How the Car You Drive Affects Your Insurance Rates

Your car insurance rate is determined by a number of factors: driving record, marital status, credit history, age — even your ZIP code. But your car plays a major role in your monthly premiums, too.

A car’s make and model, plus other vehicle features, represent different levels of risk to insurers, and your rate is set based on those various factors. Here’s what you should know.

What Is a Car Make?

A vehicle manufacturer is the manufacturer of a car. Jeep, BMW, Ford, Volvo, and Kia are a few examples of car brands.

What Is a Car Model?

A car model is a specific vehicle line sold by a manufacturer. Jeep Wrangler, BMW M4, Ford Escape, Volvo XC60, and Kia Soul are a few examples of car models.

How Make and Model Affect Insurance Rates

The type of vehicle you drive has a significant impact on your insurance rate. Here's how each component of your vehicle can affect your auto insurance rate.

Vehicle size

Larger vehicles, such as SUVs and trucks, typically have higher insurance premiums due to larger engines and more difficult-to-find parts. However, car insurance underwriting algorithms are becoming more sophisticated, involving dozens or even hundreds of variables — implying that a large car does not always imply a large premium.

“Historically, larger vehicles may have caused more damage to other vehicles in the absence of safety features,” says Teresa Scharn, vice president of personal lines product development at Nationwide. “It is now based on actual experience [of the car's make, model, and trim level].” We examine how [vehicle safety] is rated in terms of the frequency and severity of accidents.”

Vehicle age

Older cars are less expensive to replace and thus less expensive to insure. According to Rick Chen, a spokesperson for Metromile, a digital insurance platform based in San Francisco, there are three reasons for this. Older cars have less sophisticated technology to repair, are less valuable due to natural depreciation, and are less expensive to replace if a major accident occurs.

However, keep in mind that this rate difference is dependent on your coverage. Because liability coverage is based on your driving history, your premiums are unlikely to change if you only have a liability policy. If you have comprehensive and collision insurance, the age of your vehicle may affect your rates.

Classic cars are the main exception to this trend, as they are usually insured on an agreed value, which means the rate is mutually agreed upon by the owner and auto insurance company based on market value.

Trim level

Manufacturers frequently create different trim levels or versions of a vehicle model. They are distinguished by distinctive features and are frequently tailored to specific drivers or applications. High-end trim levels are generally more expensive to repair.

A Honda Accord, for example, comes in several trim levels: “The standard edition has a low starting price and is an entry-level vehicle. The sport edition is mid-tier, has more features, and may be slightly larger, while the high-end, luxury [edition] has the most features,” Chen explains.

According to Chen, car insurance companies use a mountain of data, including actuarial tables and historical claims data, to determine the likelihood of an accident. As a result, “a two-door versus a four-door of the same model will have different risks, even if the differences are sometimes minor.”

Safety features

Safety features, especially if supported by research, can result in a lower rate. According to John Williams, an insurance agent for Farmers Insurance, “many auto insurers will give [you] the ability to add safety features to get discounts, such as blind spot monitoring and radar cruise control.” Additional airbags, automatic braking, rearview cameras, anti-theft devices, and night vision are also desirable features.

Type of coverage

The more coverage you have, the more expensive your premiums will be. All 50 states require some form of liability insurance to cover expenses resulting from bodily injury or property damage in the event of an accident. However, those requirements are typically lower than what experts recommend.

Comprehensive and collision insurance, which covers damage to your car and the other person's car, are highly recommended — though they are more expensive. Adding medical payments, personal injury protection, and uninsured motorist property damage coverage will raise your monthly premiums as well. However, once those policies are added, the incremental costs of coverage aren't prohibitively expensive. “You can reduce your cost per thousand by increasing coverage,” Williams says. “It's like going to McDonald's and ordering a cup of coffee. The majority of the cost is built into the small coffee, and upgrading to a medium or large is usually not much more expensive.”

How Can I Tell the Make and Model of My Car?

By identifying the logo on the vehicle's hood or grill, you can quickly determine the make and model of your vehicle. A search for your vehicle identification number (VIN) can also be beneficial. A VIN lookup feature is available on many car insurance websites.

The owner's manual is also a good place to start. “It will state the exact model and trim. “If it says Honda Accord Sport 2018, you know the exact make, Honda, model, Accord, and trim type, Sport,” Chen explains.