Car insurance: These factors affect the price drivers pay

Yahoo Finance Live’s Rachelle Akuffo breaks down the chart of the day, illustrating how driving history, credit score, and drivers on a single insurance plan can affect the cost of car insurance premiums.

Video Transcript

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RACHELLE AKUFFO: All right. Time now for our chart of the day. And we're looking at the rising cost of car insurance. According to bankrate.com, Americans pay an average of $2,014 per year. Meaning, they spend 2.93% of their income on car insurance prices.

And these only grow. Now, the rate you pay for car insurance varies, of course, based on your personal rating factors. Your own driving history can lead to the cost reaching over $3,000 a year. Now, drivers also see the price go up based on their credit score, as those with lower credit scores are statistically more likely to file claims, which, of course, then leads to higher rates. And, of course, adding any teenagers, your favorite drivers to your account, that's also going to boost the price as the increased risk generally comes with an increase in premium.

And what about the type of car? That's also being added. That will impact the price you pay. Vehicles that costs more to repair or replace will also cost more to insure.