As with most things nowadays, car insurance premiums are rising at a steady rate. For most Americans, monthly car payments and insurance costs make up a substantial amount of overall spending. Knowing your expected insurance cost is essential to budgeting and planning your expenses if you are in the market for a new car. Certain factors, such as your demographics or location, might be out of your control for insurance rate calculations. However, deciding which car to purchase can be just as important. This article will reveal some of the tricks to purchasing car models to save money on insurance premiums, from the most frugal options to expensive high-end manufacturers.
Planning For The Future
When purchasing a new car, the price tag you see is not the only price you pay. Besides insurance, which fluctuates based on the make and model of the vehicle, you also have to consider the cost of fuel, potential repairs, and upkeep. A car that seems within your current budget might significantly cause financial stress later in life. Financial experts usually recommend spending no more than 15% of your monthly income on transportation. Even slight monthly differences in your car insurance premium can put one make and model of the car far above that threshold while another stays within the recommended range.
Which Car Models Are The Cheapest To Insure?
When it comes to insuring cars, money is always the name of the game. A more expensive vehicle will carry a higher premium in order for the insurance company to recoup repair costs in the case of an accident. When picking a new car with insurance costs in mind, remember these factors:
- Make and Model: Certain car manufacturers create vehicles with lower average insurance costs. Commonly seen ‘makes’ such as Honda, Toyota, and GMC have considerably cheaper insurance costs, on average, compared to higher-end brands like Maseratis, Teslas, Audis, and BMWs. However, your insurance is not necessarily interested in the average cost for specific manufacturers’ vehicles. Mazda SUVs, for example, are cheaper to insure than the average vehicle. This is due to the fact that certain types of cars have a lower financial risk for insurance companies.
- Repair and Maintenance Data: The cheapest types of cars to insure are ones with an overall low cost of repair and safe driver profiles. This list varies year by year but is generally dominated by minivans, SUVs, pickup trucks, and sedans. Even if you opt for a more expensive manufacturer, the specific type of car models purchased can dramatically affect your premium.
- Age of Vehicle: The age of your vehicle can change the insurance cost, but many factors can potentially influence this number. Generally, older cars will have a lower price and therefore be insured for less. However, buying an older car that lacks safety features might end up ballooning the financial cost of repairs and lead to a higher overall premium.
As you can see, the type of car you drive can cause dramatic fluctuations in your monthly bill. To recap, in order to save money on your car insurance premium, you should:
- Purchase a vehicle type known for cheaper insurance premiums (SUV, Minivan, Sedan)
- Purchase from a car manufacturer with lower overall costs
- Opt for a used/older car only if the car has comparable safety features with modern vehicles
If you find the process of insuring your car complicated at times, you are not alone. The team of experts at Anderson & Associates Insurance Group can help you to navigate the system and find the best coverage for your needs. Call today to learn more about the difference having a partner in the insurance business can make.
