Being bogged down with credit card debt can be a financial strain, especially if you see one of your other expenses increase.One area that could end up costing you more money for a variety of reasons is auto insurance.
- Credit score –Although you may not think your credit score can affect your auto insurance premiums, a poor score could lead to higher rates. Generally, providers will check your credit score before giving you a policy. If they find that this number is less than stellar, you may be viewed as a higher risk. To compensate for this, auto insurance companies will likely raise your premium
- Car’s horsepower – Certain factors of your car could also lead to higher rates, including its horsepower. For example, a vehicle with a four-cylinder engine that has moderate horsepower would be cheaper to insure than one with a six- or eight-cylinder engine and higher horsepower. Before purchasing a vehicle, it may be smart to check the horsepower and get an insurance quote.
- Driving more – If you suddenly begin to drive more than you did in the past you could see your insurance rate rise. By being on the road longer, you are a greater risk to the insurance company. More time on the road means a greater chance that you’ll be involved in an incident that results in a claim, which could lead to a hike in your insurance premium.
- Where you live – Simply where you live can make your insurance costs go up. For example, if you reside in an area that has a history of claims, you are seen as a greater risk to your provider. This could be for any number of reasons, including a high volume of accidents or thefts.
- Turning 50 – As you age, insurance companies may see you as more of a risk. That said, when you turn 50, you may see your car insurance premiums increase. However, this isn’t a practice of every insurance company but some do raise rates for older people.
When you have a significant amount of credit card debt, it is important that you have as much money as possible to put toward paying it down. Making sure your auto insurance premium doesn’t increase during this time is one way to avoid a bigger problem.