3 Surprising Things That Can Affect Your Auto Insurance Rates

You want the best auto insurance that you can get, just in case you need it, but you don't want to pay too much for it. After all, unless you get into accidents frequently, chances are that you'll pay far more into the insurance company than you'll ever receive in payouts. If you're like most people, there are many things you'd rather spend your money on other than insurance. You can reduce your auto insurance payments by shopping around and taking advantage of discounts and deals, but you should also be looking out for things that are negatively affecting your auto insurance rates. Keep an eye out for the following surprising factors that may be affecting how much you pay each month for auto insurance.

Your Credit Report

Many people don't realize that car insurance companies don't only look at your driving history and your vehicle. Many insurance companies will also pull your credit report and take it into account when determining your auto insurance rate. The worse your credit score, the higher your auto insurance rate is likely to be – even if you have a perfectly clean driving record. A bad credit report can leave you paying as much as 20 to 50 percent more for auto insurance than you would pay if you had a clean credit record.

Auto insurance companies consider your credit score because there is reason to believe that having bad credit makes you a bigger risk. This is a controversial but common belief, so there's a good chance that your auto insurance company considered your credit score when issuing your policy. If you're planning to shop for new auto insurance, it may be a good idea to check your credit score first. Sometimes you can improve your score – and by extension, your auto insurance rate – by disputing inaccuracies on your credit report and making sure that debts that have been paid off are removed from the report.

Errors In Your Vehicle Information

It's surprisingly common for errors to find their way into your auto insurance policy. These may be caused by simple typos, miscommunications, or lapses in memory, but they can make a big difference to your policy. Even if you notice an error, you may not think it's important enough to correct, but this is a mistake. Something as simple as accidentally reporting your four-door car as a two-door car can cost you, because two-door cars are typically more expensive to insure than four-door cars.

In addition to making sure the door count on your auto insurance policy is correct, make sure that your policy lists the correct mileage, the correct manufacturer year, and the correct engine type, among other things. No error is too small to require attention – almost any mistake could raise your premiums.

Your Payment Plan

How are you paying for your insurance? Many people opt for monthly payments because they're easier to manage, but doing this could cost you in the long run. Insurance companies often charge administrative fees to cover the costs of breaking your premium payment into installments. While you may be paying less money up front, you're paying a fee every month that you wouldn't be paying if you'd paid the entire premium in full.

If you can't afford to pay your entire premium in full, consider splitting your payment into three month or six month installments instead of monthly installments. You'll still pay an administrative fee, but it will be lower than the fee that you'll end up paying when you pay monthly.

By keeping an eye on your credit report, watching out for errors in your vehicle report for your auto insurance policy, and paying your premium in larger increments, you can reduce the total amount that you will spend on your auto insurance. That will leave you more money to spend on things other than insurance.