As you search for a new or used vehicle, you might stop and look over a hybrid car. With their sleek builds and high kilometers per gallon, hybrid cars look like the ideal way to save money on gas and protect the environment at the same time. It’s a win-win situation, right?
However, if you have a tight budget, a hybrid’s initial price tag might scare you away. And even if you can afford the initial purchase, the insurance premiums could make a significant dent in your wallet, counteracting any savings you may have saved on fuel.
Just what makes insuring a hybrid so expensive? What can you do to get a lower premium?
Factors Specific to Hybrids
Insurance rates and premiums depend on multiple factors. Some of these factors include:
Hybrid cars use cutting-edge engines with state-of-the-art electronic components. Because of their complexity, hybrid cars require specialists to maintain and repair these key parts. Some estimate that it costs almost $200 more to repair a hybrid once it has been in an auto accident.
This might not seem like a lot to you, but insurance companies have to account for thousands of vehicles. If each were involved in an accident, the expenses could become astronomical. Because of this, many insurance companies hike up their rates for hybrid cars.
But don’t despair.
As more drivers turn to hybrid vehicles, more technicians will specialize in repairing hybrid vehicles. With time, the cost in labor will drop to about the same price as gas-fuelled vehicles.
As with labor costs, the cost of replacement parts for hybrid vehicles is often higher than other cars on the market. Compared to gas engine vehicles, hybrid cars and trucks are still relatively new. This means that scrap yards have a limited supply of aftermarket parts. As a result, repair technicians often have to increase prices for used parts, or (more often than not) rely on completely new parts to repair the damage.
These higher bills go straight to your insurance company, so it’s understandable that they’d increase the premiums to cover the costs for a new “replace oxygen” sensor or missing gas cap.
Much like gas-fuelled cars, some hybrid car makes and models are more expensive than others. For example, the 2014 Honda Insight Hybrid only costs $19,515 (USD), while the 2014 Vokswagen Touareg hybrid costs as much as $64,745 (USD).
While more affordable hybrid cars can have insurance rates similar to a gas-fuelled car, the more luxurious hybrids will have the higher rates. The more expensive the car, the more money the insurance companies will have to dish out to cover the cost of an accident. To cover the cost, they charge higher rates.
While some factors increase insurance rates, other factors can also lower them by a fraction. Many people view hybrid drivers as conscientious people less likely to get in an accident. They seem to be more mature and responsible behind the wheel, which insurance companies love. The safer the driver, the less money they have to spend.
Because of this stereotype, some insurance companies offer up to 10 percent discounts on premiums. So you’ll want to keep an eye out for these discounts should you decide to purchase a hybrid.
Factors Specific to You
In addition to those specific to hybrids, the following factors can impact your insurance premiums, whether you drive a hybrid or any other type of car.
Safer drivers cost insurance companies less money than reckless ones because they tend to be involved in fewer accidents. If you have a clean driving record, free of traffic and moving violations, you’ll likely have a lower premium than if you had collection of parking tickets stashed in your dash.
Younger drivers often lack the skills, knowledge, and maturity to properly handle dangerous situations. They are also more likely to speed and tend to neglect their seatbelts. This combination puts them at risk for accidents, which insurance companies frown upon. In fact, individuals 16-19 are more at risk of becoming involved in an accident than any other age group.
However, drivers between the age of 50 and 65 tend to get the best insurance rates. Drivers at this age tend to be more cautious, understand traffic laws, and take fewer risks while driving. This means fewer costs for the insurance company, and they pass those savings back to you.
While each province sets a minimum coverage level, it’s up to you as a consumer to determine if you should purchase additional coverage for your car. You could select minimum coverage to lower your monthly rates, but additional coverage could give you more protection if you become involved in an accident.
How Can You Get the Best Rates?
Because these factors play a significant role in your insurance rates and premiums, it’s important that you seek advice from a professional insurance agency to get the best rates and deals. Some insurance brokers can offer various packages that will balance coverage with cost. With the right company, you can enjoy the benefits of a hybrid, without sacrificing your savings to cover your premiums.
For more information on insurance premiums, rates and car insurance in Calgary, Brooks & Medicine Hat call TSG Insurance & Financial Services Ltd today or visit one of our three locations:
Calgary Insurance: 403.526.3283
Brooks Insurance: 403.501.5123
Medicine Hat Insurance: 403.723.9416