Are Luxury Cars More Expensive to Insure?

Congratulations! You just bought a new Jaguar vehicle! Now you need to insure and register it with Ohio so you can get the right license plates. If you’re ready to shop for insurance, you’ll need a policy that fits your budget and the vehicle you bought for your Akron and Cleveland drives.

Yes, luxury cars are more expensive to insure because of how new vehicle insurance works. The expert team at Jaguar Akron goes over luxury car insurance and the reasons why luxury cars are more expensive to insure compared to less expensive cars.

Why Are Luxury Cars More Expensive to Insure?

Simply put, luxury cars are more expensive to insure because they have a higher value. Vehicle insurance is based on the value of a car. So, if you’re choosing between two Jaguar vehicles and one costs $75,000 and one costs $85,000, the one that costs more means higher insurance premiums. 

Your luxury car insurance policy must cover the entire value of the vehicle. New vehicles are easy to insure because a car insurance company knows the precise value of the vehicle you buy.

What Type of Luxury Car Insurance Should I Purchase?

You’ll need to purchase the minimum amount of luxury car insurance as required by law to prove you have full financial responsibility for the vehicle. In some states, that means liability insurance to cover any accidents that you might cause in the course of owning your Jaguar. 

However, your financial institution that provides financing for your purchase may have higher requirements, such as comprehensive coverage. A comprehensive luxury car insurance policy covers any possible damage that can occur, even from another driver.

Will Luxury Car Insurance Pay Off a Car Loan If the Car Is Totaled?

As the car depreciates, you need to realize one thing: The value of the car may go below the remaining value of the loan at some point. Therefore, the insurance policy may not pay off the remaining balance of your auto loan if it happens to be totaled while you own it.

Many factors may go into the value of a pre-owned vehicle. It depends on the popularity of the car, supply and demand, the condition of the engine, the overall condition of the vehicle, the location where it might be sold, and the mileage on the engine, among other considerations.

As another example, after two years of owning your Jaguar is worth $50,000 yet you owe $55,000 on the vehicle loan. If, in the unfortunate event that your car is totaled, you would still owe the balance of the loan at $5,000. GAP insurance can help you cover this difference.

Test Drive Your Next New Jaguar at Jaguar Akron

Ready to take the next steps? Contact us or call 234-206-2525 to schedule a test drive with our dealership. In the meantime, apply for financing to jumpstart the car-buying process. Our team is happy to help in any way we can if you’re buying a new vehicle near Pittsburgh or Columbus.