Reader’s Question:
Im planning to buy a new car..not just any car, its a sports car! I know a lot of people are telling me that it would cost me a lot on my sports car insurance but I would like to know more about it. Why is it expensive? Can I do anything to make it cheap?
George
New York NY
When we think of cars, we think of the model and new car models are usually expensive. But before you buy this type of car, you should also note that these type or cars are charged with expensive sports car insurance premium. The reason behind this is because its parts are expensive and the cost of repairing the car is also costly. On the other hand, sports car insurance can also cost you high insurance premium. SUVs or sports utility car are usually driven in such a way that can cause traffic accidents and crashes. Because of this risk to car insurance companies, they charge these cars with high car insurance rate. There are cases however when an SUV is cost more to insure than another type of SUV. This is because car insurance companies also consider the following factors when they rate car insurance premium.
a. There are certain models that are likely to be stolen, involved in traffic accident and to be vandalized. In this regard, car insurance companies charge those cars with high car insurance rates.
b. New model of cars or expensive type of cars usually also have expensive parts and are costly to repair. Thus, the risk involved is passed on to the car insurance rate charged to customers.
Highway Loss Data provides information on the amount of money that car insurance companies paid out on the average because of collision, injury, theft claims for different types of motor vehicles. Therefore, there will be cases when an SUV is more expensive to insure than an expensive car because the former is more attractive to thieves and be stolen. Aside from the statistics provided by Highway Loss Data, car insurance companies also consider their own claims experience. For example, if a certain model of SUV has more claims than the other model, the model with more claims will likely receive higher sports car insurance rate.
You may be able to get price reduction on the cost of car insurance if you install safety features in your car and by taking defensive driver class to get a discount.
So if you are thinking of buying sports car or high performance car, think. But if you can afford it, well, enjoy the ride!
