Car insurance can be a major cost to cover each month and a source of frustration for many motorists (especially new/young drivers!). There are dozens of factors that determine how much your car insurance is and you should know that some of these can be controlled, which means that there are ways to reduce the amount that you pay. Read on to learn about the main factors that determine your premiums.

Choice of Car

One of the primary factors is your choice of car – it will always cost a lot more to insure a flash sports car compared to a basic hatchback! Insurers will look at the value of the vehicle and how much it would cost to replace, but also how powerful the car is. Therefore, if you want to keep your costs down then you will want something that is affordable to replace (a used car) and something that is not too powerful. Cars are categorised into insurance groups, so you should always look at groupings when in the market for a new car.

Driving Habits

Driving habits are always a key factor, which is why insurance companies will always ask a lot of questions before offering a quote. One of the most important factors is your annual mileage – the more time on the road, the more likely you are to have an accident and also the more wear and tear the car will suffer. If you are able to reduce your annual mileage, you should be able to save a fair amount of money (and also reduce your fuel costs).

Where You Live/Park

Another factor that is sometimes overlooked is where you live. If you live in an area with high crime rates or near a road where there are a lot of accidents, you will find that this is reflected in your premium. Additionally, where you park the car is considered. If you are able to park the car off the road, you could save a lot of money.

Driving History

Obviously, your history will also be considered. Insurers will look at previous insurance claims, penalty points, suspensions and convictions. It is always worth shopping around for car insurance deals regardless of your history as you may be able to find savings by comparing providers.


Age is also a key factor. If you are a young driver, you will be considered a higher risk and this is backed up by statistics. Additionally, those that are 70+ can suffer from higher premiums as older drivers are viewed as higher risk.

These are some of the main factors involved in establishing car insurance premiums. There are many factors, but some of these are controllable which means that there are ways that you can lower the amount that you have to pay and save money.