How the Car You Drive Affects Your Insurance Rates

A photo to accompany a story about car make and model Twenty20

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Your car insurance rate is determined by a number of factors: driving record, marital status, credit history, age — even your ZIP code. But your car plays a major role in your monthly premiums, too.

A car’s make and model, plus other vehicle features, represent different levels of risk to insurers, and your rate is set based on those various factors. Here’s what you should know.

What Is a Car Make?

A car’s make is a vehicle manufacturer. Examples of car makes include Jeep, BMW, Ford, Volvo, and Kia.

What Is a Car Model?

A car’s model is a specific vehicle line that a manufacturer sells. Examples of car models include Jeep Wrangler, BMW M4, Ford Escape, Volvo XC60, and Kia Soul.

How Make and Model Affect Insurance Rates

The type of car you drive makes a huge difference in your insurance rate. Here’s how each part of your car can affect your car insurance rate.

Pro Tip

Cars with high safety ratings tend to be cheaper to insure. Just make sure to look out for cars with safety recalls, as you don’t want a vehicle that will malfunction on you.

Vehicle size

Bigger vehicles, like SUVs and trucks, tend to have higher insurance premiums because they have bigger engines and parts that are more difficult to source. But now, car insurance underwriting algorithms are more sophisticated and can involve dozens or even hundreds of variables — meaning, a large car doesn’t necessarily mean a large premium. 

“Historically, without safety features, larger vehicles may have caused more damage to other vehicles,” says Teresa Scharn, vice president of personal lines product development at Nationwide. “Now it’s based on the actual experience [of the car’s make, model, and trim level]. We look at how [vehicle safety is] rated based on the frequency and severity of accidents.”

Vehicle age

Older cars tend to be cheaper to replace and therefore cheaper to insure. There are three reasons for that, according to Rick Chen, spokesperson for Metromile, a digital insurance platform headquartered in San Francisco. Older cars tend to have less sophisticated technology to repair, they tend to be less valuable because of natural depreciation, and they’re cheaper to replace if a severe accident were to happen.

Keep in mind, though, that this rate difference depends on your coverage. If you only have a liability policy, your premiums likely won’t change since the coverage is based on your driving history. However, your rates may be affected by your vehicle’s age if you have comprehensive and collision insurance.

The main exception to this trend is classic cars, which are usually insured on an agreed value, which means the rate is mutually agreed upon by the owner and auto insurance company based on market value.

Trim level

Manufacturers often create different trim levels, or different versions, of a vehicle model. They’re identified by special features and often targeted to certain drivers or uses. In general, high-end trim levels are more expensive to repair.

For example, a Honda Accord has multiple trim levels: “The standard edition has an economical base and it’s an entry-level car. The sport edition is medium tier, has additional features, and may be slightly bigger, and the high-end, luxury [edition] is decked out with the most features,” says Chen.

Car insurance companies use a mountain of data, including actuarial tables and historical claims data, to determine the likelihood of an accident, explains Chen. That’s why “a two-door versus a four-door of the same model will have different risks, even if [the differences are] sometimes slight.” 

Safety features

Safety features, especially if they’re backed up by studies, can earn you a lower rate. Many auto insurers will “give [you] the ability to add safety features to get discounts, like blind spot monitoring and radar cruise control,” says John Williams, insurance agent for Farmers Insurance. Other sought-after features include additional airbags, automatic stopping, rearview cameras, anti-theft devices, and night vision.

Type of coverage

The more coverage you have, the higher your premiums. All 50 states require some degree of liability insurance, which will cover expenses related to bodily injury or property damage from an accident. However, those requirements tend to be lower than what’s suggested by experts. 

Comprehensive and collision insurance, which, respectively, cover damage to your car and the other person’s car, are highly recommended — though they do come with added cost. Adding coverage for medical payments, personal injury protection, and uninsured motorist property damage will also increase your monthly premiums. However, the incremental costs of coverage, once you add those policies, aren’t significantly expensive. “You can lower your cost per thousand by increasing the coverage,” says Williams. “It’s like going to McDonald’s and buying a coffee. Most of the cost is built into the small coffee and to upgrade it to a medium or large, it’s typically not a lot more money.”

How Can I Tell the Make and Model of My Car?

You can easily find your car’s make and sometimes the model by identifying the logo on the vehicle hood or grill. A search for your vehicle identification number (VIN) will also help. Many car insurance sites offer a VIN lookup feature. 

The owner’s manual is also a good bet. “It will say the exact model with the trim. [If it says] Honda Accord Sport 2018, then you know the exact make, Honda, the model, Accord, and trim type, Sport,” says Chen.