If you are shopping for a new car and want to keep your insurance costs down, you may want to avoid luxury models and sports cars. Instead, opt for a sedan or minivan, which will likely have lower insurance rates.
According to a recent study, the type of car you drive is one of the key factors in determining your auto insurance premiums. The study, which was conducted by the Insurance Information Institute (III), found that luxury cars and sports cars typically have the highest insurance rates.
The III study looked at insurance rates for a number of different car types, and found that the average premium for a luxury car was nearly $3,000 per year. Sports cars had an average premium of just over $2,700 per year. By contrast, the average premium for a sedan was less than $2,000 per year, and the average premium for a minivan was just over $1,700 per year.
There are a number of reasons why luxury cars and sports cars have higher insurance rates. For one thing, they tend to be more expensive to repair or replace if they are involved in an accident. They also tend to be driven by younger, more inexperienced drivers, who are more likely to get into accidents.
Auto insurance premiums can vary significantly from one driver to the next. A variety of factors, including the driver’s age, driving record, and the type of vehicle being insured, can affect the cost of a policy.
Generally speaking, drivers who are considered to be high-risk will pay more for their auto insurance than those who are considered to be low-risk. This is because high-risk drivers are more likely to be involved in an accident, and the insurance company will want to protect itself from having to pay out a large claim.
Some of the factors that can make a driver high-risk and result in higher premiums include:
• A young age: Drivers under the age of 25 are typically considered to be high-risk and will pay more for their insurance. This is because they have less experience behind the wheel and are more likely to be involved in an accident.
• A poor driving record: Drivers with a history of accidents or traffic violations will also be considered high-risk and will pay more for their insurance. This is because they are more likely to be involved in an accident in the future.
• A high-powered or luxury vehicle: Cars that are expensive to repair or replace will also result in higher premiums. This is because the insurance company will want to protect its investment in the event of an accident.
So, if you are looking to save money on your auto insurance, it is important to consider all of these factors. Drivers who are considered to be high-risk will typically pay more for their insurance, so it is important to do what you can to lower your risk.
If you are a young driver, consider taking a defensive driving course to improve your skills behind the wheel. If you have a poor driving record, try to avoid accidents and traffic violations by obeying the speed limit and being extra cautious when driving. And, if you have a high-powered or luxury vehicle, be sure to shop around for the best rates and coverage.
Wendy is now a financial analyst and writer. Wendy has been writing about finance and personal finance since she was a sophomore in high school. She has also been writing for several online publications and published in The Huffington Post, and Forbes Woman.
Wendy is a credentialed financial analyst and has experience working with financial institutions and businesses. Wendy is also a certified financial planner. When Wendy's not writing, she enjoys tending to her many plants, watching TV, and spending time with her family.
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