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I'd always dreamed of driving an SUV, a sleek, black 4x4 with runners and navigation. I saved my down payment, and I trekked down to the local dealership. I knew I could afford the payments for a newer model, and I knew what kind of interest rate I'd be eligible for, because my credit score was pretty good. What I failed to calculate was my insurance payment. At the time, I had no idea that the make, model, year, and even the color of the vehicle I chose could effect my insurance payments.

I made it to the dealership, and the SUV I thought I could afford was a little more than I wanted to pay. They had an older model that I could afford, but I thought I'd take a look at a sedan as well. I was between a 2009 sedan and a 2006 SUV. I chose the sedan. Though happy with my choice, I wasn't very happy when I found out I would have lowered my insurance payment with the SUV. I figured the sedan would be less because it was a newer vehicle, had better safety features and, well, it was a car instead of an SUV. I tried multiple insurance agencies and ended up with the same result. For the same coverage, I would have paid about $78 monthly for the SUV, but instead, I was paying $113 for the sedan. Now let's say I was looking at the same vehicles, but this time, the same year. In this case, I'd pay more for the SUV – an increase of about $60 per month.

This is not the only factor that affects the amount you shell out for insurance, however. Most of the time, it's advantageous to save up six months' worth of payments. Insurance companies will give you a monthly quote, and a "paid in full" quote. If you pay in full, you'll nearly always save some money. For example for that sedan of mine, I was quoted $88.66 per month for six months. If I chose the "pay in full option," my total cost would have been $453.82, a savings of $83.01. Other factors (while potentially uncontrollable depending on where you are in life when you buy that car) like marital status and occupation can affect your insurance premiums as well.

When shopping for a car, don't forget to do your research on the insurance. If you want to stick with a budget, it's best to get quotes from multiple companies, and consider factors like make and model before choosing a vehicle. That hybrid might start looking better and better.

Photo by Patrick Nouhailler via cc