How Car Repair Costs Affect Insurance Rates

Certain types of vehicles simply cost less to repair than others after they've been in an accident. Insurance companies take this into consideration when they calculate premiums. Premium and exotic vehicles may cost more to insure because they are more expensive to repair.

The Canadian Loss Experience Automobile Rating (CLEAR) system uses insurance claims information to help insurers decide how much it may cost to repair a specific make and model of car. They also provide information about claims frequency and the likelihood that a car will be stolen.

When it's time to buy a car, it's crucial to research the insurance premiums of various vehicles before you make a final decision.

Insuring a classic car

Collector cars from the 80s or vehicles that are fully restored and more than 40 years old may need specialized insurance. When a classic car is in an accident, it's generally more difficult to find replacement parts and more expensive to repair the damage.

Some insurance companies define a collector car as one with a unique body shape, a two-door sports car, a vehicle with a special engine, or a convertible. The production of exotic vehicles is generally limited to 3,000 or less, and these cars may require special insurance.

Those that drive their classic cars only occasionally benefit from specialty insurance that offers higher value coverage at a lower premium than standard car insurance.

Insuring a hybrid or electric car

Insurance rates for super-efficient cars depend on the location of the battery inside the vehicle. If it's in a particularly vulnerable place, the car could be more expensive to insure. Hybrid vehicles' construction and engine types vary enough that it's crucial to understand insurance costs before making a purchase.

Claim frequencies are lower with hybrid cars, so that helps keep insurance rates down. For example, the Toyota Camry Hybrid has low insurance rates compared to other hybrid vehicles. As more people choose to drive hybrid and electric cars, insurance rates may drop. For now, they'll have to focus on fuel savings.

Also, some insurers offer "green" discounts for drivers of electric and hybrid vehicles, which can keep costs low.

Insuring a luxury car

For example, the average cost to insure a 528i BMW in Toronto when the driver is a 35-year-old male is $1,700 per year. Susceptibility to theft is a factor when insurance companies set rates for specific vehicles. This can drive the price of insurance a luxury vehicle higher, as well. The most expensive vehicle to insure is the Mercedes AMG S65 convertible.

Factors that don't affect insurance rates

Drivers who lease their vehicles don't necessarily pay more for insurance than those who buy their cars. The color of a vehicle is another factor that will not drive up insurance rates. For drivers who simply want to buy a vehicle with historically low insurance rates, the Toyota Prius C Hybrid is a good choice. Other cars with low insurance rates include the Chevrolet Cruz LS and the KIA Sedona L.

There are many reasons an insurance company may offer discounts on premiums. No matter the type of car, if the driver has a clean driving record without convictions or at-fault accidents, they'll pay the lowest rates among their peers for the make and model of vehicle they drive. Some insurance companies offer discounts for attending driving school, having winter tires on the car during winter months, and insuring multiple cars with one policy.

No matter the make a model, the best way to get the lowest possible rate on car insurance is to shop around.