Road Test Scores: Cheaper Insurance Or Not?

Many factors affect the cost of car insurance, and it's essential to understand these variables to keep costs down. While a higher road test score may not directly translate to cheaper insurance, it can indicate a driver's level of experience and skill, which insurers consider when determining premiums. Factors such as age, location, occupation, credit score, vehicle type, and driving history are also considered, with insurers weighing these elements to assess risk and set prices. Ultimately, safer drivers are less likely to be involved in accidents and make claims, which can lead to lower insurance costs over time.

Engine size

The size of a car's engine is a factor that influences the cost of insurance. Generally, the larger the engine, the more powerful the car, and the higher the insurance group and premium. Conversely, smaller engines are typically more fuel-efficient, particularly in urban areas, and are cheaper to insure. However, it's worth noting that turbocharged engines can be smaller yet packed with more power, making them more expensive to insure.

The engine size is an indicator of a vehicle's performance and risk level. More powerful cars are often more expensive to buy and insure due to their higher market value and repair costs. Additionally, larger engines may increase the likelihood of accidents, especially for new drivers. As a result, insurance companies tend to assign higher rates to more powerful vehicles.

The impact of engine size on insurance costs is also influenced by other factors, such as age, driving history, location, and profession. For example, students living in areas with higher crime rates may want to consider leaving their cars at home to reduce insurance costs. Furthermore, certain professions, such as footballers, delivery drivers, and travelling salespeople, tend to have higher car insurance premiums.

When it comes to motorcycles, the principle remains consistent: smaller engine sizes are typically cheaper to insure. For instance, 125cc motorbikes are generally more affordable to insure than larger engine models. However, additional factors, such as the rider's age and licence type, can also influence the insurance cost.

In summary, while engine size is a factor in determining insurance costs, it is not the sole determinant. Other variables, such as vehicle type, safety features, repair costs, and personal factors, also play a significant role in calculating insurance premiums.

Safety features

While there is no direct evidence that a higher road test score will make your insurance cheaper, there are several factors that influence the cost of car insurance. One of the key variables is the length of time you have held a full driving licence, as less experienced drivers are more likely to make a claim. This means that the longer you have been driving, the more likely your insurance costs will be lower.

When purchasing a vehicle, it is important to consider its safety features and ratings. The National Highway Traffic Safety Administration (NHTSA) in the US has a 5-Star Safety Ratings program that provides consumers with information about the crash protection and rollover safety of new vehicles. The 5-Star Safety Ratings system helps consumers make informed choices when buying new vehicles, allowing them to compare vehicles, car seats, and tires. The NHTSA also has a Vehicle Comparison Tool that provides an overview of safety ratings and recall information.

The IIHS (Insurance Institute for Highway Safety) also evaluates vehicle safety and issues ratings in three crash-worthiness categories, as well as ratings for safety-related features like pedestrian front crash prevention and headlight effectiveness. While the IIHS ratings are different from those of the NHTSA, they are considered complementary. The IIHS awards scores of Good, Acceptable, Marginal, and Poor, and a vehicle with a top rating of Good is considered relatively safer.

Some specific safety features to look for when purchasing a vehicle include:

• Airbags
• Seat belts
• Tire Pressure Monitoring System (TPMS)
• Rollover resistance
• Frontal-crash-avoidance systems
• Head restraints
• Vehicle-to-vehicle front-collision avoidance
• Headlight effectiveness

Driver's age

Age is one of the most important factors in determining car insurance rates. Younger drivers are generally more likely to have accidents or take risks on the road. In the United States, the fatal crash-per-mile for licensed drivers aged 16-19 is nearly three times the rate of individuals aged 20 and older. Inexperience, distracted driving, and lower seat belt usage are factors that contribute to this. As a result, younger drivers may pay double or more than the average insurance rate.

Insurance premiums are a measure of how risky and expensive an insurer believes a driver will be to cover. Insurers regard young, inexperienced drivers as the riskiest customers, and data from the Department for Transport and road safety charity Brake confirms this. In 2019, drivers between 17 and 24 accounted for 7% of all license holders but were involved in 16% of fatal and serious crashes.

However, insurance rates are typically the lowest for middle-aged drivers, as they have more practice behind the wheel and road maturity. Experienced drivers in their mid-30s to late 50s have fewer accidents, and thus, lower insurance rates.

For older drivers, car insurance costs may increase, even for those with a great driving record. Physical, cognitive, or visual impairments can make older drivers more prone to car accidents, leading to higher insurance rates. Additionally, health conditions such as failing eyesight can impact accident rates for seniors, causing a slight increase in insurance prices.

It's worth noting that maintaining a clean driving record is crucial for keeping insurance costs low. If a driver, regardless of age, can demonstrate safe driving behaviour and avoid accidents, their insurance costs are likely to decrease over time.

Credit score

A credit score is a number that estimates how safe it is for a company to lend you money. The higher your score, the more likely a bank thinks you are to pay back money you borrow.

Your credit score can impact your car insurance rate. A higher credit score typically leads to lower car insurance rates, with almost every insurance company and in most states. Research has shown that people with lower credit scores are more likely to file insurance claims. This correlation holds even when controlling for factors like race, income, and location.

When calculating car insurance policies, providers try to assess how reliable or risky a customer is, and how likely they are to make a claim. A pattern of late payments or credit delinquencies might signal to insurers that you are a higher risk. Thus, those with poor credit scores may face higher insurance premiums.

However, it is important to note that the impact of your credit score on your insurance rate may vary depending on the company. Different insurers have different algorithms for calculating quotes, and some insurers specialize in accommodating high-risk consumers. Additionally, other factors such as age, driving experience, and vehicle type also play a role in determining insurance rates.

While improving your credit score can help lower your insurance costs, it is not the only factor considered by insurers. Shopping around for quotes and exploring various insurance providers can help you find the best rates, even with a poor credit history.

Education level

The education level of a driver is a factor that insurance companies consider when determining auto insurance premiums. Studies have shown that drivers with advanced degrees are less likely to make a claim than those without. For example, a driver who has completed twelfth grade may pay a higher premium than a driver with a bachelor's, master's, or Ph.D. degree. Most studies show that drivers can save anywhere from \$300 to \$600 per year by having some form of post-secondary education.

The link between education level and insurance premiums is due to several factors. Firstly, a higher level of education often leads to better job opportunities and higher earnings, making it less likely that individuals will miss car insurance payments. Secondly, individuals with lower levels of education are deemed high-risk clients by insurance companies, as they are statistically more likely to engage in unsafe driving behaviours and make more insurance claims. This results in higher rates and insurance costs for these individuals.

While the impact of education level on insurance premiums is significant, it is not the only factor that insurance companies consider. Other factors, such as location, occupation, credit score, age, type of vehicle, and driving history, also play a crucial role in determining insurance premiums.

It is worth noting that some states have attempted to ban the use of education levels as a factor in determining insurance rates, but these efforts have been unsuccessful. However, some insurance companies offer discounts for higher education, while others place less emphasis on education level. Therefore, it is beneficial for individuals to compare insurance rates from multiple companies and choose a provider that suits their educational background.

Additionally, for young drivers, academic performance and enrolment in driver's education programs can lead to significant savings on insurance premiums. Many insurers offer good student discounts of up to 20% or more for students with a B average or higher. Furthermore, driver's education provides foundational skills that enhance safety on the road, which insurers associate with lower risk. As a result, parents can explore options like driver's education, good grade discounts, and multi-driver policies to reduce costs and increase their teen's confidence and safety while driving.

Frequently asked questions