Calculating the cost of your car insurance depends on a wide variety of factors and not every car insurance company calculates their rates using the same formula. However, almost all car insurance companies use the same factors in deciding how much your auto insurance will cost. The factors used to determine your rates are called your "risk factors."

The way this works is actually quite simple. When you request a quote from a car insurance company, you must fill out a form asking several questions including everything from your basic information - date of birth, geographical location, make and model of your vehicle - to more detailed information - what types of traffic tickets you've received and when you received them, number of claims made on your last policy and mileage of your vehicle. It is important that you answer these questions as truthfully as possible so you will receive accurate quotes.

Each piece of information, or risk factor, affects your rates in some way. All of your risk factors together will determine the cost of your car insurance quote. Most factors will change over time, and thus your rates will fluctuate over the course of your lifetime.

For example, younger drivers, under age 25, are considered to be less experienced and thus generally pay higher rates. Once you reach age 25 then you are considered to be an experienced driver and, as long as you maintain a good driving record, your rates will likely decrease quite a bit.

As long as you maintain a good driving record, your rates will continue to drop. In other words, if you avoid speeding tickets and accidents, you will become less of a risk for insurance companies and they will reward you. Many insurance companies even have coverage wherein going for a certain period of time without an accident will earn you a "get out of jail free card" that saves you from a rate increase if you do have an accident.

One factor that affects your rates that may seem odd is your gender. Although this is not a factor you can control, it still affects your rates. This is because, statistically speaking, males are more likely to cause an accident than females due to aggressive driving or unnecessary risks. Thus, males under 25 usually have the highest premiums. However, this does not mean that a male who is a safe driver will pay higher premiums than a female with a poor driving record.

There are some other factors that affect cost as well, such as being a good student, driving less, owning a safer vehicle and installing additional safety or anti-theft features to your automobile. Some cars are consider "riskier" than others because they are stolen more often or are involved in more accidents. For example, a sports car is more expensive to insure than a minivan. However, your safety on the road is still the most important factor, so be sure to drive within the speed limit and pay attention to others.

Obtaining car insurance is something that is extremely important to do before you even drive your new car off the lot. Almost every state requires that drivers obtain some sort of coverage and, even if they do not they usually require that drivers pay an uninsured motorist fee of some sort. Even if your state does not require car insurance, it is still highly recommended. Not purchasing auto insurance can result in all sorts of expensive scenarios. In other words, no matter how much automobile insurance costs, you should find a way to fit it into your budget.