October 1, 2002
Many consumers don’t understand variables that affect cost of auto insurance
Mayfield Village, Ohio – A survey by Progressive Insurance Company, the fourth-largest auto insurer in the U.S., reveals that many drivers don’t realize that the type of car they buy affects the cost of their auto insurance. According to the online survey, more than one in ten consumers think that the cost of auto insurance would be about the same regardless of the type of car they purchase or lease.
The survey found that consumers believe that vehicle colour (42 percent of consumers), sunroofs (29 percent of consumers), tinted windows (26 percent of consumers) and stereo speakers (12 percent of consumers) influenced rates. The fact is none of these directly affect auto insurance rates at most companies.
However, when it comes to which vehicle characteristics do influence insurance rates, the survey found that many consumers did not realize that the weight of the vehicle (37 percent of consumers), the cost of the vehicle (16 percent of consumers), the body type, that is, four-door versus two-door (11 percent) and whether or not the vehicle is a convertible (nine percent) can play a role in determining rates.
In general, the more expensive the vehicle and the heavier the vehicle, the more it can cost to insure. In addition, two-door vehicles, including convertibles, can also cost more to insure than four-door sedans.
“Auto insurance companies are in the business of predicting future losses or accidents. They use information about you, your vehicle and the accident experience of customers like you to calculate a price that will cover the cost of those future accidents. And because each company has had slightly different experiences with drivers and accidents, prices will vary from company to company. So if you’re buying or leasing a new car, shop around for auto insurance,” said Toby Alfred, site manager, progressive.com.
In order to understand what consumers consider when buying or leasing a new vehicle, the survey also asked what they thought to be the most important factor when buying/leasing a new vehicle. Eighteen (18) percent of consumers said vehicle performance and 12 percent said it’s important to buy a vehicle that reflects a lifestyle (family, single, sporty). Also, women (23 percent) were more interested in safety features than men (13 percent), while men (23 percent) were nearly twice as likely than women (12 percent) to list vehicle performance as a primary factor.
When asked what safety-related or environmentally friendly options they would be willing to pay more for, 39 percent of consumers said they would pay more for a vehicle that ran on electric or solar power and 67 percent would pay more for a vehicle that warned them another vehicle was in their blind spot. Also, consumers said they would pay more for a vehicle that had better fuel efficiency (84 percent) or woke them up if they fell asleep behind the wheel (44 percent).