Luxury vehicles are typically the most expensive cars to insure. We at the Guides Auto team will explain why luxury car insurance rates tend to be much higher than average and what factors affect those costs. We’ve reviewed the best car insurance companies in the country, and we’ll offer recommendations on where to start when shopping for luxury car coverage.
Why Is Luxury Car Insurance More Expensive?
Luxury cars are typically high-performance vehicles with more amenities than standard vehicles. They tend to have much higher price tags than regular cars. A 2022 Mercedes-Benz C-Class sedan, for example, has a starting manufacturer’s suggested retail price (MSRP) of $43,550. To compare, the starting MSRP for a 2022 Honda Civic is around $23,000 — almost half of what the Mercedes costs.
Like with any vehicle, you’ll need to carry the state-minimum liability coverage to drive a luxury car legally. Because you have a more valuable vehicle, you should expect to pay higher insurance premiums than you would for a regular car.
You’ll likely be able to find coverage from most major providers, but it may be worth getting quotes from companies that specialize in insuring sports cars, convertibles and other high-value types of vehicles.
How Do I Get Luxury Car Insurance?
The process for getting luxury car insurance is the same as getting coverage for a regular vehicle. You’ll begin by comparing car insurance quotes from a few providers, and then you’ll select the coverage you want.
When getting a quote, you’ll need to provide the following information:
- Vehicle details such as year, make and model
- Address and contact information
- Your age
- Marital status
- Driving history
- Credit history
Once you’ve provided your information, either in an online portal or directly to an insurance agent, you’ll receive a quote. From there, you can select your provider and policy.
How Much Does Luxury Car Insurance Cost?
Insuring a luxury vehicle is typically more expensive than insuring a standard car. Below is a table that shows the average annual rates for a full-coverage car insurance policy for a few popular luxury cars.
*The Tesla Model Y was released in 2020.
The national average for full-coverage car insurance is $1,730 per year, and as evidenced in the table, luxury car insurance rates can often be quite a bit more. A 2022 Tesla Model 3, for instance, costs about 85% more than the national average to insure.
Cheapest Luxury Car Insurance
In the sections below, we’ll highlight the cheapest luxury car insurance rates for each of the models we introduced. The annual averages in each table are based on the driving profile of a 35-year-old with good credit and a clean driving record. These averages are for a full-coverage auto insurance policy.
The tables are sorted by the cheapest insurance companies for the 2022 model year. To give you insight into the average insurance cost of previous model years, we’ve also included those rates in the tables.
Based on our research, USAA tends to offer the cheapest insurance rates for luxury cars. Note that USAA policies are only available to current members of the military, veterans and their families.
Here is a table with average annual full-coverage rates for five model years of the BMW X3.
Below is a table with average annual costs for insuring five models of the Lexus RX.
Tesla Model 3
The table below shows average annual insurance rates for five models of the Tesla Model 3.
Tesla Model Y
The Tesla Model Y was not available until 2020. This table shows annual rate averages for each available model.
Factors That Affect Car Insurance Rates
When calculating auto insurance quotes, agents weigh a number of factors. Because these factors are highly variable, your car insurance quote is almost guaranteed to be different from anyone else’s. These are the factors that determine your car insurance rates:
- Location: If you live in an area with high rates of theft or car accidents, you may pay more for insurance coverage.
- Age: Younger drivers and drivers over 65 are considered higher risk by insurers, so they pay more for car insurance.
- Driving record: If you have any traffic violations, at-fault accidents or DUI convictions on your record, you can expect to pay higher insurance rates.
- Credit history: Drivers with good credit scores tend to pay less for coverage than those with poor credit.
- Gender: Male drivers are more likely to get into car accidents, so they tend to pay more for auto insurance.
- Marital status: Single drivers typically pay more for insurance than married drivers.
- Vehicle: More expensive vehicles cost more to insure.
In many cases, you’ll be able to choose the deductible on your insurance policy. If you opt for a higher deductible, you’ll have a lower premium and vice versa.
Additional Luxury Car Insurance Options
Because your luxury car has added features and more expensive components, you may want to consider additional types of coverage to ensure your vehicle is completely protected.
Collision and Comprehensive Coverage
A full-coverage policy generally includes collision and comprehensive coverage, but it’s worth making sure. Experts recommend drivers carry both types of insurance if the premium is less than 10% of a vehicle’s value. Collision insurance covers repair costs after an accident no matter who’s at fault. Comprehensive insurance covers the cost of damages from non-collision events like fire, theft or falling objects.
If you’re leasing or financing your luxury car, gap insurance (also known as loan/lease payoff) may be worth adding to your insurance policy. If your car is totaled or stolen and you owe more than the car is worth, gap insurance can help cover the difference. When you file a total-loss claim, the insurance company will pay out the actual cash value (ACV) of your vehicle. If the ACV is less than the remainder of your auto loan, gap insurance kicks in to pay it off.
Classic Car Insurance
Some insurers offer specific coverage to protect classic vehicles and exotic cars. Classic car insurance, sometimes called antique auto insurance or collector car insurance, has different requirements than standard auto insurance. These often include strict mileage limitations and a professional appraisal of the vehicle.
Uninsured/Underinsured Motorist Coverage
Depending on where you live, you may already have underinsured/uninsured motorist coverage included in your policy. This coverage helps pay for damages caused by a driver who doesn’t have auto insurance or has policy limits that are too low. Because luxury cars cost more to repair, you’ll want to make sure the vehicle is fully protected to avoid paying for damages out of pocket.
Luxury Car Insurance Rates: Conclusion
Luxury car insurance rates are typically higher than those for regular vehicles. Luxury car insurance is essentially the same as standard car insurance since you’ll need to carry whatever the state requires to legally drive. If you have an antique or exotic vehicle, you may want to look into classic car insurance.
Top Auto Insurance Recommendations
When you’re looking into luxury car insurance, it’s important to compare more than one provider. That way, you can get the best possible rate for your vehicle and situation. Below are two car insurance companies we recommend.
Geico: Affordable for Most Drivers
Geico offers some of the country’s lowest car insurance rates on average. In our industry-wide review of the top insurance providers, we found that Geico’s average rates are around 24% cheaper than the national average. In addition to its wide range of coverage options, Geico offers many discounts. Drivers who have safety features in their vehicles, practice safe driving habits or have new cars can all save money on their premiums.
Read more: Geico insurance reviews
Travelers: Most Coverage Options
Like most major car insurance companies, Travelers offers standard options like collision coverage, personal injury protection and liability insurance. The company also provides a large array of optional coverages, including accident forgiveness, gap insurance and two levels of roadside assistance. Policyholders can save money by bundling their auto coverage with another insurance product, such as homeowners or life insurance.
Read more: Travelers insurance reviews
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
In this article, we selected companies with high overall ratings and cost ratings. The cost ratings were informed by auto insurance rate estimates generated by Quadrant Information Services and discount opportunities.
**Data accurate at time of publication.