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How does the car you buy impact your insurance rate?


Big and New, or Small and Old?

Less flashy cars can be more expensive to insure for a few reasons. According to the National Insurance Crime Bureau, the top three most stolen cars in 2010 in the United States were mid-priced sedans from the early 1990s [source: CNN Money]. A car like the 1995 Honda Civic, for example, is easier to steal (less likely to have a car alarm), and there's a thriving market for the parts. This phenomenon isn't limited to the United States, either. The most stolen car in the United Kingdom in 2011 was the Ford Transit, a panel van that looks good to thieves due to the easy sale of its spare parts and its value as scrap metal.

Older, more reliable cars are also typically the first car for a young driver -- and young drivers get into more accidents than older ones. Cars that appeal to younger drivers could end up costing you almost as much in insurance rates as a sports car because of the accident factor, too. Yes, popularity makes a difference.

But does this all mean that the insurance premiums for somebody driving an oft-stolen older car will be higher than if he bought a brand-new Cadillac Escalade? Probably not. The Escalade remains one of the most-stolen, new model year vehicles. Not only is it a large, expensive luxury vehicle, but it's also high-profile. Luxury cars also cost more to repair and replace if you're driving one and get into an accident -- and even more so if they're loaded with pricey, high-end features.

So an expensive car will probably raise your insurance rate, but so will a fast car. A little two-seater roadster like a Mazda Miata is less expensive than an Escalade. It's also designed specifically for speed, being light, small and easily maneuverable, and there are also lots of ways to upgrade it to make it go even faster. Statistically, you're more likely to speed when you drive a sports car. And get speeding tickets. And drive recklessly. And get into accidents. Yep, that equals higher insurance rates.