When insuring a vehicle, several factors go into deciding the annual premium rate. While it is common knowledge that driving history, age, ZIP code and credit score have an impact on the cost of auto insurance, not many people consider the make and model of the vehicle when considering how much it might cost to insure a car. The kind of car being insured goes a long way in determining the amount paid in premiums. Being familiar with the vehicle make and model and how they affect insurance rates can help car owners save hundreds of dollars on liability insurance and comprehensive coverage.
What is a car make?
A car’s make is the company that manufactured the car, such as Ford, Nissan, Honda, GMC or Tesla.
An easy way to remember this terminology is that whenever asked for a car’s make, simply name the company that makes it.
What is a car model?
Think of the car’s model as the product the manufacturer sells. It’s the name of the car heard in commercials or seen in print and digital ads. In the case of a Honda Civic, the make is Honda, and the model is a Civic. With a Tesla Model S, Tesla is the make and Model S is the model.
While generally assumed to be similar if they have the same name, such as Jeep Grand Cherokee Laredo or Jeep Grand Cherokee Limited, each is considered a different model due to different features, and insurance companies will consider that when deciding the premium rate.
How car make and model affects insurance rates
While two drivers might have the same car make and model, that doesn’t necessarily mean they will pay the same for car insurance coverage, even if they have identical driving records. There are other factors to consider. The kind of coverage selected will also impact insurance rates. Insurers also consider these factors when determining policy rates.
Age of vehicle
Newer cars cost more than older ones. For instance, a 2010 Ford Fusion will be worth a lot less than a brand new 2020 Ford F-150. The newer the car, the more expensive the insurance. The year the car was manufactured plays just as big a part in the premium rates as the make and model itself.
Size of vehicle
Besides the make and the model of the car, the size also has an impact on the annual premium. The bigger and heavier the construction of a vehicle, the more it costs to insure because big cars can cause more damage. A smart car is less of a risk to other vehicles on the road than a Jeep Wrangler, which is why it might be more expensive to insure the latter.
Modern car owners love bells and whistles. Sunroofs, leather interiors, sound systems, Bluetooth and internet connectivity make driving more fun and convenient, but they also add to the insurance premium. Base models that come without fancy add-ons help keep the car’s cost and the insurance down……Read More>>