What makes luxury cars more expensive to insure? 

What makes luxury cars more expensive to insure? 

If you’ve ever bought a luxury sports car, then you know that finding cheap insurance rates for a luxury car is difficult. Luxury cars can cost hundreds or thousands of dollars more to insure than ordinary cars. If you want to know why luxury cars are more expensive to insure, and what you can do to save on luxury car rates, read on. 


What cars are considered sports cars for insurance? Cars that qualify for the luxury sports car class have modified engines for speed, are produced by a known sports car manufacturer — think Lamborghini — and have the typical body build of a luxury sports car, usually a sleek, two-door design. 

Luxury Cars are Built for Speed
One of the number one reasons that makes luxury sports cars more expensive to insure is that the design of a luxury car makes it prone to crashing. Luxury cars are built for speed, which doesn’t translate well to driving on normal roads or with traffic. Why? 

Luxury car drivers may take turns too fast or weave in and out of traffic at a high speed. Sometimes, luxury car drivers don’t even realize they are driving too fast, as luxury cars are built for a smooth ride. Driving faster in a normal car may jolt the driver around or they hear their engine straining, but these warning signs aren’t usually present in a luxury sports car. 

Even if you are a perfect driver, insurers are aware of the tendency of luxury cars to crash and raise rates accordingly. The higher insurance rates on luxury sports cars also help offset costs if insurers are stuck with an expensive bill after an accident.  

The expense of repairs is usually because unlike an everyday car made by a manufacturer like Honda, parts for luxury cars are not mass-produced. The lack of availability of repair parts and the more expensive price tag on custom-made parts mean insurers charge more to cover losses if you ever crash your car or get a dent on your bumper. 

Safer Luxury Sports Cars are Cheaper to Insure
Now that you know why luxury sports cars are more expensive to insure, it’s time to talk about what you can do to save on your luxury sports car’s insurance policy. One of the first things you can do is check your luxury car’s crash test ratings and liability losses. 

If both of these things rank poorly, choosing a different car will improve your chances of getting a cheaper policy. 

Good crash test ratings mean you are less likely to be injured in a crash, which means insurers will have to pay less for your medical bills if you do crash. 
Good liability losses also mean your car model is less likely to crash and damage others’ property or injure them. 

While the Insurance Institute for Highway Safety (IIHS) did a study on sports cars and found that none of the sports cars met their criteria for Top Safety Pick awards, it is in the driver’s benefit to find a sports car that is safer than other sports cars. 

Buying a safer, affordable car can still make you look rich but without the hefty price tag and high-risk. 

Even just upgrading to a new model year of your luxury car can be beneficial, as sports car manufacturers are always making improvements in safety features. For example, a 2010 model may not have a backup camera and anti-fog headlights, but a newer 2018 model may have been upgraded to include these anti-crash features. 

Upgrading to a newer model could mean a better discount for the available safety features, especially if the newer model has been crash tested and did well. 

Check for Luxury Car Insurance Discounts
Vehicle safety features can earn you a discount, but so can a good driving record, having multiple policies or vehicles at an insurer, paying your bill in full, and dozens of other discounts. On average, insurers offer about thirty discounts which provide simple ways to save on car expenses

Make sure to familiarize yourself with the offered discounts at your provider, so you can make sure you are qualifying for as many discounts as possible. 

Some discounts can save you as much as 25 percent, so you don’t want to miss out on a discount you didn’t know was available. For example, sometimes insurers offer an accident forgiveness plan if you have a clean record or pay a small amount to join their accident  forgiveness program. 


With this program, if you get into an accident, your rates won’t rise. This can save you hundreds, if not thousands of dollars, in the long run. However, not all of these accident forgiveness plans and other important discounts are readily advertised, so make sure you directly ask your insurer what discounts they have. 

Compare Quotes to Find Cheaper Insurance
The last and final tip for saving on expensive luxury car rates is to shop around for rates every year. Car insurers are always in competition with each other and constantly offering deals to undercut other insurers. Getting quotes ensures you are getting the cheapest rate possible in your area. 

Of course, this may be hard if you are looking for exotic cars to gift your teenager, as teens will have high rates regardless of how many quotes you search for. Still, even if you have a high-risk driver or other marks on your record, it is possible to save a little by shopping around. 

A word of caution when shopping for quotes, however. Don’t sacrifice coverage for cheaper rates. If you get into an accident with your luxury car, having poor coverage will cost you more than paying extra for a great coverage plan. So shop to find cheaper rates, but make sure that the reason the coverage is cheaper isn’t because of poor quality. 


While owning a luxury sports car may give you sticker shock when you purchase an insurance policy, don’t despair. While luxury cars will always be more expensive than owning an ordinary sedan or minivan, there are plenty of ways to cut back on insurance costs for your luxury car. 

Buy a safer model, ask your insurer about discounts, and shop around for quotes to make owning your luxury car a joy and not a financial headache. 

Rachel Bodine writes and researches for the car insurance comparison site, CarInsuranceComparison.com

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