When it comes to car insurance, many consumers have no idea what insurers look at to come up with the almighty premium amount. But believe it or not, insurers dont pull your auto insurance rates out of thin air.

To help you secure the lowest possible insurance rate, its important to learn about the factors that could be affecting your premiumand how to use those factors to tip the scale in your favor!

Factor #1: Your Driving Record

Its probably no surprise to you that insurers look at your driving record. They do so to gauge or estimate the risk to insure you. But what exactly are they looking for? Insurers will scan your driving record for at-fault accidents, traffic violations and claims made, usually within the last three to five years. If youve received marks against your driving record, you can bet youll be paying more for your auto insurance.

The good news: Marks against your driving record usually fall away in the eyes of your insurer after three years. You can avoid being penalized for a less than stellar driving record by driving as defensively as possible and avoiding filing small claims (such as those for hail damage) and paying for the repairs yourself.

Factor #2: Previous Insurance Coverage

If youre applying for car insurance under a new insurer, your prospective agent will almost certainly look into your previous insurance coverage. He or she will want to know if you paid your premiums on time, how many claims you filed with your old insurer, as well as any other problematic behavior that would increase your risk to insure.

Any red flags in previous insurance coverage will likely result in an increased insurance rate. And unfortunately, if youve not been previously insured, you may pay more car insurance until you establish an insurance history.

The good news: You can avoid these penalties in the future by paying your premiums on time, avoiding filing small claims and maintaining a respectful relationship with your insurers.

Factor #3: Your Credit History

According to a recent study by insurance research firm Conning and Company, 92 percent of the nations 100 top insurers are factoring credit history into auto insurance premiums.

And while insurers are looking directly at credit scores, theyre more interested at how youve used your credit in the past. Insurers will look at the length of your credit history, the amount of revolving debt you have and any collections or late payments to form an insurance score.

And while critics and consumers alike accuse insurers of using credit-based scoring as an excuse to inflate auto rates, theres a surprising amount of statistics to back the use of insurance scoring. In fact, studies have found that consumers at the bottom of the credit pool file 40 percent more claims that consumers with good credit. Insurers also use your credit history to judge the likelihood of paying your premiums on time. Its for these and other reasons that insurance scoring is most likely here to stay.

The good news: You can improve your insurance score by paying your bills on time, paying down high existing balances (such as those on credit cards), and having your car insurance premium automatically withdrawn from your account every month.

Bonus tip: Insurers tend to grant discounts for customers with automatic bill pay!

Factor #4: Geographic Location

Can insurers charge you more because of where you live?

Yes.

Statistically speaking, metropolitan areas see greater incidents of car accidents, theft and vandalism. These factors increase the risk that an insurer takes to cover you. Thus, if you live in the city, you may pay more for car insurance than if you lived in a more rural area or suburb.

The good news: While your premiums may go up in urban areas, you can score discounts if your car is kept under a carport, garage or parking structure. Make sure your agent knows of these safety measuresincluding any electronic theft deterrents in your car.

Factor #5: The Car in Question

It comes as a surprise to most that a brand new car often costs more to insure than one thats been around the block a few times.

How is this possible?

With all airbags and anti-theft devices in new cars, youd think your premium would go down. But the fact of the matter is that newer cars can be more expensive to repair and replacewhich will increase the amount you pay to cover the car.

The good news: Dont discount discounts! If your car has multiple air bags and other safety features, make sure your agent is aware of all of them. And you can avoid premium surprises in the future by getting an estimate on your insurance before buying that luxury coupe.

Factor #6: Use of the Car

Believe it or not, your insurer cares how much you use your car and what you use it for. While this may seem relatively unimportant, to an insurer, the more youre on the road, the greater your chances of getting into an accidentwhich translates to an increased risk for the insurer.

The good news: Okay, theres not much you can do about this one. Living closer to work should save you a couple bucks, but if thats not an option (and sometimes it isnt), make up for any rate increase by asking about additional discounts, cash incentives and rebates. Chances are good that your insurer wont bump your premium up much for this anyway.

An Educated Consumer is a Powerful Consumer!

While the final decision about car insurance rates ultimately lies in the hands of the insurer, using the tips above can help tilt the scales in favor of the consumer.

So get your cheapest car insurance premiums by educating yourself on the factors mentioned above. And remember, different insurers may use these factors in varying fashionsso shop around and obtain multiple quotes to find the cheap auto insurance you need!