Types of Cars and How They Affect Auto Insurance Rates

By the Mercury Team

When it comes to auto insurance, the price you pay isn’t just a random number. Insurance companies use various factors to determine your premiums. While some of these factors are personal to you — e.g., driving record and where you live — others are directly related to the car you drive. In this blog, we’ll go through how vehicle classifications can impact your insurance rates and what you can do to make sure you’re getting the best deal possible.

What Is a Car Class?

A car class is a general category or grouping of vehicles based on their size, shape, and function. This classification helps you understand a car’s main purpose, whether it’s built for commuting, performance, or heavy-duty work. Common classes you’ll come across include sedans, SUVs, trucks, sports cars, luxury models, and hybrids or electric vehicles.

What Is the Make of a Car?

A car’s make refers to the manufacturer or brand that produces the vehicle. For example, popular makes include Ford, Toyota, Honda, and Chevrolet. Each make has its own reputation — some are recognized as super reliable, while others are known for being sporty or innovative. In essence, the make gives you a broad idea of what to expect from the car.

What Is the Model of a Car?

Within each make, there are different models, which are the specific categories of cars that brands produce. The model tells you more about the car’s size, style, and features. For example, if you’re looking at Toyota, you expect the Camry model to be a mid-size sedan and the Tacoma model to be a two- or four-door pickup truck.

Understanding What Determines Car Insurance Rates

“Choosing the right car class can make a bigger difference on your insurance premiums than many drivers realize,” says Justin Yoshizawa, Director, Product Management State for Mercury Insurance. “It’s one of the key factors we look at when determining rates.”

Let’s break down how these different types of cars can impact your insurance costs.

Car Insurance Rates by Class

Sedans

Sedans are often among the most affordable cars to insure. Their moderate speeds, solid safety ratings, and lower repair costs make them a practical choice for keeping premiums down.

SUVs

SUVs offer more space and better crash protection, but those benefits can come with higher repair costs if you’re involved in an accident. This can mean slightly higher insurance rates compared to smaller cars.

Sports Cars

Sports cars are built for speed and performance, which can increase the chances of accidents or speeding tickets. Because of that, they tend to come with higher insurance premiums.

Trucks

Insurance rates for trucks can vary depending on how you use them. Personal-use trucks might have reasonable premiums, but larger trucks used for work or hauling can lead to higher rates due to their size and potential liability in an accident.

Luxury Cars

Luxury vehicles usually cost more to insure because of their high-end parts and advanced technology, which can be expensive to repair or replace. They’re also more likely to be targeted by thieves, which can drive premiums up even further.

EVs & Hybrids

Electric and hybrid cars can come with higher insurance costs because of their specialized batteries and unique parts. However, many models qualify for auto insurance discounts thanks to advanced safety features and eco-friendly benefits, which can help offset the cost.

Car Insurance Rates by Make

The make can influence your insurance rates in a few ways. Some brands are known for producing reliable, safe cars that are less expensive to insure. For example, brands like Honda and Toyota often come with lower insurance costs because they have strong safety records and aren’t as expensive to repair. On the other hand, luxury brands like Audi or Mercedes-Benz tend to have higher insurance rates due to their expensive repair costs and the fact that thieves are more likely to target them.

Car Insurance Rates by Model

The model adds another layer to the insurance equation. Even within the same make, different models can have vastly different insurance rates. For instance, a sporty model like the Ford Mustang might cost more to insure than a more practical model like the Ford Escape. Why? Sports cars are riskier to insure because drivers tend to accelerate fast in them, which may lead to accidents. On the flip side, models that are known for safety and practicality, like the Subaru Outback or Honda CR-V, tend to come with lower insurance costs.

Specific Factors Influencing Car Insurance Rates by Class

Here’s a detailed look at how specific factors tied to your car’s class can impact what you pay for insurance:

New or Used

Generally, newer cars often cost more to insure because they’re more valuable and may have expensive technology that increases repair costs. However, there are exceptions. For example, classic cars may have higher insurance premiums due to their rarity and the potential cost of specialized repairs.

Safety Features

Cars with advanced safety features, especially Advanced Driver Assistance Systems (ADAS), can help lower your insurance rates. Technologies like adaptive cruise control, blind-spot monitoring, and automatic emergency braking lower your chances of getting into an accident and filing a claim. Because of that, many insurers offer discounts on your policy to show their appreciation.

Theft Rates

The likelihood of your vehicle being stolen is another important factor. Certain models, such as the Honda Accord or Hyundai Elantra, are frequently targeted by thieves, leading to higher insurance costs.

Tips for Managing Insurance Rates by Class

Here are some tips to help you choose a car that won’t break the bank when it comes to insurance:

Choose a Car with High Safety Ratings

Cars with top safety ratings often lead to lower premiums and even auto insurance discounts. For example, vehicles like the Subaru Outback or Mazda 3, which consistently receive high safety ratings from the Insurance Institute for Highway Safety (IIHS), can help you save on insurance. Look for models with advanced safety features like automatic emergency braking, lane departure warnings, and adaptive cruise control.

Consider the Vehicle’s Theft Rates

Some cars are more prone to theft, which can drive up insurance costs. Before purchasing, check if your desired make and model has a high theft rate and consider choosing a less targeted vehicle.

Avoid High-Performance and Luxury Vehicles

While it might be tempting to drive a sports car or luxury vehicle, these types of cars generally come with much higher insurance rates due to their expensive repair and replacement costs. If lower insurance premiums are your goal, opt for a reliable, mid-range car instead.

Research Before You Buy

Before deciding on a car, it’s smart to get insurance quotes for the models you’re considering. This can give you a clear picture of how much you’ll be spending each month on insurance and help you make a more informed choice.

Bundle and Save

One of the best ways to save on car insurance is to bundle your policies. When you combine your auto insurance with other coverage, like homeowners insurance or renters insurance, you can unlock a multi-policy discount. Plus, having one provider for all your insurance needs can make your life much simpler.

Conclusion

While several factors go into choosing the right vehicle —like performance, style, and features — considering how insurance rates by car make and model vary can help you save money in the long run.

When you’re ready to insure your new ride, don’t forget to explore cheap car insurance options with Mercury. We can tailor a policy that fits your needs and budget, ensuring you get the coverage you need without breaking the bank.

Contact us today for a fast, free quote!