Beyond the Sticker Price - The Insurance Cost of That Car You Have Your Eye On

The United States is a nation of car lovers. Our wide open spaces and vast expanses of land not only give us the freedom to drive, they make it a daily necessity. Unlike the more densely packed nations of Europe, America doesn’t have a mass transit system, and most of us wouldn’t use it anyway - we are individualists, and we crave our space.

But America’s love affair with the automobile has a downside, too, and it’s not just our national “addiction to oil.” Too often, car-obsessed consumers under-budget for their cherished vehicles, and are then unable to make the monthly payments. When this leads to repossession, the love affair turns seriously ugly, as the car buyer’s credit report receives a black mark that will last for seven years. Worse yet, if a repossessed car’s resale value is less than what its buyer owes the bank, the car buyer can find himself even deeper in debt.

It pays to properly budget for your new car. Don’t determine the most you can possibly pay - budget for what you’re sure you can comfortably pay. Sudden joblessness is an ever-present threat for most Americans in today’s economy, so be sure that your unemployment benefits will adequately cover your car payment. And when budgeting for a new vehicle, don’t forget to factor in insurance.

How Much Will Your Car Cost to Insure?

The Bill of Rights begins with, “We hold these truths to be self-evident, that all men are created equal.” Unfortunately, the Bill of Rights doesn’t apply to cars, and car insurance companies do not view them equally.

Several factors affect how much your car will cost to insure. Of course, there are the reasons unrelated to your car, such as your age, gender, marital status, driving record, credit history, and where you live. These all tell insurance companies how much of a risk you will pose to them if they agree to insure you. For example, a 52-year-old married woman with an equally perfect driving record and credit history, who lives in the middle of nowhere might be the ideal “risk.” A 22-year old unmarried male with a list of tickets only outdone by his list of creditors, who lives in an area best known for dense traffic and violent crime would be about the worst “risk.” But if the 22-year-old was somehow the owner of a Dodge Viper, he would be an even riskier proposition.

The risk presented by your car is the sum of several factors. Expensive cars are obviously more expensive to insure, since the amount of damage that can befall them is greater (a $50 beater can only sustain so much damage - the amount of damage that it can inflict on other cars is the primary concern). How often your car is involved in accidents and how well it holds up in crash tests are major factors, as is how expensive your car is to repair. And of course, the frequency with which your model of car is stolen is yet another factor.

Comparison Shop for Quotes in Advance

Most dealers will require you to have car insurance before you drive your car off the lot, so be sure to do some comparison shopping for car insurance in advance. Consumer advocates recommend that you get at least three quotes, since the price at which each company will offer you coverage can vary substantially. Luckily, the internet makes it easier than ever to be a comparison shopper. Use web sites like this one to do your homework before even setting foot on the lot, and that way you’ll be able to budget for the true cost of that new car.car.