Is Your Dream Car a Hidden Expense? Here's How Car Models Impact Insurance Costs

The model of your car can greatly increase or decrease your four-wheeler insurance premium.

Most people think about price, mileage, or other features while buying a car. However, they often forget one important detail to consider—insurance. The model you choose can directly affect your policy cost. Insurers look at things like how expensive it is to repair the vehicle, how likely it is to be stolen, its safety features, and engine size when determining the premium. A car insurance calculator can help you get an idea of the premium you need to pay for your car model and avoid unexpected costs later.

Introduction

Most buyers compare price, mileage, and features when purchasing a new car. However, what they often overlook is the influence of the vehicle’s model on the car insurance premiums. Insurers assess every detail relating to your four-wheeler, such as repair costs, safety ratings, engine size, theft risk, etc, when determining the premium. Understanding this impact is very crucial when it comes to taking a financially sound car-buying decision.

Why Does the Model of Your Car Matter?

The model of your car can greatly increase or decrease your four-wheeler insurance premium. It usually depends on how it performs in real-world conditions. For example, cars that have high safety ratings and lower repair costs tend to have lower premiums. On the other hand, luxury or high-performance cars are more likely to be stolen and are usually costlier to insure. Some electric vehicles also carry higher premiums. This is due to the cost of battery replacement and specialised servicing requirements.

Key Features of a Car Model That Influence Insurance Premiums

Several technical and design-related factors associated with your car model can impact the cost of your insurance. It can often be more than buyers expect. Let us understand these factors better —

1. Repair & Maintenance Costs

The higher your car model’s repair costs, the more likely you are to pay a high amount for insurance. For instance,

• Luxury cars, such as BMWs or Mercedes, have expensive parts and labour. This leads to higher premiums.
• Affordable models, such as Toyota or Suzuki hatchbacks, are cheaper to maintain and cost less to insure.
• Aluminium panels, ADAS sensors, and imported parts require specialised repairs, increasing claim amounts. This leads to a high premium.
• EVs and hybrids often require more expensive repairs due to their batteries and complex technology, thus raising the insurance cost.

Even a small bump can end up costing a lot if it affects safety sensors, since recalibrating them is not cheap. Insurers usually take these potential repair costs into account when setting your premium.

2. Theft Susceptibility

Cars that are often the target of thieves are costly to insure because insurers consider them high-risk, increasing the likelihood of claims related to theft or damage. This added risk leads to higher premiums to offset potential losses.

Popular low-cost models are often stolen for parts. On the other hand, cars equipped with effective anti-theft features, such as immobilisers and trackers, may be eligible for lower insurance premiums since they are less likely to be stolen by thieves, reducing risk for the insurer.

3. Safety Ratings & Features

Cars that protect passengers better during mishaps and avoid collisions reduce an insurer’s financial exposure. Thus, the models with 5-star NCAP ratings often qualify for lower insurance premiums. Vehicles with Advanced Driver Assistance System (ADAS) features like blind-spot monitoring, lane change alerts, emergency braking, and rear cross-traffic sensors reduce the chances of collision. So, cars with these features are less expensive to insure.

4. Engine Size & Power

Cars with large engines are considered high-risk vehicles due to their potential speed, increasing the probability of accidents, and are also typically more expensive to repair.

• A 1.0L hatchback may cost less to insure than a 2.4L sedan, even if their prices are similar.
• Higher engine capacity often means a higher Insured Declared Value (IDV). This pushes premiums up.
• In India, insurers group cars into slabs like below 1000cc, 1000–1500cc, and above 1500cc. Smaller engines generally fall into lower-cost brackets.

Choosing a model with modest engine size can be a smart way to keep insurance costs manageable.

How Underwriters Evaluate Your Car?

Insurers use detailed data-driven models to determine how risky a vehicle is to insure. These models assess:

• How often are claims filed for a specific make and model?
• The average repair time and part cost after an accident.
• Loss-of-use payouts (i.e., how long it takes to return your car).
• Theft frequency and recovery rates in urban vs. rural areas.
• Safety test outcomes and historical data from the manufacturer.

This is why a car's insurance classification can change over time if thefts rise or if new test results emerge.

Real-World Comparisons: Cars with High vs Low Premiums

To understand how much your car choice can impact insurance, here is a quick look at real-world examples of vehicles that typically fall into high and low premium categories.

Car Category	Example for Models	Why is Premium High/Low
High Premium Cars	BMW M340i, AMG A35	High-performance engines, expensive repairs, and premium parts
	Toyota Fortuner (Diesel)	Body-on-frame SUV, high repair costs, larger claim risk
	Nexon EV, Renault Zoe	EV battery-related risks, complex repairs, and limited part availability
Low Premium Cars	Volkswagen Polo (2025)	5-star safety rating, good reliability, strong crash-test record
	Hyundai i10, Suzuki Celerio	Compact size, low-cost repairs, and low engine displacement
	Honda Amaze, Maruti Dzire	Affordable sedans, solid safety ratings, and lower claim frequency

What About Car Modifications?

Car modifications can lead to higher insurance premiums, especially when they involve performance upgrades or structural changes. The exact cost hike varies by insurer. However, the following types of modifications are commonly flagged as higher risk; thus, they lead to an increased premium:

• Turbo kits and ECU remapping are considered performance enhancements. However, they may also increase the likelihood of accidents.
• Custom bodywork or sunroofs can raise repair costs due to the need for specialised parts or labour.
• Suspension upgrades may affect handling and safety, leading to accidents.
• Uncertified DIY security installations can interfere with factory safety systems, reducing the collision protection of the car.

Always notify your insurer about any vehicle modifications, even if they are cosmetic. Failing to disclose them can result in claim denial or policy cancellation.

Conclusion

Car ownership goes beyond the thrill of the drive—it is a commitment that carries ongoing costs, and car insurance is a big one. While most buyers focus on price, mileage, or design, factors like your vehicle’s make, model, safety features, engine size, and theft risk can significantly impact what you pay year after year for the policy. You can use tools like the car insurance calculator to estimate premiums based on various factors, including your car features, before you buy a plan. It can save you thousands in the long run.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.