Canadian Finance

While many consumers are looking at creative ways of reducing their expenses in these uncertain financial times, many Canadians are looking at their auto insurance as a prime target. Follow along as I explain the considerations you should factor in to your cost cutting plan.

Your monthly car insurance fees can vary greatly based on a number of different factors. Your vehicle, your driving habits, and your personal characteristics all have a significant impact on the amount of money that an auto insurance company chooses to charge for your personal protection. Most of these aspects are centered around your particular likelihood of being in an accident. However, it is possible to reduce your car insurance expenses by researching the different factors that can drive up your monthly rates. By understanding the different aspects that can inflate your automobile insurance fees, you can avoid certain unnecessary expenses on your monthly payments.

First of all, the type of car that you drive has an enormous impact on the amount of money that a car insurance company chooses to charge. Vehicles that are considered to be dangerous cost far more to insure than more modest cars. For instance, your auto insurance fees will increase greatly if you choose to purchase a vehicle that has poor safety ratings, inadequate safety equipment, or poor reliability ratings. The price of insuring a car also can be amplified by the typical driving habits that accompany a particular vehicle. For example, most automobile insurance companies charge a premium to ensure a sports car because these vehicles tend to be driven at high, reckless speeds. On the other hand, very safe and practical cars such as minivans or station wagons feature remarkably low insurance rates due to their more moderate reputations.

Your driving history also has a vast effect on your monthly car insurance payments. Obviously, if you tend to get in numerous accidents or receive regular traffic tickets, your car insurance fees will increase greatly. Auto insurance companies see multiple traffic law infractions as a sign of unsafe driving, and they therefore assume that you will be more likely to get in an accident that wrecks your vehicle. This means that they will charge larger car insurance fees in order to alleviate the cost of an eventual accident. Conversely, drivers whose records are clear of traffic violations oftentimes are given a monetary bonus for their safe driving habits. In addition, people who drive extensively usually must pay higher car insurance fees than those that only use their vehicles occasionally.

Car insurance fees are also largely determined by your personal characteristics. Young drivers are far more likely to get in an accident than more experienced drivers, and as such, the cost of insuring someone under the age of 25 is considerably greater than the cost of insuring an older person. Additionally, women are statistically guilty of fewer traffic violations than men, so a man's automobile insurance rates are usually higher than those of a woman. Your education also has a significant impact on your auto insurance fees; the lower your education level, the higher your car insurance will be. Finally, your marital status is taken into account when calculating your auto insurance expenses. People who are married generally enjoy lower car insurance fees than people who are single.

By limiting the factors that insurers can use against us, we can enjoy greater value on our driving expenses. For additional savings one might consider reducing their car insurance coverage, or alternative forms of transportation.