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UPDATED: Mar 13, 2020
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Buying a candy apple red Ferrari Testarosa may be just about the ultimate dream of every red-blooded American boy who has ever wanted a sports car. Paying the car insurance tab for this world-class automobile on the other hand, does not usually occupy a young man’s thoughts.
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Just having the kind of money in the bank to afford to buy a Ferrari is a dream come true for most car enthusiasts. The cost of a new Ferrari model runs between $175,000 and $350,000! Those prices will afford you a marvelous high performance sports car that is more or less suited to highway driving. A Formula One Ferrari racecar on the other hand will set you back a cool $20 million!
Bottom line, once you’ve invested in your new Italian classic Ferrari, you may well have to shell out dollar amounts for insurance that could equal the purchase price of your vehicle. That’s correct! If you spent a couple hundred thousand dollars for the car, the insurance policy alone could cost you an equal amount, each year! Of course, that assumes that you are going to keep your Ferrari on the road and drive it year round as you would a regular car.
Most classic car owners only take their cars out at certain times of the year, during particular seasons or for car shows or other special events.
As an example, in 2009 as reported by the London Daily mail, British tennis star Andy Murray bought as secondhand Ferrari F430 for the equivalent of $160,000 US. At the age of 22 and just having passed his driver’s test, British specialty auto insurers took him to task, charging him the same $160,000 to insure his next-to-new red 196 mph beauty!
The F430, which boasts a 4.3-liter engine, can accelerate from a dead stop to 60 mph in less than four seconds. That’s a lot of power and a lot of sports car for a new young driver. Perhaps by the time Andy reaches middle age and the car is 20 years older, his insurance premiums will drop to say, only $50,000 per year?
Only Available at Specialty Insurers
As for insuring your new Ferrari, to quote financier J.P. Morgan, “If you have to ask, you can’t afford it.” Ferrari is a brand that stands apart from other mass produced automobiles. Primarily because of its racing lineage, Ferrari would qualify for insurance as a specialty vehicle.
To insure a very fast and very expensive car like Ferrari would require the services of a specialty insurer. The traditional car insurance giants like Allstate, Geico et al, would generally have to pass up the opportunity to insure a vehicle whose top speeds reach or exceed 200 miles per hour!
That’s not to say that an older and tamer Ferrari, such as a 1980’s model that might only fetch $60,000 or $80,000 on the open market, can’t be insured for a mere $5,000 or $6,000. Of course, rating and pricing any auto insurance product would depend in part on who is driving and how often the car will be driven.
Insurance for More Standard Luxury Vehicles
For those motorists with cash in their pockets, but more mundane tastes in road worthy vehicles, Forbes magazine listed its top ten most expensive vehicles to insure. This group of cars has a price range of between $80,000 and $135,000.Of course, if you have the means to buy a $100,000 car, you may not care that the insurance cost can be as much as 20% of the car’s value, and in some cases, that price could double for the top ranked models. The top five cars on the Forbes list all come from Mercedes and BMW followed by entries from two more German automakers, Porsche and Audi.
Only one American made car made Forbes’ top ten list, the Cadillac XLR, while two British automobile manufacturers were represented, Jaguar and Range Rover. The Rover in tenth place will cost about $16,000 to insure each year.
Number one on the Forbes top ten list is the Mercedes SL and S class sedans with an average sticker price of $128,000 and costing an estimated $20,942 to $22,536 to insure. The highest priced BMW sedan, the souped up Alpina B7 is next with a sticker price of $115,000 and an insurance cost of $20,100.
The BMW M5 and M6 models follow with annual insurance costs of between $16,000 and $18,000 per year. Next come the Audi S8 and A8 sedans, both costing more than $17,000 per year to insure. The Cadillac XLR comes in at number seven on the Forbes list with a price tag of $88,000 and an annual insurance cost of $16,973.
The classic $90,000 Porsche 911 is eighth on the list at $16,955. The Jaguar XK models cost just over $16,000 to insure, while the Land Rover Range Rover, one of only two SUV models to make the list will also cost its owner a little more than $16,000 per year to insure.
Most consumers know that car insurance rates will vary widely across the United States. According to a study recently published by CBS News, the cost of insuring an average car in the United States ranges between $889 in Maine, and $2,536 in Louisiana, almost three times as much!
In three other states, Oklahoma, Michigan, and West Virginia, motorists will pay in excess of $2,000 to insure their cars. Washington, DC is the fifth most expensive area in the country for car insurance, averaging $1,866 per year.
At the other end of the scale, after Maine, comes Iowa and Wisconsin where car insurance can still be purchased for less than $1,000 per year. Idaho and North Carolina are the first states on the list to break the $1,000 mark, with Idaho coming in at $1,011 and North Carolina tipping the scales at $1,022.
How Insurance Companies Rate Cars
Forbes Magazine discusses factors that help determine insurance rates in the article.
Insurance companies base rates on a number of important factors. The first is the kind of car, the year, make, and model that you drive. After reviewing statistical data, each model car is assigned an indicated risk factor by a group-rating panel. Group ratings allow insurance carriers to set standard premium rates and provide some consistency in the industry.
The next important factor is the cost to repair a damaged vehicle. The more expensive a car is to purchase the more expensive it will be to repair. Foreign cars or older vehicles with hard to find parts will cost more to insure than newer more popular cars.
Specialty vehicles like the Ferrari and other high performance cars, classic automobiles and antiques are also going to be consistently rated as higher risks with correspondingly higher insurance premiums.
As foreign cars and other specialty vehicles can be much more expensive to repair, they can also be problematic from a parts standpoint. Specialty cars with parts that are expensive and hard to replace will have higher insurance rates. Adjusters know that these cars will spend more time in the service bay waiting for parts, and will be more expensive to fix in general.
Cars that have high safety ratings will be cheaper to insure than less safer vehicles.
Insurance rates can be expected to drop for vehicles with factory-installed safety equipment such as anti-lock brakes and additional side and rear airbags. Anti-theft devices will help protect your vehicle as well as reduce the cost of your insurance.
Cars for the Rest of Us
MSN Autos publishes a survey each year on the average insurance costs for typical family cars on the highways and byways of America today. The five least expensive cars to insure for 2012 include two minivans, two SUVs, and one utility pickup truck. The best insurance value on the market for 2012 is the Toyota Sienna LE minivan that will cost an average driver $1,111 to insure. Its mate, the basic Sienna model will cost just $3 more or $1,114 per year.
Next on the MSN survey are two Jeep SUV models, the Patriot Sport at $1,116 and the Compass Sport at $1,118. Finally, we find one of America’s favorite vehicles, the GMC Sierra K1500 pickup truck rated at just $1,121 for a year’s worth of insurance.
The last important factor taken into consideration when rating your vehicle is the size of the engine and performance. Bigger engines present a higher risk as does increased performance, which brings us back to Ferrari, one of the absolutely most powerful vehicles on the road.
Car thieves also often target expensive, high performance cars like the Ferrari. Anyone who has ever watched the Fast and the Furious film series can attest to this. If you can afford to buy and maintain a Ferrari enjoy it, but don’t expect your insurance premiums to come down any time soon.
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