The Five Factors That Affect Car Insurance Rates

Car insurance helps to protect you in the event of an accident and any unknown physical damage to you, and/or your vehicle, as a result of that event. However the American culture makes many hesitant to purchase car insurance because many Americans think that they are invincible or that car insurance isn’t worth the cost. However, with nearly 6 million car accidents occurring each year having car insurance from a reputable insurance agency is imperative.

Those who have been in an accident know the value of having car insurance. However, some premiums can reach limits that make it unattractive and easy to want to avoid on a monthly basis, but there are a few factors that have quite an impact on your monthly car insurance rates: like…


1. Mailing Address and Geographic Location

Where you live weighs heavy on your car insurance rates.  If you live in an urban area where traffic is moderate to high and there is often a lot of moving parts on, and along, the roadways, you’ll more than likely see a higher rate. On the flip-side of the coin, if you live in a more rural setting where you’re lucky if you pass by 2 cars on your way to a destination, your monthly car insurance rate would be lower.

For Pennsylvanians, the average cost of car insurance annually is around $1,440 or $120 per month (according to Value Penguin). In addition to your more local region, the state is which you reside in also plays into what your monthly car insurance rate will be. It’s important to note that car insurance premiums are increasing each month, but just remember that even though rates are increasing some other factors may be having the adverse effect.

2. Age, Gender, and Marital Status

We all know that males under the age of 25 are more likely to have auto accidents that adults over the age of 25 and females in the same age category. There’s a reason why individuals must pay an additional fee when renting a car with a driver under the age of 25.  Past experience and reporting have proven to the car insurance industry that the under 25 age demographic have a higher risk for a causing a car accident.

Let’s take that a step further and talk about marital status. It’s believed that individuals who are married, take their time on the roads. Typically with additional members in tow on the road, drivers are more likely to drive safer, ultimately avoiding car accidents.

3. Past Driving and Traffic History

This is the most common factor affecting car insurance that Americans are aware of. The more auto incidents and traffic violations that are bogging down your driving history, the higher your monthly insurance rate will be.  You may be sensing a theme here, but it’s simple: drive safe to keep your car insurance rates low.

4. Policyholders’ Credit Score

Believe it or not, the policyholder’s credit score has an impact on the monthly car insurance rate. Now, it is not the sole deciding factor in your car insurance rate; it actually doesn’t carry a lot of weight in determining your monthly rate. If anything, the credit score is used as a risk gauge for the policy holder. 

5. Type of Car Your Driving

The final factor that impacts your car insurance rates is the type of car you drive.  What are the make, model, and year of manufacturing for the car that you’re driving?  The older the car, the more at risk it is for malfunctioning on the road and being involved in an auto accident. 

As you’ll notice, some of these factors can be controlled, some of the factors cannot be controlled, and some factors will get better with time. If you have any questions regarding where to obtain auto insurance or would like to speak with a member of the LRRCU staff, visit

Kara Vincent
Kara Vincent

Kara Vincent is the Financial Officer at Lancaster Red Rose Credit Union.

Due to water damage, our Embassy Drive branch will be closed until further notice. Items placed in the night deposit box will be processed daily. Members can visit our other branches to conduct transactions. We apologize for the inconvenience and are working to get the branch up and running as soon as possible.