Peering Into The Black Box Of Car Insurance

Car insurance is regarded by many drivers as something of a necessary evil. Even mention of the word can conjure in some feelings of dread regarding expensive premiums and complicated paperwork. Especially for newer drivers, the process of shopping for, let alone understanding, insurance policies can be daunting. Fortunately, understanding your insurance doesn't have to require planetary alignment and a blood sacrifice. There are a few things you can keep in mind to help you manage costs, or at least understand them.

Who you are is important
When it comes to car insurance, no two applicants are the same. What you end up paying for your monthly premium depends on a whole host of factors, ranging from how old you are to what kind of car you drive. According to Edmunds, drivers looking to shave down their insurance bill as much as possible should start with the car they drive. In general, the more expensive and new your car is, the more it costs to insure, though there are other factors at play. Things such as your car's reliability record, safety rating and even how likely people are to steal it can all affect the final number.

You'll also find yourself under the microscope when shopping for policies. If you tend to drive less frequently, more safely and have fewer traffic citations on your record, you'll find yourself in general paying less than others who may have a more checkered driving history.

You have options
Developing technology has brought with it alternative insurance options for the frugal driver. Policies known as use-based insurance operate by monitoring things such as how far you drive and how quickly, which is tracked through inputs connected to your dashboard and linked to your smartphone via an app. Using this data, insurance companies can assess what kind of driver you are based on how and how much you drive, rather than charging a flat rate. 

This model is currently in the minority, with only around 2 percent of on-road vehicles currently being covered this way. However, use-based insurance is quickly catching on. In fact, Edmunds estimated that over the course of the next five years, roughly 20 percent of active policies will be use-based. 

If you're shopping for a used car, head to NJ State Auto Auction. You'll find hundreds of Carfax-certified cars on the lot, and a knowledgeable in-house finance team on hand to help make your chosen used car, truck or van affordable.