insurance if they wish to own and operate their vehicle. You will obtain financial security when you get comprehensive car insurance.

As for young and/or first-time buyers, their insurance will tend to be higher, as they will be seen as a higher risk. Here, we will focus on why car insurance is more expensive for first-time or young buyers, and provide tips that you can use to lower your premiums.

Does car insurance cost more for young or first-time buyers?

Younger drivers will tend to pay more for their car insurance because there is a much higher risk amongst younger drivers when compared to more mature drivers. Young drivers tend to have less driving experience, which elevates the risk that they will be involved in an accident.

Younger drivers are also more likely to be under the influence of alcohol, marijuana or other narcotics. They are also more likely to drive fast and recklessly.

In addition to being more likely to drive over the speed limit, they are also much more likely to text and drive, a distraction that can prove disastrous.

Why is it necessary to have car insurance?

Your leasing agent or lender may require you to purchase car insurance. Examples may include comprehensive coverage and collision coverage. If you are a young driver you are at an increased risk of being in an accident.

Car insurance can help protect you, pedestrians and other drivers, as well as property owners.

Where you live may also affect the type of insurance that you require. Some types of insurance may be mandatory, while others may be recommended but not be required in your jurisdiction.

Please speak to a government official if you have any doubts about what is and isn’t required to own and operate a motor vehicle in your province or state.

An impeccable driving record will usually be rewarded with lower premiums.

Try to drive within the speed limit, and avoid the use of alcohol or other drugs while you are driving.

Do not cross red lights and avoid making illegal turns. Do not park in a spot for the disabled, and avoid reckless driving behaviors, such as texting and driving, to avoid getting a ticket.

Even your car make and model may influence how much you pay, and its market value may also have an impact on how much you pay. Plus, your credit score will have an influence.

A poor credit score may not reflect well on your financial standing and may cause your premiums to rise.

Car insurance is required by law in many jurisdictions. It will protect you from theft, vandalism, arson, Acts of God, and liability charges against you if you are responsible for the accident.

Your medical expenses will be covered if you are injured, and your insurance may also cover the injuries of passengers, as well as other drivers and parties that are implicated.

In addition, car repairs will be covered by your insurance in most cases, and property damage may also be covered too.

Factors That Influence Car Insurance Costs

Different insurance companies will offer different packages, terms, and costs. Your age will also affect how much you pay, as younger drivers will usually need to pay more compared to older drivers.

Where you live will also have an impact. For example, urban drivers will usually need to pay more than rural drivers, as urban areas tend to have higher crime rates and more car accidents.

Your car insurance coverage options will also affect how much you pay. The more coverage you obtain, the higher the overall cost will be to enjoy the added protection.

Your driving record will affect what you pay for car insurance: Those with an excellent driving record pay less than people with a poor one.

A poor credit score may also increase how much you pay, as you may be seen as a risk due to your poor financial standing. Your car’s make, type, and age will also affect how much you pay.

For example, a brand new sports car will cost more to insure than, say, a 20-year-old van, as a sports car will cost far more to replace if it is stolen or destroyed in an accident.

Mileage will also influence how much you pay. Generally speaking, the higher the mileage the more you will need to pay to cover your car, as increased mileage is usually indicative of more wear and tear.

How to save on car insurance costs?

If you own more than one car then you should try to take advantage of multi-car discounts if possible. If you own vehicles that you do not use very often then you may want to consider dropping comprehensive coverage on those vehicles to save money.

You should also shop around to try and find better car insurance rates, and you should also up your auto coverage deductibles as well, assuming you are financially stable enough to pay.

Improving your credit rating will also help reduce your car insurance costs, and you should try and lower your annual kilometer/mileage count as well. For example, you can try carpooling or take public transit now and then to reduce your car mileage.

Auto insurance coverage is mandatory, but there are steps you can take to reduce how much you pay annually.

Being Smart

Auto insurance is mandatory for everyone, including young and first-time buyers. Being a responsible driver will help lower your insurance costs, as you will be seen as less of a risk.

Boosting your credit score and avoiding reckless behaviors, such as speeding, illegal parking, and driving while under the influence, will help protect you and the other people on the road.

Being smart will translate to lower costs on your auto insurance.

Jessica Coates
Jessica Coates is a blogger in Toronto. She graduated with honors from the University of British Columbia with a dual degree in Business Administration and Creative Writing. Jessica Coates is a community manager for small businesses across Canada. When not working, she leisurely studies economics, history, law and business solutions.

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