How Does Car Make and Model Affect Insurance Rates?

Last Updated on October 16, 2021

When you apply for a car insurance policy, there are a variety of different factors that affect your insurance rates. Your car’s make and model are two components of your rates overall. You’ll want to consider how your car’s make and model could affect your rates when shopping for a new vehicle. Here’s how your car’s make and model can impact your insurance rates overall.

How Do Car Insurance Companies Determine Your Rates?

To determine your rates, car insurance companies look at a huge range of factors. While each insurance company has its own formula for calculating rates, they are all trying to determine how much of a financial risk you are.

The more likely you are to file a claim, the more expensive you will be to insure. Insurance companies look at a wide range of statistics to determine how “risky” you will be as a client. Your car’s make and model are an important part of this, as certain types of cars are more likely to be stolen or get into an accident.

Other factors that your car insurance company will consider are your driving history, your age, and where you live. All of these factors can affect how likely you are to make a claim.

Drivers who are riskier to insure will typically pay higher premiums. This offsets the potential cost for the insurance company if you do end up filing a claim. This model also encourages drivers to drive safely in order to keep their claims down.

What Types of Cars Are the Most Expensive to Insure

Certain types of cars are more expensive to insure because they are statistically more likely to get stolen or be involved in accidents. Here are some categories of cars that can come with higher insurance costs.

Luxury Cars and Sports Cars

Pricey luxury cars and sports cars are almost always expensive to insure. This is because they are often targets for theft, particularly if they have a flashy design. Not only are they more likely to get stolen, but they are also very expensive to replace and repair if they are damaged in an accident.

Examples of luxury car makes that are very expensive to insure include Tesla, BMW, Jaguar, and Porsche. The specific model and trim on your car can make things even more expensive in some cases. Additionally, high-performance sports cars come with additional safety risks, which can make insurance even more expensive. Statistically, cars with powerful high-speed engines are more likely to get into dangerous crashes. Although these cars are safe to drive, data indicates that drivers who own these cars are more likely to speed.

If you’re looking to save money on your insurance policy, you can opt for a more affordable car brand with good safety ratings. Makes like Honda, Ford, Subaru, and Jeep are typically much more affordable to insure than luxury sports car brands.

Newer Cars

The newer your car is, the more expensive it is going to be to insure. This is because newer cars have a higher cash value than older cars. If a new car is totaled or damaged, the claim is ultimately going to be more expensive for your insurance company. This is particularly true for cars with expensive new smart technology, because you may have to go to a specialist to get them repaired.

However, newer cars are also more likely to come with helpful safety features. Many insurance companies offer discounts for cars with safety features, as they reduce your chances of getting into an accident on the road.

Small Cars

In some cases, small car models may be more expensive to insure than larger cars. This is because small cars are often faster, and many insurers interpret higher speeds as being higher risk.

Many insurers consider mid-size models to be the safest, and therefore they are often the cheapest to insure. Large SUVs can also come with high insurance premiums because they are very expensive to purchase.

Specialty Trim

Many car manufacturers will offer several different types of trim for the same model car. The standard model will be the least expensive to insure, while specialty trims will come with additional features and be more expensive to insure. This is because cars with an upgraded trim level are worth more money and typically have more added features. This means that if your car is damaged, it will be much more expensive to replace.

How Can I Find an Affordable Car Insurance Policy?

Finding an affordable car insurance policy can be very tricky. Car insurers use very complex formulas to determine your premium costs, and every company has its own unique criteria and formulas. Here are some tips to help you keep your car insurance costs low.

Check Your Car’s Safety Ratings Before You Buy

Many car insurance companies look at the safety ratings for your car when determining your premium costs. Considering these when you buy a car can help you save money on your insurance policy and stay safe on the road. There are a variety of companies that provide safety ratings for cars, but two good places to start are the Highway Loss Data Institute and the Insurance Institute for Highway Safety. Safer cars are almost always going to be cheaper to insure, especially if they come with extra features like backup cameras and anti-theft devices.

Compare Multiple Options

You have a wide range of companies to choose from when it comes to your car insurance. It can be tempting to go with the first company you find, but if you want to get the best deal, you’ll need to get quotes from multiple providers. Because every company calculates its rates differently, your premiums could actually vary widely depending on which provider you choose. If you find yourself overwhelmed while searching for an insurance provider, consider working with an independent insurance agent instead to get the coverage you need.

Your car’s make and model can affect your insurance rates, so it’s important to keep this in mind when shopping for a new car. Flashy luxury vehicles come with a lot of perks, but they also come with a high price tag to insure.