The major difference between insuring a traditional car and a luxury car is of course, the costs. The higher the value of your car is, the higher the costs are for insuring it. This is why it’s worthwhile to consider buying a used luxury car instead of a brand new one. Luxury car insurance provides insurance cover to a certain category of cars that are more expensive than most of the cars. Some brands that fall under this category include Ferrari, Lamborghini and Bentley.
Insurers see these cars as high risk due to their extremely high value. Luxury cars would entail more expensive parts, repairs, and the high-risk crash rate associated with very high horsepower, thereby increasing the risk for the car insurance company.
It’s important to note that there are two main types of luxury cars: high-performance vehicles (HPVs) or more commonly known as sports cars and high-value vehicles (HVV) commonly known as luxury sedans. HPV brands usually cost more to insure than HVV types because sports cars are associated with higher risk rates and profiles.
Also, insuring second hand luxury cars are relatively cheaper than brand new cars due to the fact that their value quickly the depreciates. Once a brand-new car is purchased and driven out of the showroom, its value starts to decrease. At the same time, brand new luxury cars are actually considered easier to insure thanks to their higher safety ratings and safety features.
Required Insurance Coverage for Luxury Cars
It’s advisable to get a fully comprehensive coverage for a luxury vehicle. Due to its high price and reputation, luxury cars have higher theft rates and higher repair costs. Getting the right coverage that will save you more money in the event of an accident, loss of parts, or other such damages will give you peace of mind. Specific covers that are mandatory for luxury cars are:
- Collision and comprehensive insurance
- Personal injury protection
- GAP or new car replacement insurance
By comparing online is the easiest and quickest way to find the lowest rates, whether it’s a traditional or luxury car. Prioritizing which type of cover to select will also result in cheaper rates as some covers are more vital for your luxury car than others. Make sure that you are comparing different quotes, evaluating optional add-ons, and adjusting them to what you really need. The only difference is, of course, the higher premium rates you’ll get for a luxury car insurance premium.