Unfortunately most car buyers neglect to factor in how much the cost of insurance coverage will add to their next car purchase. In reality, it would behoove car shoppers to know that auto insurance makes up for more than 10% of the ownership costs of a new car over the first 60 months. And according to insurance experts, the make and model of the car you buy is a huge contributing factor to how much your insurance will cost.
Which Types of Cars are Most and Least Expensive to Insure?
There are some general rules of thumb to help you decide which cars will give you lowest insurance rates. Historically, wagons, vans, and affordable four-door sedans offer the lowest insurance rates, while cars on the high end of the horsepower and performance spectrum cost a lot more to get covered. That’s because sports cars tend to get into more crashes than regular cars, and this may well have to do with the different habits by which they are driven. For instance, many sports cars are not “daily drivers.” Rather, they are taken out of the garage on the weekend for a romp in the twisties. Although this kind of performance driving is nearly an American tradition, it leads to more accidents, and higher rates of collision lead to higher insurance rates.
But what’s more commonly seen on American roads than these high-performance vehicles are luxury cars, many of which cost more than $75,000. Many of these will exact close to $3000 per year from your bank account just for insurance coverage. This is based on a 40-year-old male driver.
Other Contributing Factors
You might have thought that your credit history was only important when it came to getting approved for car loans, but your credit actually has an effect on determining what insurance rates you’ll pay. Besides your credit, the location where you will be driving the car, your driving record, how long your commute is, and the health and age of both the car and the driver will affect insurance rates.
In general, if you want absolute lowest insurance rates possible, go with an affordable sedan, wagon, or minivan. The Mazda Tribute, a near twin to the Ford Escape and Mercury Mariner, is currently one of the most affordable vehicles to insure. Additionally, you can try to decrease vehicle costs but finding 0% APR car deals that will effectively eliminate finance fees over the course of ownership.