Car Insurance Cheaper with More Expensive Car?

Shepard

Hello,

I am 23 Male and am about to get my full driving license and then would like to get a car.

However seems like in my area insurance is ridiculous £6000+ despite the fact that my apartments have secured locked compound parking.

I have been playing around with comparison websites and it appears the more expensive the car the cheaper the insurance. As an example if I got a 2005 1.0 Vauxhall Corsa and valued it at £2000 the insurance is £6000. However if I value it at £5000 its £1500? Even if I get a more powerful car and with a higher value it appears to come out the same. Also Fully Comp seems to be the cheapest type of insurance.

Is there any sense to this? Do people with newer more expensive cars drive better is that why? And isit ok if I overvalue my vehicle cost to get cheaper insurance? Since usually it appears people lie with the opposite to get cheaper insurance I also guess the valuation could be in my mind or I could of got robbed when buying my car...

Thanks for your help.

PollyOnAMission

It is often the case that small, low value, small engined cars have higher insurance premiums, due to them being so popular with young/inexperienced drivers. Because of this, these types of cars have a higher proportion of incidents and therefore a higher amount of risk.

It might be worth your while looking into a slightly larger car (e.g. Astra/Golf/Focus sized rather than Corsa). Not only might it be cheaper to insure, it may also be better value to buy as the small engined little cars carry an extra premium for being so popular.

As for fully comp being cheaper, this might be because third party only is also a popular choice for the higher risk drivers.

I would say it's a very bad idea to over value your vehicle cost to get the insurance cheaper. You really need to be 100% honest when it comes to insurance or you risk invalidation! Instead, why not widen try a variety of vehicles in the comparison sites and widen your search to cover more than the small engined hatchbacks

lisyloo

despite the fact that my apartments have secured locked compound parking.

Theft is only one component (and actually a relatively cheap one).
The other risks are 3rd party risks e.g. maiming someone else who requires millions of pounds worth of 24/7 care for the rest of their life.

and it appears the more expensive the car the cheaper the insurance

I agree it's counter intuitive, but a lot of "boy racer" types will have the cheaper cars and those people that drive expensive cars tend on the whole to take care of them.
Insurers work on claims experience and the results are often not intuitive, but it is the actually experience of pay outs that counts.

Also Fully Comp seems to be the cheapest type of insurance.

Again counter intuitive but there are move companies in the market so it's more competitive.
You may find fully comp with a big excess is cheapest.

Is there any sense to this? Do people with newer more expensive cars drive better is that why?

Yes it's based on actually claims experience.
Just anecdotally I see that people who have worked hard and earnt nice things tend to take care of them, but I agree that the claim experience is not always intuitive.

And isit ok if I overvalue my vehicle cost to get cheaper insurance?

You should not blatantly lie about the material facts. You could get into big trouble for this and potentially get a "black mark" forever.
However I would agree that there is certainly some scope for what people pay. Some people barter a really good bargain and others pay over the odds, so there is always some scope for the valuation of an individual car.
It's generally common to value at the high end to make sure you are not under-insured.

InsideInsurance

It is based on claims experience but if you want to try and do some logic then you need to remember that the biggest claims are made by third parties and in particular personal injury and so its the safety features that generally are better on newer/better cars that can reduce claims.

Likewise, newer/better cars also tend to have better security for theft claims (and subsequent hit and runs etc) plus newer cars typically have less Fire claims.

The other consideration is that there are so many different variables with non-normalised distributions that it is not possible for insurers to get purely clean data for each variable. So, if you find a car is heavily slanted towards young drivers you'll find it disproportionally loaded in premium irrespective of if you are a young driver or not.

Finally there is the commercial consideration, premiums are made up of three parts, a technical premium which covers the true risk, an operational element which covers the general cost of running an insurance company and a commercial element (aka profit). The last part in particular can be flexed depending on how desirable the customer is to the insurer and how much competition there is for them. As others have said, TPFT has lower competition and so insurers can charge more even though in theory the claims exposure is less given the lower coverage.