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Changing To A More Fuel Efficient Car Could Boost Your Car Insurance

With the country still in the midst of the worst recession in history, more and more people are finding it necessary to cut expenses to the bone. For some this meant exchanging that large gas guzzling car for a smaller car that was more fuel efficient. Imagine their surprise when they discovered that every penny they had saved in gas was going to pay higher car insurance premiums. That's right by downsizing your car you are actually taking the risk of raising your car insurance. 

The reason is actually quite simple. Insurance companies base insurance premiums on likely it is that you are going to have an accident and if you do how much they are likely to have to pay out towards a claim. Since small cars are usually driven by young people because they are affordable, they are much more likely to be involved in an accident than a larger car. Once a small car is involved in an accident it is more likely to sustain more damage than a larger car and so is the driver. All of these factors increase the likelihood that the insurance company is going to have to pay a claim and they pass some of that risk on to you by charging more to insure that smaller car. 

Luckily for you, insurance companies also consider a number of other factors when they are setting insurance rates. Things such as your age, sex, where you live, whether or not your married, and even how often and what time of day you do most of your driving, as well as your own individual driving record. 

What this means is that if you are between age 55 and 65, have an excellent driving record, live in a small town or a rural community and don't drive during peak traffic times that having a small car may not affect your insurance premiums to any great degree. And if you take advantage of all the discounts available through an insurance company, then you may actually be able to save on your insurance regardless of how small your car is. 

On the other hand if you are a male, 25 years old or young, single, and living in the city, and driving during peak traffic hours then switching to a smaller more fuel efficient car may actually cost you more money than you save. If this is the case then you should check with a variety of insurance companies to see what rates you will end up paying before deciding to trade that large car in for a smaller model. 

Getting the best deal on car insurance these days takes a lot of research and thought on the part of the insured. Knowing what discounts are available and what factors insurance companies base their rates on will help you to make the right decision.