By Sarah Mills, ninemsn Money
Car insurance could never be described as cheap but it's fair to say that some cars cost a bomb to insure. Interestingly though, the correlation between a car's price and its insurance premium is far from clear, so it is worth investigating premiums before deciding on a vehicle.
In many instances, more expensive cars are proportionately relatively cheap to insure compared with their less-expensive counterparts. This reflects on a number of factors such as its safety rating, crash rating, break-in rating, its collision damage levels and repair costs.
There are non-car variables that also affect the price of insurance such as age of driver, suburb, sex of driver, driver history, financing and business use but for the purpose of this article, these variables will be excluded in search of the most expensive cars to ensure.
Most insurers use a system which starts with the cost of the vehicle and then factors in the safety and theft data. Cars are given a rating. The higher the number, the higher the premium.
On a dollar-for-dollar basis, there is no doubt that vehicles over $100,000 tend to take the cake, but for the sub-$80,000 vehicle market, the following factors all come into play.
Major factors affecting car premiums
- A four-wheel drive usually tops the price list for average vehicle insurance. They are technically more complex than normal cars and have more expensive components. Interestingly though, this is offset slightly by the fact that four-wheel drives are less likely to be stolen because they are harder to conceal and a much slower get away vehicle. Similarly, a large vehicle can also cause more damage in an accident but is generally safer in a collision.
- Diesel vehicles cost more to repair than petrol-fuelled cars because their components are more expensive. Generally though, owners save on fuel costs which usually outweighs the insurance penalty.
- Vehicles with turbo, high-performance engines also incur higher premiums because it creates greater stress on an engine, which is more likely to lead to engine problems.
Power and performance
- Similarly, engine size is another factor affecting premiums. The theory goes, the more speed and power, the greater the likelihood of an accident at speed. Large engines are also likely to incur a penalty in the brave new world of climate change as they are less likely to be eligible for the premium discounts offered by insurers for good green behaviour.
- The average sports sedan also cops a penalty because of its attractiveness to thieves, which takes us to the next point:
- Susceptibility to theft is a big insurance millstone. A recent Suncorp survey showed that in Queensland, cars worth between $60,000 and $100,000 were more likely to be stolen and that Audis, BMWs and Jaguars were twice as likely to be stolen compared to the average car-theft rate.
- The age of the vehicle is an important consideration. The older the car, the more likely it is to break down and the harder it is to find spare parts, hence the cost of repairs rises and so does the insurance. For example, if you compare a 1991 Ford Falcon and a new Ford Falcon, it would cost less to insure the new car because of availability of parts and colour-matching issues. Rust is also an issue in older cars.
- The availability and price of spare parts is another consideration. For some vehicles, if the car were to be replaced through spare parts, it would cost two to three times the original price of the vehicle. Some parts are just plain expensive. The blue-white headlights are just one example they are up to 10 times as expensive as traditional lights.
Value and condition
- Imported cars also tend to incur higher premiums than locally produced cars because of the price of spare parts. Locally made cars such as Holden, Ford and Toyota have agreements with manufacturers to obtain parts.
- Some cars are more likely to be in accidents than others. Suncorp's survey found that Alpha Romeo drivers were 58 percent more likely to make an at-fault claim than the average.
- The value of the car to be insured clearly plays a role in that spare parts and repairs will be expensive and theft more likely. However, proportionate to the cost, insurance on a new expensive car is less than on an older cheaper car.
- The price of cars has another side to consider. Suncorp's survey found drivers with cars between $60,000 to $100,000 were 10 percent more likely to make an at-fault claim than other car drivers.
- Soft tops tend to cost more to insure than hard tops because they are easier to break into. These days, the technology makes it hard to slash soft tops but the damage bill can still be expensive just from an attempt.
- A car with modifications is bound to set software alarm bells ringing. Not only does it usually entail souped-up engines and more speed and power but it has physics against it. In particular, the law that says once you modify the original, the process towards chaos is accelerated. Also, once you modify a car, the warrantee usually becomes void.
- Gas guzzlers are likely to use up more than just your petrol money. Many insurers are offering discounts on environmentally friendly vehicles. NRMA provides green ratings for cars on its website to help consumers when making purchasing decisions.
- Aluminium body panels are more expensive than steel to fix.
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