Getting yourself a new car is an exciting experience. You decide on a budget, do your research, take multiple factors into consideration, and feel as though you’ve made a sound, financial decision.

However, even the most prepared and knowledgeable car owners can forget to factor in what that new car’s insurance will cost. A variety of factors go into the cost of your car insurance. It essential to consider the hidden cost of your insurance before your next purchase.

The hidden cost of insurance: how insurance rates are calculated

There are a variety of factors that go into the cost of your car insurance. When insurance companies provide you with a rate, it is made by calculating the risk to insure you. Plus, estimating the cost of repairs in the event you need to use your insurance. When you get a new car, the following things can affect how high (or low) your insurance will be:

Age, gender, and marital status

Younger, less experienced drivers typically pay a much higher insurance rate than older drivers. This is because younger adults and newer drivers are statistically more likely to get in accidents or experience traffic violations than older, more experienced drivers.

Some insurance companies may also drive up premiums for male drivers. They are assumed to drive “more dangerously” than females. You can also expect bigger insurance discounts if you’re married than if you’re single.

Car type and body style

The specific car you buy can have a strong bearing on your insurance premium. Fast and speedy race cars catch higher premiums because the insurance company suspects you’ll be more likely to experience an accident.

High-end luxury vehicles will also catch a higher insurance premium simply because repairs and replacing the vehicle will cost the insurance company more than a cheaper car.

Body style and features can also play big roles. Your insurance company will take into consideration whether your vehicle is a sedan, truck, SUV, van, or luxury vehicle.

Discounts can be provided by insurance companies for certain features your new car may have, such as built-in security features and anti-lock brakes, as stated by Insure.com.

Location of your new car

Where you live and where you park your car is important in determining the cost of your car insurance. Because crime, vandalism, and theft rates are higher in urban areas or cities, insurance rates are also typically higher in these types of places.

People who live in suburban or rural areas may expect lower rates than their city friends. Certain states may also catch higher-than-average rates because of state-mandated requirements regarding car insurance.

Your driving record and how much you drive

The insurance provider you use will take your personal information into account, in addition to the details of your car. Insurers will look at your personal driving record to see how many accidents or traffic violations you have had.

Premiums can be raised for prior accidents on your record and those with clean driving records tend to experience more insurance discounts than those without one.

Insurance providers also consider how much you’ll be driving your new car. Car owners who take their cars on long commutes are more likely to need repairs in the future, and therefore pay higher premiums than “weekend drivers.”

Type of coverage for your new car

Car insurance comes in all shapes and sizes. The amount and type of coverage you have can have strong bearings on the rate you pay. 

According to the experts at Allstate, most states require a certain level of coverage; involving at least liability coverage that covers expenses of other parties involved in an incident.

Other coverage options can include collision, comprehensive, uninsured/underinsured motorist, and personal injury protection. You may also opt for additional coverage and services within your insurance provider that raise the price of your insurance, like roadside assistance and rental car reimbursement.

Your coverage and premium can also be determined by your policy limit or the maximum that is paid toward a loss, and deductible, which the amount you are responsible for paying up front before your insurance kicks in.

Average insurance rates

According to The Zebra, car insurance costs an average of almost $1,500 per year or around $700 per 6 months. Insurance rate averages for adults between the ages of 50 and 59 are the lowest, while people between the ages of 16-19 pay the highest rates.

People living in the New England area pay an average of less than $600 every 6 months, while people in the Southwest pay the highest average rates at more than $800 every 6 months. It’s important to remember, however, that individual rates can vary greatly depending on the factors above. Talking to your insurance provider about finding the best deal is essential before making your new car purchase.