How Your Car Type Affects Auto Insurance Rates

Anyone thinking of heading to their local car dealership and trading in their current car for a newer vehicle should realize that one of the biggest factors affecting the price they pay to carry auto insurance as required by their state is the type of vehicle they are driving. Many people who boldly purchase the car of their dreams are often shocked to discover that their car insurance premiums often increase because of the type of car they’ve selected. It’s a great feeling to buy the car of your dreams, but equally important to your pocketbook to understand just how your choice of a specific car model will influence whether your insurance premiums are really within your budget or become a monthly burden.

Sensible or Extravagant

Car type and Auto Insurance RatesA moderately priced older car that is pre-owned is usually less expensive to ensure than a brand new luxury vehicle or sports car with an expensive price tag. But the fact that a vehicle is new or used doesn’t impact insurance rates as much as its popularity rating for theft as well as the expense involved in repairing it. Auto insurance companies based their premiums on statistical research showing how likely a specific make and model of vehicle is to be vandalized or stolen in addition to how expensive a particular car type is to repair following an accident. It’s a smart idea to talk with your insurance agent about the specific type of car you have your heart set on before signing those sales papers to find out whether your choice, large or small, new or pre-owned, may actually be in a higher risk category that causes the rates to insure it to be more expensive.

Horsepower Matters

Auto insurers also consider the size and power of the car’s engine in determining whether premiums are on the lower or higher end of the scale, as cars with more powerful engines built for speed are more likely to be driven in a manner that engages an accident. Inexpensive cars that have been customized to perform faster will also cost more to insure. Smaller cars such as compacts tend to be less expensive to insure than large vehicles such as SUVs because they cause less damage in a collision. But some larger vehicles such as mini-vans are actually more economical to ensure because of their safety track record.

Crash Test Performance

Hopefully, a driver will never have to find out in person just how the vehicle they are driving performs in a crash. But the insurance company looks at official crash test ratings done under laboratory conditions to determine how to base the insurance premium for specific models. Cars that perform poorly no matter their list price, size or age, pose a bigger risk to insurance companies who then compensate by charging higher premiums. Refrain from investing in a new vehicle until you can find out its safety rating and how that number will impact what you pay for auto insurance.

Theft Statistics

Another thing to consider before switching to another car is how the make and model under consideration ranks among the vehicles most subject to theft. Certain cars have become highly desirable for specific parts stolen for black market sales while other cars tend to be easy to steal and in a higher risk category, which translates into higher insurance premiums. The bottom line is, the time to comparison shop for insurance rates on a new or different vehicle than the one you are currently driving is before you finalize the sale so you can determine if your budget can live with your new insurance rates.