Auto insurance premiums are calculated using many different factors. In addition to your personal information (driving record, credit history, etc.) and the garaging location of a vehicle, insurance companies also look at the particular vehicle being insured,..and rates can vary dramatically from one car to another. You may have wondered why some cars are more expensive to insure than others. Here are some of the reasons.
The Value of the Car
Should anything happen to your car, insurance companies will be liable for compensating you for its value. Thus, the value of the car can affect the price. However, it is important to note that price is not the sole factor.
Some vehicles are more expensive to repair than others. This is often related to horsepower, unique features such as turbos, and/or the availability of replacement parts. Insurance companies also monitor national trends in repair costs (which can apply overall or be specific to specific makes and models). As prices increase due to the cost of labor, materials, inflation, etc., you may find that insurance rates will increase as well.
Insurance companies must assess risk and liability when it comes to cars being insured. Cars with high theft rates are more likely to result in a claim. Therefore, they will also be more expensive to insure.
Summary of Why Some Cars Are More Expensive to Insure Than Others
If monthly expenses are a major factor for you, be sure to request an auto insurance quote before purchasing a new car. A less expensive car to purchase may not necessarily be less expensive to insure since value is not the only factor evaluated by insurance companies. Repair costs and theft rates play an important role, among other things. Understanding why some cars are more expensive to insure than others can help you make better financial decisions when it comes to your auto insurance costs.