How the type of car you own affects your auto insurance rates

Car insurance providers take several factors into consideration when they are determining weather or not to insure you. Besides your age, location, and driving history, car insurance companies will also look at the type of car you drive. Each vehicle falls into a "vehicle classification" system. The vehicle classification system basically refers to the type of car and what the car is used for. Generally the vehicle use classification system is broken down into the following categories:

• Artesian
• Business
• Commercial
• Commute
• Personal or Pleasure

Artesian auto insurance refers to people who have a profession that requires them to use their vehicle for storage. Typically painters, carpenters, electricians and plumbers fall under the artesian classification.

Business auto insurance refers to people who need to use their personal cars for work-related reasons, but do not use them for storage like artesian auto insurance. Realtors or people who have company cars fall under this category.

Commercial classification refers to vehicles that are heavily used and meant exclusively for work related purposes. Construction vehicles and dump trucks typically fall into this category. The insurance of commercial vehicles tend to be pretty expensive compared to other classification systems.

Commute is the most popular type of vehicle classification. Students generally use this classification if they have to drive to school. Commute refers to vehicles that are used to get to and from work, but are not actually used for work.

Personal or pleasure vehicle classification is for all the other uses of a vehicle. Running errands, going shopping, dropping the kids off at school are all part of personal or pleasure use. These vehicles will be given a lower insurance premium if you have more than one set of wheels insured through the insurance company.

Car insurance rates will vary upon the above factors and many other things. Of course you already know the auto insurance company will ask to review your driving history, the type of vehicle you drive, the location you are in, how many miles you expect to put on your car in one year, your credit history and the safety features included on your car. The more safety features your car includes, the better auto insurance rate you can expect to obtain. It is the same with your driving record; you will get a better rate if you have a spotless record from someone who has multiple tickets. Did you also know that auto insurance companies will also consider the sticker price of the car you drive, the replacement value, and the consumer crash rating reports? Some cars are just cheaper to insure than others, here is a listing of the top 10 least expensive vehicles to insure, according to the Highway Loss Data Institute:

1. Oldsmobile Silhouette
2. Pontiac Montana
3. Saturn L Series Wagon
4. Chrysler PT Cruiser
5. Saturn L Series Sedan
6. Chevrolet Venture
7. Chevrolet Astro
8. Saturn Vue
9. Jeep Wrangler
10. Oldsmobile Bravada
There are other car models that are cheap to insure based on other factors like theft, injury, and collision claims. Most insurance companies will easily insure larger cars and trucks for a lower rate because they do not do heavy damage to other vehicles in an accident. If you are found at fault for totaling another person's vehicle, your rates could double or triple. With the fluctuating economy, the cost to insure specific makes and models of vehicles will change with time. A brand new vehicle will always be more expensive to insure than a 5 year old vehicle. Based on maintenance and repair costs, insurance companies will determine how durable and dependable the vehicle is.

Though your driving history will play the biggest factor in your ability to insure you vehicle, the type of car you drive will pay a large role. If you are classified as a risk by the auto insurance provider, you will be facing a higher cost and if you drive a vehicle they classify as a risky car, you will be paying a higher premium. Luxury cars, sports cars, and four wheel drive trucks are all considered a high performance vehicle and they are tougher to insure. Here are the top 10 most expensive vehicles to insure:
1. Lexus IS 300
2. Land Rover Discovery Series II
3. Audi S4
4. Jaguar X-Type
5. Mercedes SLK Class
6. Lexus GS 430
7. Land Rover Freelander
8. Mitsubishi Montero
9. BMW X5
10. Toyota 4Runner

Now that you know why types of vehicles cost more or less to insure, you need to look at the other factors that determine your insurance premium. You need to know your local and state laws because depending upon the jurisdiction; the insurance premium may be a mandated number. If your premium is not mandated, it will be decided upon some other factors:

• Gender
• Age
• Distance

Starting with gender, men average more miles driven per year than women. Due to this, statistically, men are involved in a higher accident ratio. Women's lower accident involvement will balance out the surcharge of youth drivers. If you are a female driver, ask your auto insurance company about "the women's discount". Many people have raised complaints about this discount plan, but it is up to the individual insurance provider to determine if they want to honor this policy or not.

Age plays another important role in your auto insurance coverage. Teenage drivers cause many problems for several auto insurance companies. Many auto insurance companies will double the cost of your premiums if you insure a teenage driver. If you are going to insure a teenage driver, there are some things you can do to lessen the premium. First, help your teen maintain a spotless driving record. Obeying traffic laws and having a clean record will go a long way with an insurance company. The number one traffic violation for teenagers is speeding. Teach your teen to obey the speed limit and avoid speeding tickets. Insurance companies will award a clean driving record with lower premiums.

Second, search for an auto insurance company with a greater deductible. If you purchase a policy with a higher deductible, chances are the premium payment will be much smaller. Third, purchase a car that has safety features like air bags, alarm systems, and child security features. The more safety features your car has, the smaller the premium. Fourth, discuss a stand-alone auto insurance policy. A stand-alone policy will make your teenager responsible for their own insurance. This means they will only be allowed to drive during the daylight hours until the auto insurance company allows them to drive at other times. It is also required for your teen to attend driving school and obtain a driving certificate. By purchasing a stand-alone policy, you are teaching your teen responsibility. Many parents even have their teen pay for half, if not all, of the auto insurance. Discuss this with your teenage driver and come up with something that is fair for everyone. Generally, insurance premiums will become lower when you reach age 25. Senior drivers are often given a discount for having a good driving record.

Distance is another important factor in determining the cost of your insurance premium. Several car insurance providers rely on a reasonable estimation of the average annual distance you expect to put on your vehicle. If you do not drive your vehicle on a frequent basis, you can expect to save a good amount on your auto insurance policy. Some insurance companies will base this figure off an odometer-based system. The odometer-based system charges cents per mile. The auto insurance provider will evaluate your risk factors and then determine how many miles you are allowed to drive per year. This type of auto insurance can be pretty expensive because you will be required to buy prepaid miles of insurance protection. It is similar to buying gasoline. This can be an honest policy as you are in charge of keeping track of your miles, and you must report to the auto insurance provider if you need to purchase more. Unfortunately some people have devised odometer cheating systems and can reset the odometer without paying for the extra miles they have driven. Unfortunately, this cheating method will catch up with you someday because you will be constantly resetting the odometer to keep under the mileage requirement. Odometer tampering can be detected during claim processing and will be punishable by heavy fines and jail time.

To combat some of the distance issues, auto insurance companies like Progressive have begun GPS-based systems and OBDII-based systems. By installing a GPS device in your car, Progressive will provide you a discount because this device tracks your driving behavior and reports to Progressive directly. The OBDII-based system allows you to earn discounts on your premiums by connecting to TripSense. TripSense will connect to an On Board Diagnostic system and report your driving behavior to Progressive. If you disconnect the device, your discount will be forfeited.

No matter what type of car you drive, you should always obtain quotes from at least 3 auto insurance providers to gain a proper understanding as to how much money it will cost you to insure your car.