Do Luxury Cars Cost More to Insure?
Buying a luxury car is certainly expensive. You’ll find that some of them are manufactured with some of the most high-end products around, including state-of-the-art steel products to ensure durability and longevity.
That being said, does the type of luxury car that you have play a critical role in the amount of insurance premium that you’ll be paying on a monthly basis? Perhaps this is a question that’s been nagging you, as you ponder on whether or not you should purchase a particular luxury car.
Keeping this in mind, here are some of the factors focusing on your car that will determine the amount of insurance premium that you’ll be paying.
Size of Your Car
The size of your car is a matter of interest to the insurance company. When you have a small car, it means that it is highly maneuverable. Hence, an insurance provider will see this as a high-risk insurance because individuals with maneuverable cars tend to be me open to risk-taking.
In fact, statistics show that young drivers who have recently received their licenses tend to purchase sports cars of smaller stature. Indeed, they have the higher accident rates, and hence, insurance companies charge them with a higher insurance premium.
That being said, larger cars can also have higher insurance premiums. This is because they are more susceptible to damage because of their size.
In fact, mid-sized vehicles such as sedans are usually the least expensive to insure!
The higher the value of the car, the more expensive it is to insure. Bear in mind that this has nothing to do with the cost of the car, rather, the cost of repair and replacement. That’s because high-end/luxury cars normally have expensive parts due to the level of durability and pricing of their parts.
So for your insurance company to be able to cover such costs, it needs to raise its premiums on such cars to ensure that replacement is possible especially if the car is totally wrecked.
If your car is packing quite a punch in the motor department, so that it comes with a massive engine holding a lot of horsepower, chances are high that you will be driving at higher speeds than ordinary drivers.
In turn, this makes you susceptible to accidents, injuries, or vehicle damage. To be on the safe side, the insurance company will make you pay higher insurance premiums.
It’s not a given that all drivers will need to get comprehensive car insurance, but for those who are cautious of theft, they can purchase it.
In fact, if you are looking to purchase an exotic car, then it might just be necessary. That’s because luxury cars are more susceptible to be stolen due to the rarity of finding their parts.
That being said, because of the high rate of theft, your car insurance can be much higher.
As a matter of fact, the Insurance Information Institute shows that at least one-third of most car insurance covers are inclusive of claims of theft.
Additionally, there are other factors not involving the car that determine how much insurance you are bound to pay. These are as follows:
Your age plays an important role in determining the amount of insurance premium that you will pay. It is a common conception that the older an individual is, the less reckless they are with their car.
Hence, car owners under the age of 25 will most likely be charged higher insurance premiums than those who are 40+ years.
Your Credit History
Insurance companies use an individual’s credit history to determine the amount of insurance premium that an individual should pay. Generally, a person that has a great credit history will most likely have a lower insurance premium as compared to an individual with a high credit history.
Your Driving Record
Drivers who have a history of accidents, crashes and motor injuries will no doubt have to pay higher insurance premiums because they will be seen as a liability.
Hence, individuals with a clean driving record are more likely to pay a lower insurance premium than their contemporaries.
Where You Live
Individuals that reside in urban areas will have higher insurance premiums to pay because they are more susceptible to incidences of crashes, theft, and vandalism. Individuals in rural areas will pay less.
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