Luxury Cars: Higher Insurance Costs?

Are Luxury Vehicles More Expensive to Insure?

Luxury vehicles are generally more expensive to insure than standard vehicles. This is mainly due to the higher repair costs associated with luxury cars. If your luxury car is damaged, the cost of parts, repairs, and labour is typically much higher than for standard vehicles.

The price of insurance also depends on the value of the vehicle, repair costs, theft risk, and the driver's profile. As luxury cars tend to be pricier, have higher-end safety features, and are built for speed, insurance companies may perceive their owners as more prone to risky driving, thus increasing the cost of insurance.

However, there are ways to save money on insurance for luxury vehicles, such as taking advantage of discounts, shopping around for quotes, and maintaining a clean driving record.

Luxury vehicles are more expensive to repair

Luxury vehicles are typically high-performance cars with more features than standard vehicles. They tend to have much higher price tags than regular cars. For example, a 2022 Mercedes-Benz C-Class sedan has a starting price of $43,550, whereas a 2022 Honda Civic costs around $23,000. As a result, luxury car insurance rates are generally much higher than average.

Luxury cars have more expensive and specialised parts, so repairs to their components cost more. This is reflected in insurance costs, as car insurance is designed to protect your vehicle in the event of property damage. The higher the value of the vehicle, the higher the insurance premium.

Luxury cars are more complex and heavier than standard vehicles, with powerful engines and all-wheel-drive systems. They are also packed with technology and computers, which means there are more parts that can break. These parts are often larger and more costly to replace. For example, lightweight materials such as aluminium are popular but can be brittle and require frequent replacement.

Additionally, luxury cars require specialised technicians to repair them, and there is a shortage of talent in this area. This drives up the labour costs of repairs.

How to Save on Luxury Car Insurance

When it comes to luxury car insurance, it is important to shop around and compare quotes from different providers. It is also worth considering companies that specialise in insuring high-value vehicles.

You can also save by being strategic about when and how you make insurance claims. For example, consider the long-term financial consequences of filing a claim and weigh this against paying for repairs out of pocket.

Cheapest Luxury Car Insurance Options

Based on research, USAA tends to offer the cheapest insurance rates for luxury cars. However, it is important to note that USAA policies are only available to current and former military members and their families.

Other insurance companies that offer competitive rates for luxury vehicles include Nationwide and Progressive.

Luxury vehicles have higher price tags than regular cars

The make and model of a car play a major role in how much you'll pay for auto insurance. A 2022 Mercedes-Benz C-Class sedan, for instance, has a starting price of $43,550, while a 2022 Honda Civic starts at around $23,000. The higher-end Mercedes will inevitably be more expensive to insure.

The cost of insurance is also influenced by factors such as location, age, driving record, credit history, gender, and marital status. However, the vehicle itself is a significant factor, and luxury cars are generally more expensive to insure due to their higher price tags and the increased cost of repairs.

Luxury vehicles have more valuable assets that need protecting

Luxury vehicles are often packed with more features and amenities than standard vehicles. These additional assets are usually more valuable and, therefore, need more protection.

Luxury vehicles are typically high-performance vehicles with more features than standard vehicles. They tend to have much higher price tags than regular cars. For example, a 2022 Mercedes-Benz C-Class sedan has a starting manufacturer’s suggested retail price (MSRP) of $43,550. In comparison, the starting MSRP for a 2022 Honda Civic is around $23,000 — almost half the price of the Mercedes.

Because luxury vehicles are more expensive, they usually have more expensive and specialized parts, and repairs to their components cost more. As a result, the cost of car insurance for these cars is often much higher. For instance, the average cost to insure a BMW is $195 per month or $2,337 per year, which is 35% higher than the national average.

In addition to the higher value of the vehicle itself, the increased cost of insurance for luxury vehicles may also be due to the perception that owners of these cars are more likely to engage in risky driving behaviour. This perception could be based on the assumption that people who can afford luxury vehicles are more likely to speed or drive aggressively.

Furthermore, luxury vehicles may also be targeted by thieves more often than standard vehicles, leading to higher insurance rates. According to the Highway Loss Data Institute (HLDI), vehicles built by Hyundai and Kia are often top targets of car thieves, with theft claims twice as common as with all other manufacturers combined.

To adequately protect a luxury vehicle, it is essential to carry the right type and amount of insurance coverage. Collision and comprehensive coverage are important, as they provide physical protection for the vehicle in most covered losses. Gap insurance is another valuable option, as it covers the difference between the actual cash value of the vehicle and the remaining loan balance in the event of a total loss.

In summary, luxury vehicles have more valuable assets that need protecting, and this protection comes in the form of higher insurance costs and specialized coverage options.

Luxury vehicles have higher insurance premiums

Luxury vehicles are typically the most expensive cars to insure. This is mainly due to the fact that luxury cars are more costly to repair. If your luxury car is damaged, the cost of parts, repairs, and labor will likely be significantly higher than for standard vehicles.

Luxury cars are typically high-performance vehicles with more amenities than standard vehicles. They tend to have much higher price tags than regular cars. For example, a 2022 Mercedes-Benz C-Class sedan has a starting manufacturer’s suggested retail price (MSRP) of $43,550. In comparison, the starting MSRP for a 2022 Honda Civic is around $23,000 — almost half the price of the Mercedes.

Insuring a luxury vehicle is typically more expensive than insuring a standard car. The national average for full-coverage car insurance is $2,008 per year, and luxury car insurance rates can often be much higher. For instance, a 2022 Tesla Model 3 costs about 85% more than the national average to insure.

Additional luxury car insurance options

Because luxury cars have added features and more expensive components, you may want to consider additional types of coverage to ensure your vehicle is completely protected. Collision and comprehensive coverage, classic car insurance, and uninsured/underinsured motorist coverage are all options worth considering.

How to save on luxury car insurance

While luxury cars cost more to insure than standard cars, there are ways to reduce costs. Taking advantage of discounts, such as those for anti-theft measures and safety features, can lower your premium. Additionally, storing your vehicle in a garage during the off-season can result in savings by removing certain coverage types when the car is not being driven.

Luxury vehicles are more prone to theft

Luxury vehicles are highly desirable and, therefore, more prone to theft. They are targeted by thieves who can quickly sell them at a great price, often below market value. This is why luxury vehicles are often stolen from dealerships, where thieves can access multiple vehicles at once.

A report by the National Insurance Crime Bureau found that between January 1, 2009, and December 31, 2012, 4,384 luxury cars from the 2010-12 model years were stolen. Of the models analyzed, the Mercedes C-Class had the most thefts reported, followed by the BMW 3-Series, Infiniti G, E-Class, and Cadillac CTS.

Certain areas are more prone to luxury vehicle thefts, with the New York City area (including northern New Jersey and Long Island) reporting the most incidents, followed by Los Angeles and Miami.

While it is impossible to guarantee that a luxury vehicle will never be stolen, there are precautions that owners can take to reduce the risk. These include:

• Parking in well-lit, busy places that are within the line of sight of security cameras and personnel.
• Investing in anti-theft devices, such as electronic engine immobilizers, steering wheel locking bars, or wheel clamps.
• Installing tracking devices to help locate the vehicle if it is stolen.
• Storing the vehicle in a secure garage and using physical immobilizing devices even when parked at home.
• Keeping car keys secure and never leaving them in the car or in plain sight.
• Ensuring that the vehicle is always locked and secured, with all windows closed.
• Taking precautions when parking, such as turning the wheels towards the curb and engaging the emergency brake, to make it harder to tow the car away.

Frequently asked questions