Vehicle History and Its Effect on Auto Insurance Rates (2023)

One of the major things auto insurance companies look at when determining your insurance premiums is your vehicle’s history, most notably:

• Has it been in any accidents? How many?
• How many times has it been in for repairs?

Insurance companies will look at a vehicle history report (looking up each vehicle using its VIN number) to determine the risk of insuring your vehicle, and therefore, the premiums you will pay to insure it. A clean vehicle history report is one of many things that can positively influence your insurance rates. An ugly one, on the other hand, will make your bank account bleed.

Read more: What are auto insurance premiums?

Salvage Titles Could Mean Trouble

On this vehicle history report, you better hope that your vehicle does not have a salvage title. A salvage title is a type of title that notes the vehicle in question has been severely damaged or even deemed to be a total loss by an insurance company (after that insurance company paid a claim on that vehicle). If a vehicle has a salvage title, many insurance companies will refuse to insure it (and in the United States, where auto insurance required by law, having insurance is a must). Other insurance companies will need indisputable proof that the issues noted on the salvage title are fully repaired before agreeing to insure you.

If having a salvage title is not an issue for you, and you are still able to get your car insured, a vehicle history report that shows other minor issues is also something to worry about. Although these will most likely not have a huge effect on your insurance premiums, they could be a bad omen signaling issues in the future. If there are multiple issues appearing, you might want to think twice about purchasing said vehicle.

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Research Used Vehicles Before Buying

Because insurance companies place such an importance on vehicle history, you should always do your research on a used vehicle before purchasing it. By reading vehicle history reports, you are able to know as much about a used vehicle as they have on record. These reports not only show whether or not the car has a salvage title, but it will also include information on accidents, repairs, routine maintenance, and even thefts.

If you are looking to purchase a used car, you probably should make sure some of the more serious issues (such as whether a vehicle as any liens on it, or whether or not it has extreme structural damage) are either fixed or non-existent. These vehicle history reports can also tell you if there are pending issues that still have yet to be fixed; for example, if the vehicle has been recalled by the manufacturer but still has yet to be in for these repairs.

Different Vehicle History Report Agencies

Not all vehicle history reports are created equal, however. You should familiarize yourself with the differences between these reports so you know what you are getting when you purchase them. Let’s take a look at some of the more popular choices:

• National Motor Vehicle Title Information System History Report – These reports, made available by the American Association of Motor Vehicle Administrators tracks titles of vehicles across the United States. They also include information regarding reported problems and service dates.
• CarFax – CarFax is probably the most well-known vehicle history report in the automotive industry. Offering detailed reports for as little as thirty-five dollars, Carfax collects information from over 34,000 sources. It includes title information, service reports, problems reported, and odometer readings. Many used auto dealers offer a free CarFax report whenever you are serious about purchasing a vehicle from them.
• Experian Automotive AutoCheck – Using these reports, you can see whether or not an insurance company declared a vehicle as a “total loss.” This can occur if the vehicle was involved in a fire, was rebuilt, or was issued a salvage title. These reports also include title information as well as other service and repair reports.
• CLUE Report – This report is less of a vehicle history report and more of an insurance history report. It checks a national database of insurance providers to show all claims made against a vehicle. The CLUE Report can show any new insurer about claims filed with a previous insurer.

You should definitely take a look at at least one vehicle history report before purchasing a used vehicle. Most experts recommend running a CarFax report in addition to having a trusted mechanic do a thorough inspection. After all, vehicle history reports aren’t 100% accurate. There are some times when these reports are missing some important information, especially in cases where previous repair work was done off the record books.

To ensure you are getting the best possible auto insurance rates for your vehicle, make sure your vehicle does not have any glaring stains on its vehicle history report. If it’s too late, make sure you get everything repaired until it’s in “like new” form. After your car is in tip-top shape, you can get insurance quotes from a variety of providers to find the best possible price for your “healthy” vehicle. There are many sites, including this one, that offer free auto insurance quotes by vehicle after a brief questionnaire.

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