Are you buying a new vehicle? If so, you might be interested to know that how the car you choose is rated affects your premium. Most people know their driving record affects their insurance premiums, but many aren’t aware of how much the car they buy affects their rates too. Additionally, there are other things you might not know about how your car impacts your insurance premiums. Here is what to consider when shopping for a new car:
The age of your car directly affects what you pay for insurance premiums. The older the car, the more value it loses. The less valuable a car is the less expensive it costs to replace or repair. This makes it cheaper for your insurance company to insure because the risk of them paying out large sums of money is reduced. It’s important to note that each car starts with a different rate and depreciates at a different rate; the impact varies across different types of vehicles.
Make and Model
The make and model of the car you purchase will also affect your insurance rates. High-end cars are more expensive to insure because of their value. The cost of repairs, parts and the replacement value are pricey for an insurance company, so they charge higher premiums for luxury cars.
The difference between models and even trim levels can greatly affect your insurance premium. For example, a sedan will likely cost less to insure than a coupe, as coupes are sportier and statistically have a higher risk of getting into accidents.
Insurance companies also base rates off theft statistics. These help them figure out which cars are stolen most often. For example, in 2017 the 2015 LEXUS GX460 4DR AWD SUV was the most stolen vehicle in Canada. To see the top ten list of stolen cars you can go here. Some cars make the most-stolen lists consistently, thus insurance premiums are higher for them. Although anti-theft devices can reduce the risk of the car getting stolen and can lower rates, if it’s commonly stolen it will still have a higher premium.
Risk and Value
The value of a car directly affects the optional portions of your car insurance, like collision. Dropping collision can reduce your insurance premium rates, but it’s not a good idea to go without this coverage if you can’t afford to pay to replace the vehicle or cover the cost of damages.
The risk factors of accidents and theft impact a number of areas. Theft statistics impact comprehensive costs and accident statistics impact the cost of liability and accident benefits; it’s important to note that your driving experience and record are considered as well.
At Sadler Insurance we help you with your car insurance needs, and make sure you understand your insurance coverage.