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Whether it’s the first vintage hot-rod or roadster you saw as a young kid, or a sleek sports car fit for the track, every car enthusiast dreams of the handful of cars they’ll keep in their garage. Some dream of luxury cars costing hundreds of thousands of dollars, while others long for a restored version of, say, their father’s station wagon, which will only add up to a few thousand on the used market. In either case, your best bet is to keep your cost of ownership low is to insure your cars for as little as possible. Fortunately, there are several options for owners who want to keep their valuables insured while not splurging money on their investment.
Insuring Classic & Collector Cars
The LA Times notes that “traditional insurance is based on the notion that a car’s value will decrease over time,” whereas classic car insurance assumes your value will appreciate over time. Most classic car policies assume your collector’s item is garaged and driven sparingly, so insurers calculate a much lower risk of accident, and subsequently offer lower rates and premiums than traditional auto policies.
Collector policies offer a handful of advantages over regular policies. By choosing a specialty insurance company, you’ll be working with an insurer who knows your vehicle’s worth and who also understand how to assess its value. Additionally, collector policies offer specialized coverage plans, so you won’t be paying more on top of what you need.
Stated value and agreed value policies are a great way to guarantee your classic car will be covered. American Collectors Insurance offers agreed value policies, and will work with customers to establish a car’s value based on photographs and specifications. An expert appraisal is recommended, but not always necessary.
How to Save Money on Classic and Collector Insurance
- Drop unnecessary coverage: If your museum piece is garaged year-round, American Collectors recommends dropping all coverage except for comprehensive. This will keep your beauty covered in case of theft or natural disaster, but you won’t be paying insurance for a road accident that will never happen.
- Limited mileage policies: If you only drive your classic car to car shows, weekend cruises, or parades, many insurers will offer plans based on limited mileage and easy driving. Since most auto accidents happen in traffic, bad weather, and commuting to and from work, your risk of getting T-boned on a weekend cruise is far lower than the average driver’s risk.
- Remove other drivers from the policy: If you know your teen driver won’t be learning to parallel park with your collector’s item, make sure they’re not assigned as a driver on the vehicle’s policy.
Insuring Luxury and Exotic Cars
Whether you’re driving a Porsche Panamera, BMW 7 series, an Audi R8, or a Mercedes CL600, your insurance premiums are probably through the roof.
Why are luxury cars expensive to insure?
Forbes.com notes that special construction materials like aluminum and carbon fiber, high-powered engines, or advance mechanical and electronic systems are the reasons behind high insurance premiums for luxury cars. Quite simply: When they need to be repaired, these cars cost a fortune to fix. And when it comes to replacing a totaled Bentley, your insurer knows they can expect to break the bank.
Why are exotic cars expensive to insure?
Aside from their high sticker price, exotic cars are statistically very likely to be involved in serious accidents. Convertibles pose a higher risk of serious injury than hardtop models; and the bigger the engine, the higher the risk of speeding and dangerous driving.
How to Save Money on Insurance For Luxury Cars and Exotic Cars
Many of the same principles of insuring classic cars apply: you can save on premiums by removing other drivers from the policy or by choosing a limited mileage policy. Here are a few additional tips to save on insurance:
- Follow up on tickets and moving violations, and keep them off your record. According to a survey conducted by Insurance.com, having a single ticket or moving violation can raise your insurance rates by 12 to 22 percent, depending on the nature of the infraction. It’s likely worth your time to spend a day in traffic school to have the infraction wiped from your record, or possibly pay an attorney to work to have it taken off your record.
- If you can afford it, pay for minor damage out of pocket: Most insurers treat at-fault accident claims with the same rate increase as a traffic violation. Let’s do the math: If you’re paying $2,000 per year for insurance on your high-end vehicle, a 20% increase over three years will cost you at least $1,200, not to mention the cost of your deductible and the potential rate increases if you should cause another accident. As a rule of thumb, if the damage to your exotic or luxury car is less than $2,000 or $3,000, you should pay the repair bill yourself.
- Raise Your Deductible: Higher deductibles mean lower rates, since your insurer knows it won’t be shelling out as much in case they have to pay for a claim. Choose the highest deductible you think you can afford, or set aside a savings fund for your deductible payment, and raise your deductible as the savings fund grows.
- Anti-theft devices: While most luxury cars have built-in anti-theft devices, some exotic sports cars are so stripped down to bare essentials, they might not have any sort of built-in theft deterrent or tracking device. Many insurers offer discounts if this accessory is added.
- VIN registration and etching: According to Daily Finance, having your vehicle’s VIN etched into your car’s windows can lower your comprehensive coverage rates by as much as 5%. Particularly for theft-proof or bullet-proof glass panels, which can cost upwards of $2,000 each, this is a great deterrent and tracking feature to prevent theft or recover stolen goods after the fact.
- Choose your next car wisely: Certain models cost more to insure than others, even where the same performance, luxury, or extra features are available. Check with your insurer to get rate quotes before you settle on buying your next luxury or exotic.
Keep An Eye On Your Investment
Whether your garage is filled with high-performance exotics, luxury barges, or classic collector items, you can benefit from keeping an eye on your investment, and your insurance coverage. Ask your insurer or shop around to see if your vehicle qualifies for any special collector policies, or if its value has appreciated or depreciated over time. Additionally, if you change your driving habits or find a new weekend ride to replace the aging roadster, see about reducing your coverage on the collector cars you no longer drive. As always, make sure your insurance matches your ride, and make sure both your cars and your insurance are top quality.