The Pitfalls Of Car Insurance

Car insurance is both a science and an art. Scientifically, many factors come into play that affects the determination of one’s insurance cost. The driving history, the make and model of the car, and the driver’s age are factored into an equation to reach an ascertainable dollar rate for the risk of the insurance coverage.

The biggest factor affecting the cost of the insurance is the age of the vehicle being insured. The market value of the vehicle, called the total loss rate, is the prime denominator in insurance coverage computation. And on the average, sports cars have the highest rate of insurance premium charged by an insurance company. The reason for this higher rate is that these vehicles tend to go faster and this increases the risk considerations in coverage for insurance. Also, the impression that sports cars would allow for showmanship on the road would definitely drive the risk involved higher. Sports cars are also more likely to be vandalized or stolen, which is also a risk factor that drives the cost of insurance higher.

But current innovations on safety being included in the newer versions of sports vehicles also are factored in when computing for insurance costs. Airbags, anti-brake locking systems and anti-crumple cabins significantly counter act the risks involved in sports cars. The more safety features, although some are considered as add-ons, this significantly lowers the rate of the premium. Another factor involved is crash test rankings for sports cars. The higher the rating in crash tests, the safer the car, which in turn translates to lower rates of premium.

So before one purchases a sports car, the sticker price is not only the factor that has to be considered. Costs for maintenance also have to be taken into account and this includes monthly payments for insurance. It is not a great surprise that a car able to go zero to sixty mph in six seconds would have a higher premium as against one that clocks in at twelve seconds. The flashier the vehicle, the more risks involved with the car and thus the higher rate of premium required for full coverage.

In order to be fully apprised of this, one needs to reach out to one’s insurance broker. One needs to know the full cost of coverage for the prospective purchase. Also to be considered are the maintenance costs such as bodywork and repairs for the engine. Spare parts also are part of the equation since one’s vehicle needs to be maintained. If one needs replacement, the disparity between a Lamborghini Diablo’s gull wing door is so much more pricier than a Honda Accord’s staid door panel.

Ultimately, one would choose to purchase a dream car rather than compromise for a safe car. But one must be fully aware of all the costs of the dream car purchase which includes maintenance and spare parts. Also, the mandated car insurance is a matter for consideration since it costs a pretty penny. If one does not invest in this, any risks on the car would be assumed by the owner and that will come out of one’s pockets.

See: Gas credit card

Tags: , , , , , , , , , , , , , , ,

Comments are closed.