Why It Might Cost More to Insure a Car in a City Than in a Suburb

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  • Auto insurers take different risk factors into account when determining premium rates.
  • Since cities tend to have higher crime rates, denser populations, and less private parking than suburbs, your auto insurance might cost more in a city.

Prepare for your costs to go up if you move to a city.

Many people migrate from cities to suburbs as they get older or their families expand. But you might end up in the opposite situation, where you're moving from a suburban area to a city.

Maybe you're embracing city life to be closer to your job. Or maybe you've grown bored of the suburbs and want a change.

In some cities, having a car isn't so necessary. That's because you can fall back on public transportation -- and save yourself a lot of money in the process compared to automobile ownership.

But you may want to hang onto your vehicle once you take up residence in a city. You might need it for errands, weekend trips, or even your commute if your office happens to be in a suburban area you can't reach by bus or train.

You're no doubt aware that auto insurance is one of the biggest expenses you'll face in the course of owning a car. But you should also know that if you move from a suburb to a city, your auto insurance rates might climb. Here's why.

1. Crime rates could be higher

Although this isn't always the case, it's often the case that crime rates are higher in cities than in suburbs. And that means your vehicle may be more likely to get stolen. That's something auto insurance companies know to account for. And so you may find that due to that added risk, your premium costs go up.

2. The population may be denser

Cities tend to be more packed than suburbs. And the more cars there are on the road, the more likely it is that an accident could occur -- or at least such is the logic your auto insurer might employ.

3. Street parking may be the norm

It's not a given that people who live in the suburbs will park their cars in their garages. Homeowners commonly use their garages for storage and leave their cars on the street. But in cities, street parking is often the norm. And that could lead to more incidents of theft. The result? Higher auto insurance premiums.

Prepare for your costs to rise

Keeping a car in a city could cost you more money than anticipated not just in terms of auto insurance, but also, in terms of things like having to pay for parking. So before you make the decision to hang onto your car, run the numbers to make sure having one is still affordable.

If you need a car to get to work every day, then you probably have no choice but to hang onto yours. But if you only need that car for occasional errands or outings, then you may want to see if it's more cost-effective to simply hail a rideshare every time you need a lift and the bus or train won't suffice.

The average cost to own a vehicle is $10,728 a year, according to AAA. If you end up spending $100 a week on rideshares, you might still end up reaping savings compared to the cost of car ownership -- especially if a move to a city causes your auto insurance premiums to skyrocket.

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