stern man with clipboard in front of wrecked car and exasperated woman

Three reasons why your car insurance is so expensive

Did you know the average American pays $1,674 a year or about $140 a month on auto insurance?* Your insurance rate depends on a wide range of factors. While you can’t change your age or past driving record, there are some things you can do to lower your insurance rate. Here are three things that might be impacting your auto insurance premium.


  1. Your Car: The make and model of your car is a major contributing factor in how much you’ll pay for insurance. Some cars are cheaper to insure than others. Insurance companies will charge less to insure safe vehicles, as they’ll pay less for any claims you make. For example, a car with a high safety rating could get you a small discount. Likewise, some types of vehicles are statistically more likely to be stolen, including the Honda Accord and any full-size Ford pickup. Rates for those types of vehicles can be more expensive to insure as a result.
  2. Your Driving: The more traffic violations you have, the higher your insurance. Traffic violations and car accidents can result in a premium increase of upwards of 200%, compared to what you were paying before the incident. Your premium increase will depend on a couple of things: the severity of your violation and whether you’ve been convicted in the past. Typically (though not always) traffic tickets and accidents will drop off of your record in three to four years, allowing your premium to go down again. On the flip side, many insurers offer discounts for good drivers. Going the speed limit can actually save you money!
  3. Your Credit: In most states, insurance companies will charge you more if you have poor credit or no credit history. That’s right, your credit score matters for getting loans, getting an apartment, and getting insurance. A better score can help you get a better rate on your policy. Only three states (California, Massachusetts, and Hawaii) have banned insurance companies from using your credit score to factor into your insurance costs.


Bonus Factor: Your Mileage: The more you drive, the more likely you are to have an accident. If you can cut down your annual drive time you can cut down on your insurance costs, too (not to mention cutting down on emissions). Of course, working from home cuts the commute to nothing. For those of us who put away the home desk, rideshare programs, public transit, biking or walking, and limiting weekend road trips can all make an impact, too.


Here’s how Sierra can help you with auto insurance costs:

  1. Shop around! Sierra offers members auto and home insurance, GAP Advantage, and Mechanical Breakdown coverage.
  2. Improve your credit score! CONTACT US for a free credit review. Not only could you save money on your insurance, but you could reduce the interest you’re paying on loans and credit cards you have!