Vehicle Size Affects Auto Insurance Rates
Dumping a gas-guzzling SUV for a smaller, more fuel-efficient vehicle will certainly save on gas, but does purchasing a tiny vehicle translate into big auto insurance savings? Not necessarily.
In fact, a fuel-sipping compact could actually increase auto insurance rates.
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Smaller Vehicle = Higher Auto Insurance Rate
If you own a compact vehicle, you may be paying more for auto insurance. A crash study by the Insurance Resource Council found that the average insurance claim in lighter-weight vehicles (2,771 pounds or less) was 14 percent greater than that of the higher-weight group (3,726 pounds or more). Additionally, smaller vehicles tend to be less expensive than larger vehicles, making them a favorite of young, inexperienced drivers. Many of these entry-level compacts lack modern standard safety features, leaving drivers at greater risk of serious injury.
For these reasons, smaller vehicles are seen as more of a risk for auto insurance companies, and drivers of smaller vehicles typically pay an increased rate for auto insurance.
Auto Insurance Rates for SUVs
Despite the fact that the Insurance Institute for Highway Safety states that larger vehicles are inherently safer than smaller ones, you probably won't get much of a bargain insuring an SUV either. By virtue of their increased mass, SUVs can absorb more crash impact than smaller vehicles. But since they don't have to meet federal government bumper standards, even small accidents can cause a lot of damage-and large auto insurance claims. Also, their susceptibility to rollovers adds another element of jeopardy for auto insurers.
These factors contribute to an additional 10%-20% that SUV owners pay for auto insurance.
Own a Compact or SUV? You Can Save on Auto Insurance!
If compacts and SUVs both carry hefty insurance premiums, how can you save on auto insurance? Short of purchasing a midsize sedan with a phenomenal safety rating, the best way to save on auto insurance is to shop around for a more affordable rate.
If you don't take time to shop and compare auto insurance policies, how can you know you're getting the best price?
