So you have been thinking about buying a new SUV. You have considered the extra cost of gas and have decided you can live with that. Have you thought about the cost of insurance on a new SUV? It will be higher than a small economy car, but that doesn’t mean your dream of owning a new SUV is lost. It just means you have to check into different ways of affording the insurance premium.
Why Is SUV Insurance Higher than Cars’?
The answer to why SUV insurance is higher than smaller cars’ is partially due to the size of an SUV. An SUV is larger and heavier than a car. Insurance companies take into consideration that the SUV will cause more damage to other vehicles and property when it is involved in an accident. In short, an SUV accident will cost the insurance company more money.
An SUV costs on average nearly 20 percent more than a car. The insurance company will have to pay out a larger sum if the vehicle is destroyed. Even if it is involved in a small accident, the repair costs will be more expensive, too. The insurance company is at risk for paying out higher claims, so they charge more to insure an SUV.
Tips for Affording the Insurance
Before you purchase that dream SUV, contact your insurance agent for a quote. The SUV you want may have too high of an insurance quote for you to afford. If that is the case, perhaps you can down-grade and choose a less expensive model of an SUV.
Did you know that your credit rating might affect how much you pay for insurance? Insurance companies assess penalties for having a low credit rating. They think that if you do not show responsibility in taking care of your bills, you may not pay your premium, or you may be irresponsible in your driving habits.
If your credit rating is less then perfect, take some time to raise your credit score before you consider buying a new SUV. That may help to get the insurance to a more affordable level. If you have to finance the new SUV, a higher credit score will earn you a cheaper interest rate, too, so it is a win-win situation.
We would all love to have all the “bells and whistles” options that are offered on new SUVs, but we don’t really need them. A decked out SUV drives the cost up, and thus increases the cost to insure it as well. Decide which options you can live without, and see if that makes insuring the new SUV more affordable.
Ask your insurance agent which options will give you an insurance discount and be sure they are included in the purchase package of a new SUV. Do your homework before you buy the SUV. You may decide that buying a new SUV is not an option right now, because you cannot afford to insure it. Remember that if it is financed, it will have to have full coverage insurance until it is paid for.