How Insurance Rates Vary by Car Model
If you’re a smart shopper looking for a new car, you’re probably comparing different makes and models to ensure you’re getting the best deal. When budgeting for a new vehicle, it’s important to factor in all expenses, including the cost of car insurance. If you want to save on car insurance, it pays to know which car model is the cheapest to insure. Keep reading to learn how car insurance rates vary by model and what other factors affect the cost of your premiums.
Why Does Car Insurance Change Based on Your Car?
Insurers take numerous factors into consideration when calculating your premium. Car insurance companies typically determine your rate by estimating your vehicle’s risk and the price of potential damage claims. Companies may consider the following vehicle characteristics:
Trim options. Rates usually vary between standard, sport, and luxury vehicles, with luxury vehicles being the most expensive to insure. Since your trim package may influence your premium, it’s important to provide your insurer with your vehicle identification number (VIN) along with all your car’s safety features.
Body type. Your vehicle’s body type affects its size, safety ratings, and repair costs. Common body types include coupes, crossovers, hatchbacks, sedans, SUVs, and trucks. Sports cars and trucks are generally the most expensive to insure, while crossovers and SUVs are generally more affordable.
Retail cost. If you choose comprehensive and collision coverage, your insurer is liable for the cost of repairs if your car gets damaged. To make up for this additional risk, insurers generally charge higher premiums for cars that are likely to be more expensive to repair.
Safety ratings. Cars with high safety ratings can be less expensive to insure as they should reduce the likelihood of an accident.
Cost of parts. High-end car models often include parts made with specialized materials that are more expensive to replace if damaged.
Theft rates. Cars that are statistically more likely to be stolen can cost more to insure.
Other Factors that Impact Your Car Insurance Rate
Your vehicle isn’t the only factor your carrier will consider while calculating your rate: the following factors may also determine the cost of your premiums.
Type of Coverage
The amount of coverage you choose, in addition to the price of your deductible, will affect the cost of your car insurance. Only purchasing the minimum amount of coverage required by your state will keep premiums low, while adding additional coverage options, such as comprehensive and collision coverage, are more expensive.
Location
Where you live is another factor that can influence your rates. Some carriers take your state, city, and zip code into account when calculating your risk. Insurers may look at geo-specific factors such as local crime rates, population density, and crash rates.
Personal Characteristics
Personal traits such as age, marital status, and education are sometimes used to set your rate. Carriers typically look at information from everyone on your policy.
Credit Score
Unless you live in a state that prohibits the use of credit scores while calculating insurance, having a good credit history will likely result in lower rates. Drivers with poor credit histories can pay up to twice as much for insurance as their counterparts with good credit. However, there are ways to improve your credit score and lower your premiums.
Driving and Insurance History
If you have accidents on your driving record from the past few years, you’ll probably be paying more for car insurance than a driver with a clean record. You can keep costs low by looking for a company that caters to high-risk drivers. It’s also important to avoid lapses in insurance to keep your costs down.
Here at The General, we believe that everyone deserves quality insurance at an affordable price. We specialize in high-risk insurance, which means we offer policies to drivers with less-than-perfect credit scores and driving records. Want to learn more? Read some five-star reviews from happy customers or explore more articles about all things insurance on our blog.
