The costs associated with purchasing a vehicle do not end when you pay the dealer. When you own a car, you must pay for gasoline, maintenance and car insurance. The cost of car insurance usually varies based on your driving history, age and the type of car you drive. While certain types of cars lower the cost of your insurance, others will raise it.
Car insurance companies determine the cost of your policy based on the risk of loss on insurance claims for the company. If the type of car you drive is associated with a larger number of expensive insurance claims, insurance companies will charge you a higher premium than it would charge if you were insuring a vehicle with fewer risks.
A car insurance company assesses the risk associated with your vehicle by examining past information about the vehicle and about the type of person that usually drives it. If drivers of the vehicle usually make more claims, the insurance company will assign a higher premium. Cars that are often associated with more claims are usually those driven for pleasure, such as sports cars. Drivers of pleasure vehicles travel faster and may pay less attention to safety regulations. Sports cars also tend to become damaged more easily.
On the other hand, if the insurance company determines that your vehicle type does not usually result in many expensive insurance claims, it may assign a lower premium. For example, minivan drivers typically make fewer insurance claims and thus pay lower insurance premiums. This is because minivan drivers are typically carrying multiple passengers, so they drive more safely. Drivers of minivans also tend to travel less during peak traffic times.
Along with the profile of the driver and the safety of the vehicle, insurance companies also look at the cost of repairing your vehicle when determining your premiums. If repairs made to your vehicle would cost more than repairs made to most other vehicles, it is likely that your insurance premiums will be higher than the premiums associated with those other vehicles. In most cases, the more expensive the vehicle is, the more expensive the cost of repairs will be. For this reason, cars that cost more to purchase also cost more to insure, especially if the car is worth more than $60,000.
Regardless of the vehicle you drive, your age and driving history will also affect the value of your premium. If you are a young or inexperienced driver, your rates will usually be higher than the rate charged to a driver with more years of experience. Likewise, if you have a poor driving history with many insurance claims, your rate will increase.