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Factors that Affect the Cost of Your Car Insurance

Given that a car insurance is mandatory for Australians, it can be tempting to lower your coverage to decrease the cost of your car insurance.

But doing so is a no-no, since there are many factors that affect your car insurance’s cost. Here they are:

1. The Driver

Yes, you heard it right, your personal details affect the cost of your car insurance. Insurance companies are legally allowed to obtain your personal information and use it to determine if they should charge more or not.


All car insurance companies have their own formula that factors in age. Usually, those who are aged 25 and up get better rates because they have more stable jobs.

Driving Record

Companies look at your driving record to see how many accidents and violations you have incurred. The more driving incidents you had, the higher the cost might be.

Financial Record

Insurance providers have to check your credit score as well. The better it is, the better your car insurance cost will be.


If you live in a nice neighborhood with low crime rates, the better your insurance cost might be. But, if you live in a risky area, your insurance cost might be higher.

Home Ownership

Whether you own a home or rent an apartment plays a role in how much you pay. Most companies offer discounts to homeowners because they often represent financial stability and lower risk.

2. The Vehicle

Year Manufactured

Insurance companies such as Shannons Insurance consider the year your car was manufactured.

Old cars tend to have higher rates since they are harder to repair and have higher risk compared to new ones. Consequently, new cars receive discounts, depending on the company.


The manufacturer of your car affects your insurance rate. Luxury vehicles made by foreign companies tend to have more expensive insurance rates than their regular counterparts.

Foreign-made vehicles also tend to have expensive parts and purchasing prices so it’s just fitting that it costs more to insure them.

Safety Features

The better safety features your car has, the better insurance rates you can get. When your car has an excellent alarm, dash cams, and dual airbags, the lower your insurance cost might be.

3. The Insurance Provider

State Laws

Insurance providers have to follow the laws of the state you live in. Some states have higher minimums, while others have lower ones. Whatever the minimum is, your insurance provider cannot go lower than it.

Length of Time

How long you’ve been with the company determines how much you pay. The longer you’ve been them, the lower your insurance rate might be as each year passes by.

Company Size

Some insurance companies have to pay thousands of employees. Their salaries are carried over to the cost of your car insurance. Others have investments, the quality of which can affect their rates as well.

Various things affect how much you pay for car insurance. Knowing these factors can guide you in finding the right one.

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