Almost daily there is a new upstart in the short-term insurance business, bombarding media consumers with flashy colours, catchy tunes and the promise of cash-backs, loyalty schemes, no-claim bonuses and all sorts of marketing fluff.
When you finance a car, it must be insured. How much your premium will cost is calculated through a highly complex matrix of circumstances and probabilities, which combined ultimately determine your risk profile.
This is obvious. The more expensive a car, the more it needs to be insured for.
2. The cost of repairs
It’s easy to argue that an older car is cheaper to repair than a new one, but this isn’t always the case. The availability of parts – especially if it’s a rare model, the manufacturer’s level of representation in the country, the technologies employed in the car and the skills required to fix it – all play a part. Less common equals more expensive.
3. Safety features
Safer cars are seen to be less accident-prone. Most cars have been fitted with anti-lock brakes as standard for the past two decades, while newer systems such as park distance control, lane departure warnings and driver drowsiness alerts all contribute to the mitigation of the likelihood of accidents. The flip side is that once out of warranty, these very systems are also expensive to repair. Bear in mind, too, that on lower-value cars, the replacement of an airbag may cause the vehicle to be written off after a crash – even if it’s a minor one – as the cost of replacing the air bag sometimes exceeds the value of the vehicle.
High-performance models inherently carry more risk since they will be driven faster, which mathematically increases the possibility of being involved in an accident due to driver error.