Auto insurance premiums can range from a few hundred dollars to several thousands of dollars per year. The exact cost of your auto insurance premium depends on a range of factors including your insurance provider, your address, your driving record, the type of coverage, and type of vehicle.
Does the Cost of the Car Impact the Cost of the Insurance?
Each insurer charges a certain price for each type of vehicle. Although it’s not the only factor, there is a strong correlation between the manufacturer suggested retail price (MSRP) of a vehicle and how much it costs to insure the vehicle.
Insurers prefer cars that are less likely to be involved in accidents and are cheaper to repair or replace. The exact price is based on an array of factors and formulas. The gist of it is that they favour cars that are newer and cheaper—but without being so cheap that the car poses an accident risk.
Cheapest and Most Expensive Vehicles to Insure
Least Expensive Models
- Honda CR-V - $1,317
- Honda Odyssey - $1,333
- Jeep Wrangler - $1,333
- Jeep Renegade - $1,342
- Jeep Patriot - $1,353
- Jeep Compass - $1,354
- Jeep Cherokee - $1,366
- Chevrolet Traverse - $1,366
- Nissan Frontier - $1,375
- Ford Escape - $1,379
Most Expensive Models
- Mercedes-Benz E-Class CLS-Class - $3,541
- Mercedes-Benz GLE-Class M-Class - $2,737
- Nissan Maxima - $2,176
- Mercedes-Benz Z-Class - $2,090
- BMW 3-Series - $1,957
- Lexus ES - $1,943
- Dodge Challenger - $1,937
- BMW X5 - $1,920
- Dodge Charger - $1,919
- Ford Mustang - $1,873
Luxury cars are the most expensive type of car to insure, at an average of $2,018 per year, according to The Zebra State of Auto Insurance Report 2018. Mercedes Benz Models are among the most expensive to insure because of their higher MSRP, and because it is a foreign company, so parts are more expensive to repair or replace, the report found.
At the other end of the scale, vans are the cheapest vehicles to insure, costing $1,484 on average. With the exception of luxury cars, all other vehicle categories average between $1,484 and $1,724.
Model, and not just vehicle type, accounts for some variation. For example, of the 10 most popular SUVs, the Honda CR-V was the cheapest to insure at $1,317 per year The Nissan Rogue was the most expensive, at $1,500 per year. Of the 10 most popular trucks, the Nissan Frontier was cheapest to insure, at $1,375 per year, while the Honda Ridgeline was most expensive, at $1,664.
Green cars might reduce your gas costs, but they are a little more expensive to insure. The Zebra surveyed five popular hybrid and electric cars: the Prius, Prius-C, Prius-V, Chevy Volt, and Ford C-Max. All these vehicles carried an average annual premium of $1,617 to $1,691.
Insurance Providers May Offer Different Rates on the Same Cars
Your insurance provider matters, and for that reason it’s important to compare auto insurers before purchasing. Each insurer has its own formula when it comes to calculating the price of coverage. One insurer might be better for SUVs and another might be better for luxury cars. Some insurers offer good deals on certain cars that they have a lot of experience covering.
The only way to find out which insurer is right for your car is to compare rates. Request a quote from multiple auto insurers or use a vehicle coverage search tool to have someone else do the job for you in seconds.
Does Adding Safety Features Make Insurance Cheaper?
As anti-theft and safety technologies become more advanced, professionals at Deloitte are predicting auto insurance rates will fall.
For now, car insurance companies aren’t rewarding consumers as much as they probably should. Installing an anti-theft device such as an audible alarm, or passive or active disabling system can save 0.35% - 0.67% on your premium. Most safety devices don’t bring about discounts, except electronic stability control, which drags down rates by 0.50%.
According to The Zebra, it’s likely that the effectiveness of the technology devices and the cost to repair or replace them cancel each other out in terms of impact on insurance rates. While anti-theft and safety features are effective in preventing theft, damage, and injury, they are also expensive to install, the Zebra says.
What Else Can I Do to Lower my Insurance Rates on a High-Insurance Car?
There are many easy ways to save on car insurance. Here are 9 Ways to Lower Your Car Insurance Costs (aside from choosing the right vehicle):
1. Move: Auto insurance premiums vary wildly from state to state. North Carolina drivers pay $865 on average, while drivers in Michigan pay a whopping $2,610. In some major built-up cities, such as New York, Miami, and Philadelphia, residents of urban areas pay far more than people who live out in the suburbs.
2. Get married: According to the Zebra, married people pay about $80 less than unmarried people for vehicle coverage. One reason for this is that married drivers are less likely to file a claim than a single driver.
3. Be financially responsible: Like other types of insurers, car insurance companies reward people with a strong credit score and other good financial credentials.
4. Drive safely: As you would expect, drivers with a good record pay less for coverage than drivers with recent traffic violations. Most traffic violations affect your insurance rate for 3 years, although at-fault accidents can stay on your record for 5 years.
5. Look for discounts and rewards: Most insurers offer a range of driver discounts and rewards based on your personal profile and driving behavior. If you serve or have served in the military, are a student, or belong to a certain profession such as teaching, it’s easy to find discounts. Insurers also offer discounts for simple things like taking a safe driving course, applying online, or agreeing to pay a year’s coverage upfront.
6. Choose a higher deductible: Like other insurers, vehicle insurance companies charge less when the customer agrees to a higher deductible. According to a 2016 report from InsuranceQuotes.com, increasing your deductible from $500 to $1,000 can cut your insurance costs by 8.5%.
7. Bundle insurance policies: Many top insurers offer more than just auto insurance. Bundle your auto coverage with homeowners insurance, life insurance, or another type of coverage for discounts.
8. Shop around: Shopping around is key to getting a better price on vehicle coverage. Even if you think the first offer is a great deal, always check a few other auto insurance companies to compare.