Several factors are involved in insurance rate determination. Because car insurance companies can only profit if they pay less in claims settlements than they earn in premiums, insurers base their premiums on the likelihood of an accident and the expense of repairing the vehicle. A driver with a previous history of accidents or traffic violations may pay higher rates as he is a high-risk driver. People who live in cities also pay higher premiums than those who live in the country, as congested city traffic can cause accidents. People whose driving history have created high premiums may choose to drive a car that’s less expensive to insure in order to offset the cost of premiums.

What Determines Car Insurance Rates?

Generally, two factors are considered when determining how expensive a car would be to insure: how safe is the car, and how much does it cost to repair? A vehicle’s safety ratings can play a valuable role in saving money on car insurance. A vehicle that sustains very little damage in a car accident will be easier to repair, and cars that have extra safety features installed will be less likely to get into an accident.

For example, cars with backup sensors may be cheaper to insure than those without this technology. Also, vehicles with anti-theft devices installed will be less expensive to insure. You can reduce the cost of your car insurance somewhat by installing such safety devices into your car.

The type of vehicle itself plays an even greater role in its insurance cost. When an insurance company provides coverage, it agrees to replace the vehicle if it is damaged beyond repair. If a vehicle will be very expensive to replace, the premiums to insure it will be higher. Similarly, if a vehicle is expensive to repair due to difficult labor or imported parts, the insurance will be higher than for a car that is cheaper to repair.

What Cars Are Most Expensive to Insure?

In many cases, the most expensive vehicles to repair are also the smallest. Luxury vehicles like BMW, Mercedes and Lexus will cost more to repair or replace than a less expensive car. Sports cars are also very expensive to insure, both because they are expensive and because they may be perceived as more dangerous due to their speed.

Large vehicles can also be expensive to insure. Hummers and Land Rovers are both expensive, as are the luxury equivalents of SUVs such as the Cadillac Escalade. Many large vehicles also have poor safety ratings; SUVs are more likely to have rollover accidents, for example, because they are so top-heavy.

Foreign cars may also be slightly more expensive to insure than their domestic counterparts. Many body shops may not be equipped to deal with foreign cars, and importing parts can be very expensive. Additionally, new cars are more expensive to repair than those that are older. Not only have old cars depreciated in value, they also have less complex technology than newer vehicles that incorporate computer systems to control the vehicle.

Any after-market additions to your vehicle will also cause its value to rise, causing your car insurance rates to increase as a result. While custom rims and an excellent sound system may make the vehicle more posh, they also cause rate increases and the additions may not even be covered by your insurance. Be sure to ask your car insurance company whether any after-market improvements are covered by the policy before adding these features to your car.

Overall, the size of a vehicle has much less bearing on its cost to insure than how expensive it is to buy and how costly it would be to repair. If you want to keep your insurance costs down, you should focus on a vehicle that is safe and affordable. Domestic cars, or those with easy-to-find parts, are the least expensive cars to repair. You can also save more money on your car insurance by installing safety devices and anti-theft devices.

When determining your car insurance rates, remember that there is not only one factor that decides how much your insurance premium will cost. Even if you drive a vehicle that is more expensive to insure, your rates may remain low due to your driving record, credit score, and dozens of other factors. Whenever you receive a quote, see if the insurance company will advise you about any ways you can lower your rates; they will be very willing to work with you to obtain affordable car insurance.