Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 21, 2020

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Here's what you need to know...

  •  In the personal auto insurance industry, rates are not based on value
  • Some cars have a heavy structural design that can lead to severe damage in a moderate accident
  • Every vehicle is equipped with the safety features that are required by law

Instead of locking in on just the sales price or the cash price, you need to consider all of the expenses that are associated with car ownership.

After tallying up all of these costs, you will find out the True Cost of Ownership is before you make a huge financial decision.

Since you take on the responsibility to purchase and maintain continuous insurance when you decide it is time to own a car, it can be helpful to find out how much you can expect to pay in premiums.

Luckily, it is possible to get insurance quotes before you even buy a car so that you can make educated buying choices.

Start comparing car insurance rates now! Enter your zip code above to get started!

Table of Contents

Why does the vehicle model affect the price of insurance?

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If you do not understand how car insurance rates are calculated in this complex marketplace, it might be difficult to understand why buying a Honda compact car could cost you more than buying a Ford sedan.

At first glance, it may seem as if the make or the model of the car would only matter if the vehicle had special features that made it unsafe.

While this is a fair assumption, this is not at all how car insurance rates are calculated.

Here are some of the factors surrounding the vehicle type that can affect rates:

The Value of the Vehicle and the Cost of Repair

Most consumers assume that the sticker price of the vehicle is what dictates its rate. In the personal auto insurance industry, rates are not based on value.

The policyholder will be paid the fair market value of the whenever a damage claim is filed.

Instead of looking at the purchase price of the car or the appraised value in the standard marketplace, the insurer will look at how much the vehicle costs to repair.

If the make or the model of the vehicle has expensive parts or labor charges, your rates for physical damage coverage may be high.

The Age of the Vehicle

You might assume new cars are expensive to cover because of their age, but that is not always the case. The real reason why the costs tend to be lower for older vehicles is that the car will be cheaper to replace or repair.

The costs of parts go down as the car ages saving the company money.

Since the company has less of a burden, they give you lower rates on physical damage coverage for comprehensive and collision.

Vehicle Safety Features

Every vehicle is equipped with the safety features that are required by law, but many manufacturers are dedicated to improving safety with new features.

This is why cars that have special restraint systems, additional airbags, or other life-saving components will receive special discounts that can lower the rates dramatically.

Check to see how safety features save you money and then be sure that the features are built into the quote.

How Much Damage the Car Causes

Some cars have a heavy structural design that can lead to severe damage in a moderate accident.

This is why the company will review claims statistics and payouts to assign the vehicle with a classification for liability claims.

The vehicle’s classification for property damage and bodily injury is what will ultimately help the company calculate the rates.

Cars that cause a lot of damage to real property may just happen to have high Property Damage premiums. Since all policies include liability coverage, it is important that you realize how the claims of others and classifications affect you.

Other Factors Matter

The vehicle type is not the only factor that matters when you are retrieving quotes for coverage. Your lifestyle, driving habits and the setting you live in will play a role in the rates as well.

If you are a good risk,  you are less likely to file a claim may balance the cost of your insurance for a high-risk car.

Here are factors that are considered in rate determination:

  • Driving of household drivers
  • Years of experience behind the wheel
  • Years of prior continuous insurance
  • How the vehicle is used regularly
  • How often you drive
  • Your occupation
  • Coverage options selected
  • Discounts for good driver, good student, mature driver, etc.

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How to Get Quotes for Vehicles Before You Car Shop

One of the best ways to keep your car insurance costs low is to price the cost of insurance before you buy. If you are a teen driver, this should be the only way that you go when you are buying your first car.

Getting a quote for car insurance is not difficult if you have a general idea of what type of car that you are looking for.

Here is what you’ll need to get an estimate on the premium costs:

  • Names, age, and years of experience for each driver
  • Dates and infraction types for convictions
  • Dates of accidents if at-fault
  • Estimated annual mileage
  • How vehicle will be used
  • Approximate year, make and model of vehicle you like
  • Coverage liability limits
  • Supplemental coverage options
  • Zip code where vehicle will be parked

You can request that you are given several different quotes if there are a long list of cars you want to buy. This is what will show you which cars are considered riskier to the insurer.

If you want to price the cost of coverage for multiple cars without talking to an agent, you can easily request instant quotes online through a comparison tool.

These rate tools show you want you will pay with some of the leading insurers when you buy a specific make and model.

You do not need the VIN but just the year, make and model and all of the vehicle information will populate in the system so that your auto insurance rate is as accurate as possible.

Start comparing car insurance rates now! Enter your zip code below to get started!