Expensive car equals expensive premiums
Sometimes there is an easy answer to this question! This photo was sent to the Arrive Alive website with the title “Recession? What recession?” This vehicle is described as a Mercedes Benz owned by an Abu Dhabi oil billionaire, featuring the newly developed V10 quad turbo with 1,600 horsepower and 2800nm of torque, 0-100km/h in less than 2secs, 1/4 mile in 6.89secs and running on bio fuel. The vehicle is dressed in WHITE GOLD!!
I am not much of an exotic vehicle expert – but very much aware that the insurance on this vehicle will be on the expensive side! Exotic cars are very fast super sports cars, very rare, very exceptional, very expensive and true traffic stoppers!
So which factors are considered to calculate the insurance premium on exotic cars and why are these premiums so expensive?
The following distinguishing factors are important:
- Exotic sports cars are insured to a higher amount because of their higher value in the market.
- Sports cars are usually for pleasure driving and are normally driven more aggressively and are prone to more dangerous and harmful accidents than others.
- The age of the driver, the driver’s driving records, and accident history.
- A driver with an accident history will have to insure at a higher rate.
- If the driver has been convicted of a motoring offence such as speeding or driving while under the influence, then the insurance will cost even more – especially if the licence was withdrawn.
- Driving experience counts! It counts a lot.
- Analysis on how expensive it is to repair each model. The more costly the parts, the higher the policy.
- Apart from features such as engine size, the availability of cheap spares, and the difficulty of repair will influence the premium.
- Foreign brands with parts from afar, would necessitate a higher premium.
- Modifications to a vehicle also increase perceived risk, because modifications make cars unique, and the farther a given vehicle is from the standard tables of tests and measures, the less able insurance analysts are to predict how it, and the people within it, will fare in a crash.
- Specific safety features might determine if a vehicle qualifies for a safety discount.
- Detail as to where the car is garaged, with urban areas considered a higher-risk.
- A secure parking area, preferably one that keeps the vehicle out of sight and under cover reduces the risk and lowers the premiums.
- It is important to note how attractive the vehicle would be for thieves – An expensive car with a good security system including an alarm and window etching etcetera will be less likely to be stolen.
- Expensive gadgets such as an expensive audio system or satellite navigation will attract greater interest from potential thieves.
I doubt whether I would ever be able to purchase an exotic sports car, hence no fear on my part for expensive car insurance premiums. The good news for these vehicle owners is that if you can afford to pay a vehicle like this – you should not have sleepless nights about insurance premiums!
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