Why Does My Car Insurance Go Up as My Car Gets Older? - Darr Schackow Insurance Agency (2024)

FAQs

Why Does My Car Insurance Go Up as My Car Gets Older? - Darr Schackow Insurance Agency? ›

Your insurance premium is determined by the risk associated with your car, and your insurance company spreads that risk evenly over the expected life of your car. So when your car is new, you are getting a better deal on your insurance premium.

Having an older car with expensive parts results in more expensive repair costs if the vehicle is ever involved in an accident or requires replacement parts. Because of this, insurance costs for the vehicle may also increase with estimated repair cost values.

While it can seem arbitrary, there are actual reasons you can see your price go up and down. Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.

Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.

Your car insurance rate went up after removing a vehicle from the policy most likely because you weren't given a multi car discount anymore. Companies usually offer a multi-car discount that lowers premiums, and when you go down to one car that discount is removed.

Young drivers ages 16 to 24 tend to have the most expensive car insurance. Drivers in this age group are often inexperienced and are more likely to get into car accidents and file insurance claims. As a result, car insurance companies often charge higher premiums to young drivers.

USAA, Nationwide, Travelers, Erie, Geico and Progressive are the cheapest car insurance companies nationwide, according to our analysis.

If your car insurance goes up for seemingly no reason when you renew your policy, it's likely due to an increase in risk that's outside of your control. This could include reasons like increased claims in your area (due to more extreme weather damage, more accidents, etc.) and higher car repair and replacement costs.

Common rating factors include age, location, driving history, credit score, and more. Put simply, the less risky your rating factors are, the cheaper your car insurance policy will be. Some auto insurance rating factors — such as driving record or vehicle type — have relatively sizeable impacts on car insurance costs.

In many states, car insurance companies take your creditworthiness into consideration when setting your premiums. According to The Zebra, an insurance comparison site, drivers with poor credit pay an average of $1,500 more a year compared with those with excellent credit.

Why did my car insurance go up if nothing changed? ›

Why did my car insurance go up when nothing changed? Your car insurance may have increased this year due to various factors, including inflation, higher repair costs and an increase in auto thefts in your area.

Rate level increases often come about because of trends in the industry towards more expensive vehicle repair and medical costs. Repairs and medical costs are almost always on the rise, so overall rate decreases are a very rare occurrence.

Fewer auto mechanics, a tighter supply of used vehicles and increased health care bills are fueling rising prices. As premiums have spiked so too have the number of uninsured drivers.

If the insurance company has decided to cancel your policy for other reasons, your options may be more limited. In the best case, you'll simply have to pay a higher premium and be more careful about your driving habits. In more dire cases, you'll have to shop for insurance on what's called the “nonstandard” market.”

If your policy has a no-claims discount, how much car insurance goes down after one year of no claims is usually between 10% and 15%.

Depending on the auto insurance company, canceling your policy before the end of its term may result in a cancellation fee. State laws can determine if a fee is allowable. If so, it is up to the insurer to set that fee, which is often taken out of the prorated refund.

Since new vehicles have a higher initial value, they have higher car insurance premiums, but because of the rapid depreciation, these premiums may also decrease over time.

Car insurance typically drops as you grow older, when you drive safely for three to five years following an accident or citation, and when you switch to a cheaper company. Both men and women see the steepest drop in car insurance costs between ages 18 and 19.

Generally speaking, the newer the car the cheaper it will be to insure. Cars aged 5 years and less are cheaper to insure than cars aged between 5 and 10 years and beyond. This is because more modern cars are often cheaper to repair, and mechanics are more likely to be able to find parts.

Your Progressive rates may increase after six months depending on a number of factors. Like other car insurance providers, Progressive will typically raise your rates if you receive a speeding ticket or moving violation, cause an accident or make comprehensive insurance claims.