Be Money Aware

If you are looking to buy a new car, you probably consider many features including comfort, fuel economy, color and more. However, it is also essential to consider your new vehicle’s insurance cost. Different types of cars yield different premium rates due to many factors. So, it is best to weigh all the options before you get set to purchase your new car. If you are looking to shift from a sedan to an SUV and join the bandwagon, do rethink again keeping the below pointers in mind. Not only you have to part with a bigger price, but you may also have to shell out more insurance premium as the size of the car goes higher.

Size Matters

The size of the car plays a significant role in determining the insurance premium. Many people think that smaller cars are easy to maneuver and therefore have a higher risk of accidents, leading to higher premium rates. However, this is not true. A large SUV can drive up your premium amount, especially the mandatory third party liability part. Since a larger vehicle has a higher potential to inflict the major amount of damage to the third party, it can lead to a higher premium amount.

High-end Cars – Higher Premium

A vehicle’s manufacturer listed selling price minus its depreciation value directly translates to the insured declared value (IDV) of the car. The cost of the car is the prime consideration to set the IDV and in turn affects the premium. The higher the price of the car, the higher the IDV and the higher the premium.

Higher Repair Costs

Also, because the parts of an expensive car will cost a lot more to repair and replace, it fetches a bigger premium. For example, a four-wheel drive system tends to be pricey when it comes to extensive repairs. Even replacing a windshield of an expensive car will cost a fortune.

Big Engine – Bigger Rates

The cubic capacity of the engine and its horsepower impacts the premium amount of the vehicle. Different sizes of the engine even among the same make or model will yield differences in the insurance premium based on its cubic capacity.

Bigger Cars – Higher Chance of Theft

The most frequent targets of this crime are high-end SUVs and other luxurious mid-size cars. Owing to this reason as well, the insurance premium for SUVs are higher since they are more prone to getting broken into and stolen.

Overall, it is best to do complete research before you make a big purchase. Once you do make the choice, make sure to compare different insurance premium quotes and select the best according to your requirements. If your car is expensive, don’t try to compromise on the coverage to save a few bucks. Instead compare different choices and choose an ideal coverage.

Also apart from the above factors insurance companies also look at your age, profession and geographical location to determine your premium amount. At times, you are eligible for certain discounts on the premium amount as well.

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