Repair Costs and Theft Risks Boost Insurance Premiums.
If you’re driving a Bentley, of course, you pay far higher insurance premiums than the guy beetling along beside you in an old Volkswagen bug. You may not, however, pay substantially more than the guy ahead of you in the Escalade or the guy behind you in the Accord. Industry experts say two variables have greatest impact on “the real cost” of car insurance—vehicle repair costs and car thieves’ vehicles-of-choice.
Exotic sports cars and rare luxury vehicles top everyone’s lists of most expensive cars to own, operate, and insure. Writing for Forbes online edition, Jim Gorzelany explains, “Though auto insurance companies largely base premiums on a motorist’s driving record, address, age, gender, marital status and credit rating, the make and model of car one drives is also a determining factor. As one might imagine, pricier cars tend to carry higher premiums than more-affordable models.” Gorzelany stresses that high-tech composite body parts, computer-controlled engines and advanced drive trains drive repair costs into the stratosphere. Terrence Cahill of 21st Century Insurance echoes Gorzelany’s point: “The more expensive the car the more it typically costs to repair, especially when you consider exotic materials being used in some of these autos like aluminum and carbon fiber,” he says.
The top five most expensive cars to insure include…
• Mercedes Benz CL600 This classic motorcar both has power and symbolizes power, making it a favorite among CEOs, surgeons and litigators for whom it represents all they cherish. Underneath the CL600’s stately exterior lurks the planet’s most advanced automotive technology, most of which only Mercedes Benz mechanics have knowledge and tools to repair. As you motor between country club and private practice, expect to pay more than $3,500 for insurance on your Benz. Its less pretentious sibling, the S600, ranks right behind the CL600 on the list of priciest rides. It, too, costs a little over $3,000 to protect properly with comprehensive and collision.
• Audi R8 Quattro Coupe You don’t often see R8 Quattros on the road. That’s part of the problem: parts and mechanics are hard to find, and these mid-size road rockets, better suited to Le Mans than the L.A. Harbor Freeway, have such advanced design and components that only wrenchers with advanced engineering degrees need apply for work as repairmen. Also factor in R8s’ appeal with the highest-risk insurance demographic—single men between 21 and 30—and you have the formula for premiums well in excess of $3,500 per year.
• Porsche Panamera Turbo For some hard-core auto aficionados, the Panamera’s appearance on the list comes as a shock because the Panamera is considered an abomination—it’s a four-door! That quirk, however, accounts for Panamera’s popularity with 30something family men who still yearn for great performance as they drive morning pre-school carpool. The macho mélange of power and practicality drives insurance premiums over $3,000 per year. The Panamera’s far more attractive brother, the 911 Turbo Cabriolet, ranks close behind for all the right reasons. The 911 combines performance, popularity, technical sophistication and raw sex appeal, making it both difficult and expensive to repair and an irresistible target for sophisticated thieves. As you roll back your Cabrio’s ragtop, expect to pay about $2,700 for insurance.
• BMW Active Hybrid 7 This exquisite Beemer arguably stands out as the single finest vehicle on the road today because it combines hybrid economy with legendary Bavarian speed and handling, and it comfortably carries an upscale family everywhere they need to go. Expensive to maintain, even more expensive to repair or replace, it commands about $2,700 in insurance premiums.
Thieves prize power and popularity.
Higher repair costs account for the lion’s share of higher premiums, but increased theft risks also drive-up insurance costs. Car thieves have two preferences: They like high-end, high-powered macho machines, and they like exceptionally popular mid-size cars they can “chop” for parts. Therefore, owners of these vehicles pay higher premiums for theft insurance.
An average Honda Accord is worth five times more in pieces than it’s worth on a dealer’s lot. Therefore, they frequently disappear from mall and college campus parking lots where suspicious neighbors and local security cannot stop high-speed thieves. Toyota pick-up trucks rival Accords’ theft-worthiness because they are exceptionally popular and seldom change design specifications from year to year. Just as importantly, a skilled thief can take-off in a late model Tacoma with the aid of just a screwdriver.
Among much-prized macho-machines, customized Ford Mustangs still rank No. 1. In the proud tradition of the original Gone in Sixty Seconds which starred a Shelby Mustang GT, Cobra Mustangs and California Specials have magnetic appeal for car thieves in search of quick bucks in the underground market. Because they remain extremely rare in the United States, Audi R8 Spyder Quatros bring big bucks on the black market; and because they are so masculine, Cadillac Escalades frequently disappear from urban streets, often finding their way to Mexico.
Reflecting on prestige cars’ staggeringly high costs of ownership and operation, Jim Gorzelany and other prominent automotive writers sagely have commented, “Every aspect of ownership is of an ‘if you have to ask you can’t afford it’ nature.” With that thought in mind, you suddenly may find that beetling little VW bug extremely attractive. It is, after all, a classic.
– Annie Duncan blogs for insurance companies that focus on insuring the most expensive rides.
