When you start shopping for auto insurance for a newly purchased vehicle, you will quickly discover that insurance companies are very interested in what kind of vehicle you bought. Make, model, year â€“ itâ€™s all considered important information because it can be a major factor in determining your premium.
Mostly, insurance companies tend to consider a vehicleâ€™s brand, utility, and market price when determining an insurance premium. Brand-wise, European model cars almost always cost more to insure. Meanwhile, American and Japanese vehicles are typically insured at lower rates. In terms of utility, mini-vans and family cars are less expensive to insure than sports cars or hot rods. A colloquial rule of thumb is that, the more cylinders the engine has, the more expensive it is to insure. And then of course, the more expensive the car is, the more it tends to cost in insurance, because damage and repair costs are often reflective of the carâ€™s value.
In addition, these are not the only factors that come into play when determining insurance premiums.Â Whether or not a vehicle is a common target of theft can determine how expensive it is to insure. This usually applies to older vehicles which lack many security features common to newer vehicles. Demographics can also play a role. Insurance costs can approach luxury car-levels if the model is preferred by young and inexperienced drivers.
Naturally, your own rates may vary based on your personal situation, but it is good to be aware of these factors when shopping for a new car.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.