Shiny Sports Car Or Cheap Sedan: How Your Car affects Your Premiums


Shiny Sports Car or Cheap Sedan?

When it comes to auto insurance, a lot rides on the make, model and age of your car. Some cars are just more expensive to insure. The formula for determining the cost is based on a host of variables. Your car may rate well for being new, for example, but also rate low in terms of safety.

Typical Variables

Insurance carriers use a variety of standards when calculating how much a policy will cost. Basically, they improve their odds of having to put a lot of money into your car. Variables can be specific to your state as well as the company you insure through, but there is a basic set of criteria to consider.

  • Model – A sports car that encourages a driver to speed will cost more to insure than a sedan.
  • Cost of the vehicle – Generally, the less valuable a car, the less you’ll pay for coverage.
  • Average cost of repairs – Expensive cars will be more costly to repair.
  • Safety – The safety record of a model means occupants are more or less likely to be injured in an accident.
  • Potential for damaging another car and its occupants – This is a twist on the safety factor that considers whether the model is likely to do more damage to another vehicle and its occupants.
  • Theft susceptibility – According to the most stolen car in 2013 was a used Honda accord. Things like a car’s popularity, the re-sale value of parts and how easy the car is to hot-wire makes a difference to carriers.

Safety Ratings and Discounts

Carriers implement annual auto insurance ratings based on makes and models. These usually look at indexes such as:

  • Collision damage
  • Damage and theft
  • Safety
  • Liability

Together, these statistical indicators affect the cost of a particular premium; good scores can mean discounts, depending on carrier and the state you are in. Some insurers provide interactive tools to show you how well your car does on the indexes used. The Insurance Institute for High Safety Highway Loss Data Institute allows you to assess your car in two factors: crashworthiness and crash avoidance and mitigation.

A simple way to determine how your automobile or other vehicle does in ratings, compare premium costs with an interactive Get a Quote tool.   

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