Consumers are mistaken in their belief that smaller, more fuel-friendly vehicles are cheaper to insure. In a price-by-price comparison, larger cars, trucks, and SUVs routinely return lower premium levels because they are perceived to be safer in insurer risk profiles.
For instance, the half-ton GMC Sierra K1500 pick-up, on average, can be insured annually for $1,121. The Honda Civic, which is a well-respected four-door sedan with a reputation for good gas mileage and low maintenance rings up a yearly premium of $2,353.
Why does the insurance industry see a car like the Civic as a greater risk? The Civic is most often chosen by younger drivers who live in urban environments and have no children. Add to that the compact form factor, which will sustain a greater degree of damage in an accident, and the Civic becomes, to the insurance industry, a “dangerous” car.
The Toyota Sienna LE, a minivan, and a likely choice for families with children can be insured for $1,111 a year. It benefits both from its form factor, the perceived driver profile, and the high crash-test scores it receives. On the other end of the spectrum, the Audi R8 Spyder Quattro, a machine obviously designed for speed that would be incredibly expensive to repair, runs up an annual insurance bill of $4,384.
Location is also a factor in determining rates. Rural areas have a lower incidence of accidents even along isolated roads that may have a high speed limit, but low traffic density. And some cost factors are completely out of drivers’ hands. When your 16-year-old son or daughter learns to drive and is added to your auto insurance, your rate will go up, period.
While you may not be able to move to the country, and you certainly can’t keep your children from growing up, you can think about the kind of car you’re driving, and research the likely insurance rates ahead of any new car you might purchase. There are many ways to find auto insurance discounts, but some aspects of pricing have nothing to do with your driving record or whether or not you get your statements on paper or electronically.