Personal information like your driving record and credit history are used to calculate your auto insurance premium, as will your car’s parking location. Additionally, all insurance companies will also consider the vehicle being insured, so rates will vary from one car to another—some will cost more to insure than others.
There are many reasons for this, including:
The value of the car
If anything happens to your car, your insurance company will be liable for compensating you for its value, so the price of your vehicle will affect your premium. Generally speaking, exotic, luxury, and classic cars have higher value, so they will have higher premiums. Cheaper vehicles tend to have lower insurance rates. However, the car’s retail price is not the only factor an insurance company will consider. This means a cheaper or more common car can cost more to insure, so keep this in mind.
Some cars are more expensive to repair than others because of horsepower, turbos and the availability of replacement parts. An insurance company will monitor and research repair costs; if the price of labour and materials rises, your insurance rates will also increase. If, for example, there are very few replacement parts, the insurer will need to compensate for this scarcity, so your premium will be higher.
Risk factors will also be assessed, as will liability, so cars with high theft rates will be more expensive to insure as it is more likely for the vehicle to be involved in a claim.
Engine size and power. Big and powerful engines are more expensive to insure, and they are also more expensive to repair, so you will face higher premiums.
Many factors will be considered when determining your insurance premium, and the make and model of your car will definitely play a factor in the rate you receive. Some vehicles will be more expensive to insure than others, although it’s important to note that a less expensive car may not necessarily be less expensive to insure. So while value does matter, it is not the only factor that insurance companies look at, and repair costs and theft rates will also be factored into their calculation.
The combination of these aspects will determine the price of your auto insurance premium, so knowing why some vehicles are more expensive will help you make informed decisions on selecting a vehicle. You will better understand the rate you receive from your insurance company.
If you have any questions regarding your car and require auto insurance, the experts at Leibel Insurance can help. We will ensure you have the best coverage for your needs, so contact us today for more information!