Is that luxury car worth the insurance cost?

Images by Getty Images; Illustrations by Bankrate

What would you do if you win the lottery tomorrow? “Buy the car of my dreams” is the general answer. That makes sense. Luxury cars are more than just a status symbol. They can also be more comfortable, visually appealing and enjoyable to drive. But when buying a luxury car, it’s not just the advance purchase price you need to consider. Ongoing expenses, such as car insurance costs, can make you think twice before you acquire ownership of a luxury vehicle.

Luxury car owners can pay $1,000 per year for insurance

According to a Bankrate study, the average cost of car insurance is $2,678 a year, but if your car is more valuable, you can pay more to guarantee it.

Using the latest premium data from Quadrant Information Services, we looked at the average full coverage premium for 15 popular luxury cars, from basic Acura SUVs to high-speed sports cars such as the Porsche 911 and Tesla Model S. They then combined an equivalent mass market model that shares some of the same attractive characteristics as each luxury vehicle.

On average, the 15 luxury car owners we considered paid $1,223 a year for full coverage insurance compared to owners of mass market competitors. In some cases, luxury buyers were standing to save nearly $3,000 a year by choosing non-luxury alternatives.

Luxury model	Average Full Coverage Premium	Mass market alternatives	Average Full Coverage Premium
Acura Rdx	$2,426	Honda CR-V	$2,245
Audi A4 Quattro	$3,241	Toyota Corolla	$2,387
Audi Q5	$3,023	Mazda CX-5	$2,288
BMW M4	$4,863	Sval fast	$3,144
BMW X5	$4,759	Jeep Grand Cherokee	$2,700
Cadillac Escalade	$3,703	Chevrolet Taho	$2,682
Infiniti Q50 Luxe	$3,617	Nissan’s Versa	$2,747
Jaguar F Pace	$3,270	Volkswagen Tiguan	$2,283
Land Rover Range Rover	$4,030	Toyota 4runner	$2,429
Lexus RX 350	$2,882	Toyota Highlander	$2,547
Mercedes-Benz C300	$3,565	Honda Civic	$2,640
Porsche 911	$5,294	Mazdamyata	$2,462
Libian R1	$4,258	EV6	$2,918
Tesla Model S Lattice Shape	$5,435	Ford Mustang Mach-E	$3,365
Tesla model y	$3,771	Hyundai Ionik 5	$2,956

We focus our analysis on a wide range of popular luxury cars, but some luxury cars may have even higher premiums. For example, exotic sports cars like Ferrari and supercars like Lamborghini are very expensive to guarantee, as many standard car insurance companies don’t cover them. Also, when purchasing a rare or collector’s car, you may be considering sudden prices and specialized coverage.

The bankrate staff weights are as follows: Are luxury cars worth the cost of ownership?

We spoke to three bankrate staff who purchased a luxury car about the purchase. All three agreed that the costs of insurance are manageable, but one staff member loves her luxurious ride, while the other two found that the other costs of ownership, especially the maintenance costs, have gained more trouble than the value of owning a luxurious vehicle.

“I bought the 2023 Tesla Model 3 about a year and a half ago! I’m worth 1 million percent. All sensors/camera/automated driving features were very helpful and significantly reduced the trend in collisions. The amount (I’m 26 years old and I’ve combined cars over the last five years) but I don’t know how it will compare, but insurance costs didn’t warn me too much!”

“I bought a used Lexus LC500 in 2021 for $79,000. It was 2018 with 12,000 miles. The original MSRP was $115,000. The model launched in 2018 quickly became a dream car and I couldn’t buy it, so I quickly justified my own purchase. From here.

Well, because of the cost…some people were expecting it, but some surprised me. It wasn’t surprising: annual tax: ~$1,000. Monthly Payment: ~$900; Monthly Insurance: ~$200

Three months after purchase I learned that the dealerships for the used car that sold it to me didn’t have the proper alignment (only for Lexus dealers who can adjust all the parameters anyway), and the tire on the right was taken. There’s nothing like tire spinning in a high-end RWD sports car, so you’ll need a new set of four tires, which costs $2,400. So I’ll continue this normal maintenance for the next three years or so, although outrageously expensive. ”

“I bought a Mini Cooper. Between gas and maintenance/repairs, I don’t buy it or buy premium/luxury cars. Insurance wasn’t that bad, but that’s because my mileage is so low (work from home). All repairs are more expensive. (I know, I know, I know), I can make some kind of budget for all the typical maintenance and repairs at this type of car and its average cost.”

Conclusion

Buying a luxury car always costs more, but owning a luxury car might outweigh the steep price tag of costs like insurance. Like all major purchases, this decision comes down to your personal priorities. We recommend that you follow these steps to guide your selection:

Please revisit your transportation budget: In 2023, transportation accounted for around 17% of consumers’ monthly budgets. Look at your current expenses and consider whether you are ready to spend more space within your budget on car payments, insurance and other expenses.
Do your research: We gather as much information as possible about the car you want to buy, from Carfax and Clue reports to reviews and personal accounts from current and previous owners. The more information you need to build, the more you will be able to know what’s in your financial situation.
Analyze the appeal of luxury cars: Depending on why you want a luxury car, you may be able to find some of the things you are looking for in a cheap vehicle to guarantee. Many of the perks of luxury car, including appearance, speed, creature comfort, and manual transmission, are found in certain mass market models.
Shop for an insurance quote: Not all insurance companies deal with luxury cars the same. By shopping and finding a provider whose prices and customer service meet your needs, you may be able to measure whether a luxury car fits into your life.