car bills and insurance

Everything that affects your car insurance – explained

21st Sep, 2020

Let’s be honest – nobody likes paying car insurance. Especially not when the price seems annoyingly high, as it so often does. But just like when you scrap your car, there are actually a huge number of factors in play when it comes to calculating the instant online quote you get for your car insurance. It can be helpful to know them all – especially if you’re looking for ways to save yourself a bob or two!

1. Your age

Age tends to be one of the most well-known factors on insurance prices, because as far as insurers see it, the relative inexperience of younger drivers tends to make them statistically more likely to become involved in an accident. Drivers aged between 17 to 25 tend to face the highest premiums, which can make the start of your driving career an eye-wateringly expensive endeavour.

The good news, of course, is that it accordingly gets less expensive over time. What’s more, there are ways that younger drivers can take the sting out of those initial sky-high prices. For example, you can choose a telematics car insurance policy, in which you’re fitted with a black box to monitor the state of your driving, giving your insurer more confidence in the quality and safety driving.

2. Your annual mileage

The more you drive, the more likely you are to be involved in an accident. That’s basic probability, and it’s also the same basic framework that insurers use to calculate your insurance. That means if you use your car to commute to and from work, you’ll probably end up paying more for it than if you keep it parked at home during the week. You’ll likely be driving longer hours, and on busier roads at peak times, all of which can exponentially increase your chances of being involved in an accident – so the higher your mileage and the further you drive, the higher your premiums are likely to be.

smiley driver

3. Your location

When calculating your policy, insurers will generally want to know your address, and a fair bit of detail about exactly where you keep your car. Your address matters because insurers will assign certain elements of risk to certain postcodes. If you live in a built-up area where the risk of accidents is generally higher, you’ll probably find yourself having to pay higher premiums. The same applies if you live in areas with higher levels of vehicle crime. The differences can be quite precise – theoretically, you could be paying a higher premium than someone who parks just two streets away, if you’re living near a particularly busy or dangerous stretch of road.

As for the exact location of your car, this matters because insurers will be able to more accurately assess the level of risk to it when it’s parked up. If you’re keeping it out of sight in a securely monitored car park or secure garage, you’ll get the benefit of lower premiums compared to someone who just has street-level parking.

4. Your job

Your occupation affects your car insurance for very similar reasons to location and mileage, in that it gives insurers an extra indication of how likely you are to claim. Certain occupations are associated spending more time on the road, or transport of expensive equipment, or working in higher risk areas. For that reason, estate agents, football players and even disc jockeys can all find themselves having to pay higher premiums.

Much like the weirdly precise nature of postcode differences, the statistical nature of insurance pricing can lead to some odd quirks in the calculations. People with very similar jobs can end up paying notably different premiums, such as chefs and kitchen staff. Believe it or not, it gets even more pedantic than that – being a ‘company director’ might mean you have to pay more than if you were simply ‘director of a company’. That’s why they always tell you to be as accurate as you can when you’re giving them information about your job!

5. Your driving history

You don’t need to be an expert to see why this has such a strong bearing on the price of your car insurance. If you’ve made any recent claims, or you have any convictions or points on your licence, you’ll almost certainly find that your premiums are higher, as insurers will view you to be more likely to claim in future. On the other hand, if you haven’t made any claims for a year or more, you should be able to benefit from a no claims bonus of some sort. For every additional year you go without making a claim, up to a total of five, the more favourably you’ll be viewed by insurers.

6. Your car itself

Different characteristics of your car all have various effects on the price of your car insurance. Its purchase price and rarity will affect your insurance quote. The more generally desirable it is, the more likely it is to be targeted for theft or vandalism, which results in extra risk for your insurer. The availability of components also plays a part, as cars that require rarer or more specialised components are frequently harder to repair, resulting in extra cost for your insurer. And if it’s got a large and powerful engine, that also increases the risk that it might be involved in a high speed accident, driving up your premiums further.

On a similar note, if you’ve got any modifications on your car, you’ll have to be prepared for the higher insurance quote they’ll bring you. Insurers are rarely keen on mods, since they can increase risk in all sorts of ways. Cars with boosted engines can be more difficult to control, making them more likely to have an accident, while fiddling about with the various features and functions presents a risk that you’ll mess with something that you shouldn’t. Even purely aesthetic mods can increase your premiums, as they can make your car a more prominent target for thieves.

On the other hand, if it has factory-fitted immobilisers or alarms, that immediately takes off some of the risk, which can bring down your premiums slightly. Basically, a hulking luxury sports car that’s built for performance will cost far more to insure than a humble Ford Focus. But you probably knew that already!

7. Your excess

This is thankfully something you’ve got a little more direct control over. You’ll likely be asked to agree to pay a mandatory excess in the event of an accident, but the optional extra amount is all up to you. The more optional extras you agree to pay, the less your insurance will cost. This is because you’re taking on more of the risk from your insurer. Like lots of other choices around car insurance, really this comes down to how much of a gamble you’re willing to make. If you choose to pay no voluntary excess beyond the mandatory amount, this means that your insurer will be responsible for paying almost the full amount if you have an accident. They’ll make sure to cover that potential cost by charging you higher premiums in the meantime.

reclaiming car insurance

8. What type of insurance you choose

Again, this one is basically all down to you. Different insurers will offer different sorts of policies, but they can all be variously grouped into three main categories:

  • Third party only
  • Third party, fire and theft
  • Comprehensive car insurance

As you’d expect, third party only is the most basic level of car insurance, and protects other drivers, vehicle and property in the event of an accident that was your fault. Third party fire and theft covers your car in case of an unexpected blaze or a suddenly-empty parking spot, while comprehensive cover is the most broad-ranging type of insurance available. If you’ve ever heard someone talk about being ‘fully comp’, that’s what they’re referring to. Third party is of course the cheapest, but as with lots of things in life, the cheapest option isn’t always the best. Sometimes it’s worth paying extra just for the peace of mind!

While car insurance may not be the most popular thing in the world, there’s no doubt that it’s a lifesaver if you ever have an accident in your car, helping you get back on the roads again in no time. But there might come a time when your car is in a serious enough accident that you might decide it’s not worth claiming on insurance to repair. And if that moment comes, that’s where we can help at Scrap Car Network. Our mission is to get you the very best price when you scrap your car, and to take all the fuss and hassle out of doing it. Just head on over to our homepage to get your very own instant scrap car quote, and find out how much your car is worth!

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