Auto insurance rates are dynamic, and they keep fluctuating now and then. Have you ever wondered why people have to pay different rates for the same car insurance policies? How are some people charged 40%, 50%, or even 100% more for car insurance policies?
Many factors affect your car insurance prices. Some of them are obvious, while some might need clarification from a lot of people. For example, your driving record and your past insurance claim directly affect your car insurance rates, which is understandable.
But then factors like your age, gender, credit score, etc.,t also affect your insurance rates. Why would car insurance companies need to know your gender to calculate your insurance rates?
Between the obvious and the baffling lies car make and model. Your Car’s make and model directly affect your auto insurance rates. In this article, we’ll describe why this factor affects your car insurance prices and what can be done to reduce your insurance rates.
Auto Insurance Rates Calculation
How do car insurance companies calculate rates? While the exact process is lengthy and complicated, we do know how this process works. Insurance companies get vital details about the policyholder and then calculate how much risk the person holds.
Insurers look at your driving record, insurance claims, age, gender, location, credit score, etc., and analyze all the data to determine how likely you are to get in a car accident. The more likely you are to get in an accident, the more chances of the insurer getting an insurance claim.
For example, if you have had a lot of accidents, along with speeding tickets, and let’s throw in a DUI charge, you are not a careful, law-abiding driver. So statistically, you are more likely to make an insurance claim than someone who has never been in a car accident.
So car insurance companies will charge you more to offset the risk while giving great discounts to the person with a clean driving record. It was one of the dozens of factors that insurers consider when determining your rates. So where does Car make and model come in?
Car Make and Model
Let’s say that someone gets in a car accident. Since the person has collision insurance, they claim to get their Car fixed. Consider two scenarios here; in one scenario, the person drives an old Ford Focus.
In this case, the insurance company hardly has to pay anything. The repair cost will be cheaper since the parts are easily available and the labor cost is also low. If the car gets totaled, the actual cash value will also be quite low.
Now let’s consider the second scenario; the person drives a Porsche. It does not matter which Porsche is since all of them are expensive. In this case, the repair costs will be sky-high, the spare parts will be very expensive, and the labor cost will be through the roof.
Porsche is a sports car that costs more to buy and repair. And no matter when you make a claim, a totaled Porsche will always be more expensive to reimburse than a Ford Focus. In simple terms, since auto insurers have to pay more to repair or reimburse expensive cars, they also charge more to insure them.
Expensive foreign-made luxury cars are more expensive to insure than cheap, affordable cars. Small cars, such as most cars made by Ford, Hyundai, Honda, Subaru, etc., are always going to be cheaper to insure than luxury cars from BMW, Porsche, Mercedes-Benz, etc.
Most Stolen Cars
Not just expensive cars, but there are some cars that are preferred by thieves. Perhaps due to more resale value or some vulnerabilities that allow breaking into these cars easily, some car models are stolen more often than others.
So insurance companies charge more to insure these cars since they are more likely to be stolen, and comprehensive insurance covers car theft. For example, Ford F-150, Chevy Silverado, and Honda Accord are the three most stolen cars in the US.
Not just for the probability of theft, but the F-150 is also an expensive car to insure. Ford F-150 has been the most stolen Car in the US for two years in a row! So car insurance companies will charge you more if you own a Ford F-150.
How to Save Money on Auto Insurance
Now that you know how a car’s make and model can affect the insurance rates, let’s look at how you can save money on auto insurance bills. Firstly, you must improve all the other factors affecting your car insurance rates.
So when you drive, follow the traffic rules, avoid rash driving, and keep a clean driving record. It will go a long way in saving you a lot of auto insurance bills.
When you buy an expensive car, know it will also be expensive to insure. It is the only way to go around it. But when it comes to a car’s make and model, you only have to avoid expensive cars that cost more to insure.
Suppose you have already bought an expensive car and are getting close to a heart attack looking at the insurance costs. In that case, the only option is to compare multiple auto insurance companies and select the one that costs the least.
Ensure that you get good coverage, as that matters a lot. For example, if you live in Nevada, look for Nevada cheap car insurance and select the one that offers the best coverage at the lowest price. Once you get the most affordable option, choose it, and you are good to go.
