Before you settle on buying an expensive vehicle, enter your ZIP code into the FREE search tool below to get car insurance quotes from multiple companies!
It’s reasonable to assume that the most costly cars to insure are also the ones with the highest price tags. That’s because insurance is intrinsically tied to the value of the vehicle it covers. The more that vehicle costs, the higher the loss potential for the insurance company, and the more they will charge you for a policy. That’s why it’s extremely important to include insurance payments in total cost of ownership when assessing how much vehicle you can afford.
Liability Insurance on Expensive Cars
No matter where you live in the United States, you need to provide some proof of financial accountability through an insurance policy or some other option afforded by your state. Most of us choose a simple liability policy because it’s the easiest and most cost-effective method. Yet liability insurance generally doesn’t fluctuate in price depending on the value of the car in question. Rather, the price difference in liability comes by way of a specific vehicle’s safety rating.
To help you understand this, think in terms of a full-size SUV and a compact economy car. Since liability pays for damages you inflict on someone else in an accident you cause, your insurance company will be looking at the potential damage your car could cause the other drivers or personal property.
Being that the SUV is bigger and heavier, it poses a greater potential for causing significant damage than the compact economy car. Therefore, what you pay for liability will probably be higher.
Collision and Comprehensive Insurance
The biggest price disparity for insurance policies in terms of car value comes by way of comprehensive and collision coverage. These two types of insurance coverage protect both you and your bank in case your car is seriously damaged.
Collision covers road accidents while comprehensive covers everything else. Regardless, a more expensive car will be costlier to repair or replace, thus necessitating a higher price for an insurance policy.
With that understanding, it’s easy to start looking at some of the makers of more expensive vehicles. Forbes Magazine recently came out with their list of the most expensive cars in the world, and it was no surprise to see manufactures like Porsche, Aston Martin, and Bugatti. As far as domestic car manufacturers are concerned, some of the highest priced models come from Cadillac and Chrysler.
How to Find the Data
Whether you’re planning to purchase a new car, or you’re just curious about your favorite model, you can find the data regarding annual insurance costs by doing an online search for the term “total cost of car ownership.” Some good resources for this data are organizations like Kelly Blue Book, Intellichoice, and the Highway Loss Data Institute.
By considering insurance costs, you’ll have a good idea of how much will be paying to operate a specific vehicle.
As an example, suppose you are considering purchasing a four-door sedan with a monthly bank payment of $250. If you add in the cost of a $1,000 annual car insurance policy, that adds approximately $80 to your monthly expenditures before gas, maintenance, and repairs.
If $330 per month for your loan and insurance is more than you can afford, you should consider purchasing a car that’s less expensive. You’ll end up with lower bank payments and most likely an affordable car insurance premium at the same time.
The question of which companies make the most expensive cars to insure comes down to this. After taking into account your driving record, the next two big factors the insurance company looks at is the safety of your vehicle and how much it would cost to repair or replace it. Manufacturers who make cars that are more expensive also tend to produce those that cost the most to insure. To qualify with the cheapest car insurance companies, your best bet is to go for car with a cheap price tag.
As long as you’re here, right now is a great time to start looking for car insurance estimates by entering your ZIP code into the FREE search tool on this page!