What makes a vehicle expensive to insure?
It’s probably clear by now that the cost to insure different vehicles can vary greatly, but you may be wondering why. Why are some of the makes and models above higher than the national average, and some are below? What makes a vehicle cheaper or more expensive, on average, to insure?
It all boils down to risk. Car insurance companies calculate premiums based on the risk of claims being filed and the potential severity of those claims. Several factors go into this assessment. For example, a vehicle that costs more to repair or replace will likely have a higher premium, since those features make a claim more expensive. A vehicle with a higher likelihood of accidents, like a sports car, would also likely have a higher premium.
Sometimes, an older, cheaper vehicle without modern safety features can also have high repair costs, which can lead to heftier car insurance rates. On the flip side, some higher-priced cars might have features like automatic braking, which can help avoid or lessen the severity of crashes. Features like those might lower your premium.
Some attributes of a vehicle that can affect the premium are:
- Age: The older the car, the cheaper it might be to insure compared to newer models due to a lower repair or replacement cost. However, older cars also tend to lack updated safety features, which can lower premiums on the cars that have them.
- Size: Bigger, heavier vehicles may be more capable of causing more damage on the road, leading to a higher auto insurance premium.
- Trim level: Upgraded features in a vehicle affect the purchase price and the cost of insurance.
- Safety features: Vehicles with safety features that reduce the risk of an accident, like blind-spot monitors, are often associated with cheaper insurance premiums.
- Security features: Anti-theft systems and other security features can decrease the odds that a vehicle is stolen, which inherently may lower insurance premiums.
- High-end or luxury cars: The overall cost of these vehicles is higher than standard vehicles, so the expensive repair or replacement costs tend to drive up insurance rates.
- Cars with specialty parts: It can be hard to obtain specialty parts to repair an imported or customized car after an accident, so they can be more expensive to insure.
- Vehicles with low safety ratings: These vehicles may be more likely to be involved in accidents, and those accidents may be more severe, leading to a higher claim payout. The higher risk leads to a higher rate.
Car insurance rates are complex, as each company values the above attributes differently. The only way to know how much you’ll pay for a given car is to request and compare quotes from a few companies before purchasing an insurance policy.
