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UPDATED: Mar 13, 2020
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If you are planning to buy a car, you have probably considered factors such as:
- Fuel economy
What most people tend to overlook is the cost of insurance, and if you haven’t pondered over auto insurance costs, you are missing out on a crucial aspect of the total cost of owning that car.
There are many factors affecting the cost of insuring a car, including your age, driving record, where you live, etc.
One often overlooked factor that significantly affects the cost of insuring a car is its price. The pricier the vehicle, the more expensive it is to insure and vice versa. That, however, should not discourage you from buying an expensive car if you can afford it.
With auto insurance, you can always go online and compare quotes from various providers to obtain the right coverage at an affordable price.
Looking to at least save on auto insurance? Enter your ZIP code above and compare at least three to four policies today!
Why are high-end vehicles more expensive to insure?
Walking into a showroom and exiting behind the wheel of a luxury car has to be one of the most exciting things ever, even if you are not a car enthusiast.
There’s just something about driving a high-end vehicle that makes you feel good about yourself. A lot of engineering goes into the manufacture of high-end vehicles, which explains their exorbitant price tags.
But why exactly are high-end vehicles more expensive to insure?
Facts that Affect High-End Car Insurance Rates
Repair or Replacement Cost
We’ll start with the obvious factor here — the cost of repairing or replacing a car after is damaged in an accident. The most expensive cars are the high-end models.
The value of your car plays a huge part in the calculation of premiums.
The more expensive a car is, the higher the cost of repairing it as well as the price of purchasing spare parts.
What if your car is totaled in an accident? How much would it cost the insurance company to replace it? Foreign models, particularly, are costly to repair or replace.
Drivers can save $859/yr* by comparing car insurance
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With the sole exception of sports cars, other high-end vehicles tend to be larger than mid-range vehicles.
The larger a vehicle, the more powerful it is. If you are involved in a car crash, your vehicle — due to its size and weight — will cause more damage to the other car.
If the accident is determined to be your fault, then the insurer will have to pay more for the damages inflicted by your vehicle.
When it comes to auto insurance costs, the size factor applies both ways.
Smaller expensive vehicles such as sports cars or classics offer maneuverability hence a higher likelihood of reckless driving. Additionally, according to statistics, younger drivers tend to cause more accidents when driving smaller, sportier cars.
Most high-end autos come with bigger engines and more horsepower. Auto insurance is based on risk.
Insurance providers view drivers with high-powered engines as more likely to speed and, therefore, more likely to be involved in a collision.
The impact of the size of the engine can be seen in the difference in the cost of insuring certain varieties of the same model but with different engines.
Additionally, high-end vehicles need to have comprehensive coverage added to the policy. About one-third of the cost of comprehensive coverage on your policy goes towards the payment of auto theft claims.
Expensive Cars Need Additional Coverage
With a standard car, some coverage options such as a comprehensive policy are not necessary. That’s not the case with high-end vehicles. You need to additional coverage to provide the extra coverage your car needs thus driving auto insurance costs a notch higher.
Here are some of the coverage options you might have to add to your auto insurance policy even though you wouldn’t ordinarily need them if you had a cheaper car:
- Collision Coverage — Pays for crash-related damages even if your car is fully paid for (not refinanced or a lease for that matter)
- Comprehensive Coverage — Prevents loss from theft (high-end models are juicy targets for auto thieves) and also protects you against losses of fire, vandalism, and natural disasters
- Uninsured/Underinsured Motorist Protection — In the event that someone hits your car and drives off (hit and run)
- Higher Liability Coverage Limit — High-end vehicles are bigger and more powerful and are more likely to cause more damage to other cars in the event of an accident
Insuring a luxury or high-end vehicle is an expensive affair. You need to be sure that you can afford it before you purchase the vehicle.
However, there are ways to cut these costs, not by much, but you can save a considerable amount. For instance, you can install anti-theft devices in your car to reduce the likelihood of theft.
Most importantly, compare quotes from numerous providers before you purchase a policy. Comparison shopping will increase your chances of scoring a better, more affordable auto insurance deal.
Start comparison shopping today for better and more affordable auto insurance by entering your ZIP code below!