UPDATED: Feb 25, 2020
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As you contemplate your next automobile purchase, you may want to keep in mind the insurance cost. In fact, you may have a little extra money in your wallet for the car payments if you have a higher education and desirable occupation; but not only for the obvious reasons.
While most auto insurance companies base rates on factors such as vehicle type, driving record, annual mileage and residency, many are now factoring the insured’s education level and occupation into their underwriting equations. The insurance companies claim these factors are actuarially predictive of loss, and it is this type of information that allows competitive pricing for all drivers.
According to the Insurance Information Institute (I.I.I.), the average driver in the U.S. will pay less for auto insurance in 2007 than in 2006. This is the first such drop in eight years.
So while you ruminate whether to buy the Mercedes or the Honda, remember your insurance premiums may be partly influenced by the type of letters you have following your name.