Auto Insurance – Which Cars are Cheapest to Insure?
Selecting the right vehicle can save you money on auto insurance
Auto insurance companies set premium rates based largely on statistical data that shows how frequently claims have been paid over a 3 year period for each car make/model.
The assumption is that if a particular model has had a high rate of insurance losses in the past, it will continue to have losses and claims at the same rate in the future. Owners of those models will pay higher car insurance premiums than owners of other vehicles.
Insurance companies look at a number of factors when establishing rates. Collision data is one of the major factors. In insurance terminology, collision coverage pays for accident damage to a vehicle.
If a particular car make and model is expensive to repair or replace, then collision coverage is more expensive. For example, a Mercedes is relatively expensive to insure because parts and labor are expensive and, in case of destroyed vehicles, expensive to replace.
Frequency of accidents is another factor
Another part of looking at collision data is how often a particular vehicle is involved in accidents. Cars that have a high accident rate cost more to insure. Since cars don’t have
accidents by themselves (actually there was the Audi 5000 back in the 80′s), accident rates are directly related to the category of individuals who drive the cars.
For example, the Mitsubishi Lancer has the highest insurance rate of any vehicle in its class. The reason is not that it is an expensive car to repair or replace, but the fact that it is most often driven by young males who have accidents at a high rate.
Unfortunately, even older drivers and women who buy auto insurance for this vehicle will suffer from high rates due to the misfortunes and inexperience of young male drivers. Insurance companies spread the cost around.
Other factors affecting auto insurance costs
Insurance rates are also determined to a lesser extent by comprehensive claims and losses, as well as liability, injury, and medical claim settlements. These factors are less affected by vehicle make and model, although some vehicles have a high rate of comprehensive loss due to being stolen more often. The Cadillac Escalade is a good example of a most-frequently-stolen vehicle.
Shown below are vehicles with the lowest and highest combined insurance loss rates in their classes, according to the Highway Loss Data Institute. This is data that auto insurance companies use to set rates.