Most states require that automobile owners hold car insurance if they want to drive legally. But you might wonder if the same rules apply for exotic cars. Auto insurance for exotic cars works differently than regular car insurance.
What Qualifies as an Exotic Vehicle?
The definition of an exotic car is up for debate. There is no single description, although you can read through the characteristics below to determine whether your car is exotic. Some people refer to exotic car insurance as “collector’s insurance.”
Most luxury or exotic cars have a purchase price of more than $100,000. If you bought your car for less than that, no matter how special it is to you, it’s probably not an exotic car. An entry-level sports car is not usually considered to be an exotic vehicle. However, insuring a sports car might cost you more than insuring a minivan.
Some other characteristics of an exotic car include:
- Emphasis on high performance
- Unique design
- Top-notch materials
- Fast
- Manufactured in limited quantities
Exotic cars usually prioritize performance over comfort. You probably wouldn’t buy one to shuttle your kids to soccer practice. The vehicles are often more expensive to maintain than standard cars. They also require a different type of insurance than other types of vehicles.
Why Do You Need Special Insurance for Exotic Cars?
Most standard cars drop at least 10 percent of their value in the first month of ownership. The longer you drive them, the less they’re worth. That’s great for insurance companies. The longer you go without an accident, the less they’ll have to shell out if you do get in a wreck.
The average car continues to depreciate with time. Driving puts wear and tear on the vehicle, and an older car is more likely to have mechanical or aesthetic problems than a brand-new automobile.
Luxury cars hold their value better than standard vehicles. Exotic cars usually go up in value if you keep them in mint condition over time.
That’s because most manufacturers limit the number of exotic cars that they produce. Therefore, the demand outweighs the supply. Rare cars are more likely to become collectibles than, say, a Honda Civic.
Therefore, purchasing an exotic car is a different kind of investment than buying an SUV. Insuring it is also a completely different endeavor than covering a standard vehicle. You usually can’t call up the same company that covers your minivan to get a quote for a luxury car.
A qualified insurance broker can help you find the best auto insurance for exotic cars, and can also help you navigate the premium rates.
Exotic Cars List and Prices
An exotic car is a different type of investment than a family vehicle. You likely keep it in a protected location, don’t drive it every day and take care of it differently than you would a standard car. Your insurance should protect the high value of your car so that if anything happens to it, you’re protected.
To give you an idea of how much money you could use if you don’t insure an exotic car here’s an example of some exotic cars and their base prices:
- 2016 Audi R8 – $164,000
- 2016 Ferrari 488 GTB – $250,000
- 2016 Lamborghini Aventador – $400,000
- 2016 McLaren-AMG GT S – $131,000
- 2020 Aston Martin DBS – $300,000
- 2020 Audi RS6 Avant – $114,000
- 2020 Bentley Continental GT V8 – $200,000
- 2020 Bugatti Chiron Super Sport 300+ – $3.9 million
Steps for Getting Exotic Car Insurance
One of the first factors to consider when getting exotic car insurance is whether you’ll be basing the policy on the vehicle’s agreed value or actual value. The agreed value is typically determined by appraising the car and analyzing its specs and details. The actual value is the cash value of the car.
The value can vary depending on the vehicle’s condition. It’s generally more beneficial for the owner to purchase agreed value exotic car insurance. This is especially true if you’ve done additional work in your car.
You’ll typically need to take detailed pictures of your car’s interior, exterior, and engine. A representative from the insurance company may come to you in person to analyze the value and condition of the vehicle.
You should also have your car appraised by a third party. Providing an appraisal will help the insurance company come up with the agreed value.
Once you have purchased a policy, you should reevaluate your car’s worth annually. Your insurance policy should reflect the work that you do to keep your car in optimal condition. As the years go by, a well-maintained exotic car should increase in price.
Exotic Car Insurance Cost
The price of exotic car insurance varies widely. It’s not easy to find this information on the internet because exotic vehicles are so rare. That’s why it’s essential to work with an experienced insurance broker.
Common luxury cars usually command an insurance premium of $3,000 to $5,000 a year. Rarer, high-performance vehicles might cost $20,000 annually to protect.
Premiums are higher than those for standard cars because the value of an exotic vehicle is so high. But insurance companies also assume that someone who buys an exotic car engages in riskier behavior than the average person.
Even if you don’t drive your exotic car frequently, you need to protect it from theft, vandalism, and other losses. The ways that you store and use your car affect exotic car insurance costs.
You can reduce the cost of exotic car insurance premiums by taking a driving course that’s geared toward high-performance vehicles and opting for the appropriate levels of coverage. Shop around to make sure that you’re getting the best prices.
Some policies offer limitations that could reduce your premiums. If you choose a plan that limits your mileage or the number of drivers for the vehicle, you could be eligible for discounts.
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Opinions expressed in this article are solely the author’s opinion. Not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.