More Affordable Car Insurance
In our previous article, How to Buy Car Insurance, we mainly advised that you pay attention to the amounts of different kinds of coverage included to make sure you have enough insurance but not more than you need, and then emphasized the importance of shopping around to get the best deal possible in a very competitive market. Think of all those commercials you see from different car insurance companies all saying they can save you money – it’s worth checking them out and comparing them to each other. But there are other ways to get more affordable car insurance. The ones we’ll cover in this article include the kind of car you’re insuring and whether or not you should participate in one of those driving habit tracking programs some companies offer.
More Affordable Car Insurance Depends on Your Car
Besides how competitive some insurance companies are with the cost of their policies, a major driving force behind insurance rates has to do with the kind of car you’re insuring. When an insurance company is looking at what they’re going to charge for their coverage, they take into account the vehicle’s risk as shown by claim histories, accident rates and how often they get stolen. Particular models with higher claim histories are going to cost more to insure while those with fewer and lower-cost claims will be cheaper to insure. The insurance companies are trying to take in more revenues through premiums customers pay than what they pay out in claims because that’s how they make money.
This relatively simple concept explains why some kinds of cars are always going to cost more to insure. Sports cars are typically driven by younger drivers, who are more likely to have accidents, which drives up the cost to insure them. Luxury cars are also more expensive to insure because repair costs are higher for them, as is the cost of replacing them when totaled. The higher costs involved in repairing electric and hybrids can also make them costlier to insure. If your car is one that thieves find attractive, the cost of your comprehensive insurance will be more.
So where does that leave you in terms of the cars that are cheapest to insure? One analysis looked at the top 25 best-selling models of cars and then ranked the top five cheapest to insure models as 1) Subaru Outback, 2) Ford Escape, 3) Chevrolet Equinox, 4) Toyota RAV4, and 5) Honda CR-V. If you look at the wider market and not just top-selling models (which tend to have higher-than-average insurance costs), the ranking comes out more like this: 1) Honda Odyssey LX, 2) Jeep Renegade Sport, 3) Jeep Wrangler Black Bear, 4) Honda CR-V LX, and 5) Jeep Compass.
If you’re in the market for a new car, those rankings could help you choose a vehicle that will cost less to insure. What about used cars? Somewhat different but not hugely so. The rankings for used cars by average insurance costs will typically include Honda Odyssey, Honda CR-V, and Ford Escape as highly recognizable models. But then you’ll also find some odd ones such as Saturn SL1, Kia Spectra and Mercury Sable.
Tracking Devices for More Affordable Car Insurance
Many of the insurance companies are offering “safe driving” programs that can get you a significant discount on your car insurance. The way these programs work nowadays is either through a smartphone app or by plugging a tracking device into your diagnostics port and leaving it there for some period of time. The device keeps track of various driving habits the companies think are important to safe driving such as hard breaks, fast accelerations, late-night driving, safe speeds, and so forth. Here are some of the programs offered by various companies:
If you do any of these programs, you have a great chance to get significant savings if you don’t do late-night driving and avoid fast starts and high speeds. But what you’ll quickly find out is how often you stop with what the device is going to consider a “hard brake.” This can get really frustrating when the device beeps what feels like every time you stop. It seems the devices consider a hard brake an indication that you’re either driving too fast or not paying attention. What it doesn’t account for is how often what it considers a “hard brake” is in reality good defensive driving – like to avoid hitting wildlife or people or other objects that appear suddenly in front of you. But if you can train yourself to really go easy and start applying your brakes gently well ahead of when you need to make a stop, even that annoying feature can be overcome.
It’s also worth noting that right now these programs are all opt-in, but that might not always be the case. Insurance companies could decide to require them. It may be worth your while to try one of these programs if one is offered by your current insurance company just to get a feel for how they work so that if it becomes required in the future, you’ll already know how to drive in ways that won’t hurt your insurance rate.
Most of these programs have also evolved over the years to change their basic approach. It used to be that what they were doing was rewarding drivers with good habits by discounting their insurance rates. The approach now is one of penalizing drivers with bad driving habits with higher rates. The all still use the same language of “saving money” on your insurance by participating in the program, but the shift in philosophy is interesting.
These programs are not without controversy. The devices do track GPS location of your vehicle, which may or may not play into what the insurance company is considering for potential discounts (or avoidance of penalties). But a lot of people just don’t like the idea of being tracked that closely. It also raises the larger issue about data use and abuse. The devices are collecting and conveying all sorts of data from your car’s computer systems, so how well is the data encrypted (if at all) when being transmitted? How easily can those devices be hacked and become a way into your vehicle’s computer systems? These are questions the companies have not really dealt with in a definitive way, leaving many customers wary about participating in them. A great article about the various issues involved can be found here.
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