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How Does Vehicle Type Influence Auto Insurance Payments?

Thursday, February 4, 2021

how vehicle type affects auto insurance

Everyone wants to find ways to lower the cost of car insurance. Most people are aware that insurance companies have a standard list of rules to calculate car insurance for individuals, and understanding how those rules affect your rates may make some of your car buying decisions easier. There are primary reasons you might have higher auto insurance rates than your friends or neighbors, but did you know that the type of car you drive can also cause your rates to go up?

How To Calculate Car Insurance

A quick review of this previous article may help clarify what factors affect your car insurance rates, but here is a shortlist for consideration:

  • Age
  • Credit Score
  • Driving Record, such as traffic tickets
  • Location of Residency
  • Yearly Mileage
  • Vehicle Year, Make, and Model

The most expensive policies are for drivers from age 16 to 25. After age 25, rates start to reduce, and factors like credit history and accidents can make or break the savings of insuring your vehicle. Remember that a DUI/DWI is a long term disaster to your financial future.

How Does Your Choice Of Vehicle Affect Your Rates?

Driving a car with excellent safety ratings is an essential piece of calculating insurance costs. The NHTSA (National Highway Trafic and Safety Administration) publishes their findings each year. When choosing a new car, it will be worth your efforts to research and consider these safety measures as a tool for keeping your insurance costs lower.

The frequency of theft for your preferred car will also make a difference to your policy rates. If thieves statistically target your auto, your car insurance factors will identify as a high risk. Currently, two-door Honda Accords are the reigning king for car theft.

Higher-end sports cars are also going to take more money out of your pocket to purchase insurance. Because sports cars are all about speed, the industry assumes you will receive more traffic tickets and be a higher statistic for car accidents.

Does Location Affect Rates?

In one word: Yes. Some car insurance factors affecting price include where you reside. Urban areas are much more expensive than most rural areas. Density means a higher frequency of accidents, so the price you pay for living and driving in a city will be more costly. Another factor is the weather in your area. If you live in a flood or storm-prone location, the insurance industry has flagged your zip code for high risk.

Are Electric Vehicles More Expensive To Insure?

Electric cars are the auto industry’s future, but many insurance companies have not fully caught up to the idea. Some policy premiums are costlier on electric vehicles than regular fossil fuel autos due to replacement costs. Remember that your Independent Insurance Associates agents look for the most suitable coverage across many insurance organizations to find the best pricing possible. Electric vehicles are more expensive to purchase than their internal combustion engine counterparts pushing insurance costs higher.

Expect these rates to even out in the next few years as the auto industry finally switches to electric car production. At Independent Insurance Associates, our job is to search for the right coverage for your vehicle. Your insurance needs are as individual as you are. Whether you are buying a new car or needing to update your current policies, feel free to contact us for advice and planning for your best cost-saving premiums today.