Dave Ramsey Says These Are Some of the Reasons You Might Pay More for Car Insurance

Don't be shocked if your premiums are costlier than expected. 

Owning a car can be an expensive prospect. But it's easy to argue that for many people, a car isn't an indulgence -- it's a necessity. 

Now, the total cost of vehicle ownership for you will depend on factors like how much of an auto loan you're on the hook for and the amount of driving you do. Your auto insurance rates will also play a role. And those, unfortunately, might end up being more expensive than you bargained for.

There are different factors that auto insurance companies consider when determining premium rates. But financial guru Dave Ramsey says these are some of the reasons you might end up having to spend more on car insurance.

1. You have a lower deductible

Your deductible is the sum of money you're required to shell out each time you file a claim against your auto insurance policy. And it's easy to see why you may want a lower one. But you should also know that in general, the lower your deductible is, the higher your premium costs might be. So if you're willing to raise your deductible, you might pay less for auto insurance on a monthly or yearly basis. 

2. You drive an expensive vehicle

Car prices are up these days, so if you have to buy a new one, you may end up spending considerably more than you would have a few years ago. But the more expensive it is to replace your car, the more you're likely to pay for auto insurance. So if you want to save money, don't opt for the highest-end model and skip some of the features you can manage without. That might not only save you money on car insurance, but also make your ongoing auto loan payments more manageable.

3. You don't have the best driving history

Auto insurers look at drivers' records when determining rates. If yours is loaded with moving violations, expect to pay more for car insurance. But also, ask if there are things you can to make up for that record, like taking a defensive driving course.

4. You've filed too many claims recently

The whole purpose of having auto insurance is being able to file a claim when you get into an accident or your vehicle sustains damage. But filing too many claims in short order could result in higher premiums -- even if it's not your fault you've run into a string of bad luck.

5. You have a long commute

A longer commute opens the door to more potential accidents. Your auto insurance rates might be higher if you drive a long way to work, or if you drive on highways with a higher incidence of crashes.

6. Your credit score isn't great

You'd think your credit score would have nothing to do with your car insurance rates. After all, you're not asking your auto insurance company to lend you money. But actually, poor credit could make you seem like a riskier person to insure -- even if your driving record says otherwise. So if you're able to boost your credit score, it might result in savings on auto insurance.

7. You have too many lapses in coverage

If you own a car, you need auto insurance. But if you go for a period of time without coverage, once you buy insurance again, you could end up being charged more due to a previous lack of coverage. 

8. You live in a big city

City drivers may be more likely to fall victim to auto theft than those living in suburbs. So if you're a city dweller, that alone might result in higher auto insurance premium rates.

9. You're older, younger, or female

Ramsey insists that insurance companies look at age and gender when determining premium rates. And he says that drivers who are under 25 and over 75 tend to have higher costs. For the former, it's a matter of having less experience on the road. For the latter, it's a matter of being perceived to have a slower reaction time (and perhaps concerns about vision issues). Ramsey also says that in some states, women pay more for car insurance than men. That's a shame given that they commonly earn less than men, too.

In some cases, you might end up paying more for car insurance due to circumstances you can't control, like your age and gender. But there are some things you can do to lower your premiums, like driving safely, boosting your credit, and raising your deductible.