When thinking about buying a luxury vehicle, you need to consider more factors than sticker prices. Otherwise, you may quickly find that the perfect car you’ve narrowed your search down to might suddenly eat far more into your monthly expenses than planned.

With a new car — even if it’s only “new to you” — comparison shopping for auto insurance policies will help prevent a surprise increase on your bill.

To shorten your search, reviewing the cheapest luxury cars to insure will help provide a baseline for your expected policy costs. Browsing the most affordable coverage plans for luxury cars will also help bring any hidden deals out of your blindspot.

The “True Cost of Ownership” for Luxury Cars

Edmunds, which began as a newsstand automotive publication in the 1960s, breaks down any vehicle’s true cost of ownership after purchase into the following categories:

  • Depreciation

  • Taxes and fees

  • Financing

  • Fuel

  • Insurance

  • Repairs

  • Maintenance

When shopping for luxury cars, researching your total ownership costs will help better identify what options fall within your budget and where you might find screamin’ deals.

Used Luxury Cars

Many luxury cars suddenly seem far more affordable when browsing the used market. However, the lower sticker prices on used luxury vehicles belie their total cost of ownership. Most luxury cars come packed with the latest technology, features, and options available when they were first released. When some of these amenities begin to fail after years of use, the repair cost can skyrocket, turning what seemed to be the cheapest car into a much more expensive vehicle.

Lowest Insurance Rates for Luxury Cars, by 2020 & 2021 Models

The table below compares the estimated insurance costs and the true cost of ownership (TCO) over five years for entry-level and compact luxury models reviewed by Consumer Reports. Included in the parentheses is the average annual premium. Where possible, the least expensive combinations of trim, features, and options were chosen for the listed car model.

Model Year Insurance Cost, Over 5 Years (Per Year Avg.) TCO, Over 5 Years (Per Year Avg.) Insurance Cost as a Percentage of TCO, Over 5 Years
Acura ILX 2021 $7,476 ($1,495) $39,817 ($7,963) 18.8%
Audi A3 2020 $7,715 ($1,542) $48,158 ($9,631) 16.2%
BMW 2 Series Gran Coupe 2021 $9,186 ($1,837) $63,354 ($12,670) 14.5%
Mercedes-Benz CLA 2021 $8,000 ($1,600) $59,645 ($11,929) 13.4%
BMW 3 Series 2021 $8,066 ($1,613) $64,760 ($12,952) 12.5%
Infiniti Q50 2021 $7,513 ($1,502) $48,511 ($9,702) 15.5%
Lexus IS 2021 $8,333 ($1,666) $54,937 ($10,987) 15.2%
Mercedes-Benz C-Class 2021 $8,430 ($1,686) $63,482 ($12,696) 13.3%
Volkswagen Arteon 2021 $7,389 ($1,477) $49,021 ($9,804) 15.1%
Volvo S60 2021 $7,695 ($1,539) $62,091 ($12,418) 12.4%

*To best provide an upper boundary on these estimates for luxury models’ insurance premiums, all data is based on the wealthiest zip code in Detroit, MI: 48304. An aggregate of 2019’s car insurance premium data listed Detroit as the most expensive city in the U.S. for annual average coverage costs. Michigan also ranks as 2020’s most costly state in which to insure a vehicle.

**The data presented here was compiled using the Edmunds True Cost of Ownership tool.

Where to Begin with Luxury Car Insurance

Identifying the cheapest luxury car specifically for you to insure can be difficult. Providers determine a policyholder’s auto insurance rate according to numerous considerations—some under your control, some outside of it. The best way to determine premium costs beyond estimates is to comparison-shop policies online or call various providers directly. Learn more on cheapest trucks to insure and cheapest sports cars to insure so that you can evaluate your long-term expenses, and get the right car for you.

Factors influencing your car insurance rate include:

  • Your age – Insurance companies view younger drivers as more significant liabilities to insure—particularly for drivers under 25. While all coverage options remain available for young drivers, providers usually charge them higher premiums. They also have shorter driving and credit histories, whereas better records help lower policy costs.

  • Your driving history – A driving record indicating safe, responsible vehicle operation with minimal to no at-fault incidents means less risk to insurers and correspondingly lower premiums. Accumulating at-fault accidents and on-road violations not only increases your coverage costs but potentially limits your policy options.

  • The vehicle you’re insuring (e.g., its value, age, safety features) – Different vehicles carry different premiums for the same driver. Newer vehicles may come with additional safety features that can help lower your rate. On the other hand, newer models hold greater value; a more expensive vehicle, such as a luxury car, will require more expensive parts. As a result, vehicles with high repair or replacement costs lead to high premiums.

  • Your insurance history – If your insurance coverage has lapsed for any time in recent years, providers will consider you a greater liability. The best option for most drivers with lapsed coverage remains policy reinstatement with their previous insurer. Whether or not they agree, gaps in your insurance history lead to higher rates.

  • Additional insurance coverage options you may choose – Nearly every state requires drivers to carry insurance for a minimum amount of liability in case of an at-fault accident. Additional insurance coverage can provide more protection for your vehicle, yourself, and any passengers at the cost of higher premiums.

  • Your state of residence (and their insurance requirements) – Because each state sets its minimum liability requirements for drivers, the amount insurers pay out for similar claims varies across the U.S. In the states where insurers must meet higher minimum liability requirements, premiums increase to minimize potential losses. Your state’s percentage of uninsured drivers and frequency of natural disasters affect your rates too.

  • Available discounts – Insurance companies offer all types of discounts to their policyholders. Safe driving records, being a homeowner, additional courses, and even good grades can help you reduce your annual cost.

While you may not have any control over some of the factors influencing your auto insurance premiums, contact your provider and ask what discounts might be available to you. If you don’t have a current insurance provider — or want to see if another company offers better rates—comparison shopping for policies will help you find the most savings.

Most Reliable Luxury Cars for 2021

A luxury car's reliability will affect your expenditures on maintenance, parts, and insurance rate as with any other vehicle. When your automobile remains in proper working order, you minimize the likelihood of breakdowns or systems and parts failures that may lead to accidents (e.g., loss of control, “spongy” brakes).

U.S. News & World Report’s list for the most reliable 2021 luxury cars features:

  • 2020 Kia K900

  • 2020 Toyota Supra

  • 2019 Porsche Cayman

  • 2020 Porsche 911

  • 2019 Porsche Boxster

  • 2019 Mercedes-Benz CLA

  • 2019 Buick Cascada

  • 2020 Lexus RC

  • 2020 Lexus IS

  • 2020 Lexus ES

  • 2020 Lexus GS

  • 2020 Lexus ES Hybrid

  • 2020 Lexus LS

  • 2020 Lexus LC

  • 2020 BMW 5 Series

The Mercedes-Benz CLA and the Lexus IS make both the Consumer Reports' reviews and the U.S. News & World Report's reliability list.

Do You Need Auto Insurance?

Before you begin questioning whether you can save by skipping auto insurance altogether, remember that active coverage is legally required for all U.S. drivers. New Hampshire remains the only state without a mandate that drivers must hold an auto insurance policy. However, “The Granite State” does require proof of sufficient financial responsibility in the absence of dedicated coverage (e.g., liquid assets, a home, other collateral).

High-Risk & State Risk Pool Insurance

If you are concerned about finding an auto insurance policy because of your previous driving history, rest assured that options exist. If standard insurance providers have determined that you present too high of a risk, they may not offer coverage options.

Some standard providers, as well as “high-risk insurers,” offer specific coverage for such instances. Geico does insure high-risk drivers and those required to carry an SR-22 form. Providers such as The General specialize in covering high-risk policyholders.

SR-22 & F-44 Forms

Some drivers may be required by law or court order to file and carry SR-22 or FR-44 forms. These forms offer proof that the driver holds an active auto insurance policy that meets their state’s minimum liability requirements. Filing an SR-22 or FR-44 form merely proves that you have auto insurance; it is not its own type of policy.

Drivers with the following incidents on their record may be required to file and carry an SR-22 or FR-44 form:

  • DUI conviction(s)

  • Reckless driving

  • Have caused an accident while uninsured

State Risk Pools

Even if drivers struggle to find high-risk options, they can turn to their state's public market. In some states, standard insurance providers must provide coverage plans for the public market.

Comparison Shopping for Luxury Auto Insurance

The number of factors contributing to an individual driver's auto insurance premiums varies widely around the U.S.—even between drivers who live in the same area or drive the same vehicle. Determining the best rates for a luxury vehicle by yourself requires hours of information gathering between numerous policy providers.

Thankfully, OnlineAutoInsurance provides drivers with an easy-to-use comparison shopping tool to quickly collect and browse policy options along with their listed premiums. All you need is your zip code and to answer a few short questions regarding your driving history and basic information about your vehicle.

With our comparison tools, you can readily insure your luxury vehicle and hit the road in style.

Sources:

AP News. Top 10 States with the Most Expensive Car Insurance Premiums. https://apnews.com/press-release/accesswire/business-transportation-personal-insurance-auto-insurance-insurance-industry-2e9e1fb7175587c65a1790869703f889

Autotrader. Buying a Used Car: Why are Some Used Luxury Cars so Cheap to Buy. https://www.autotrader.com/car-shopping/buying-used-car-why-are-some-used-luxury-cars-so-cheap-buy-241017

Car and Driver. Finding the Cheapest Car Insurance for Under 25 Drivers. https://www.caranddriver.com/car-insurance/a36051774/cheapest-car-insurance-for-under-25/

Consumer Reports. Best Luxury Car Ratings. https://www.consumerreports.org/cars/types/new/luxury-cars/ratings?categoryId=11365

Edmunds. Cost of Car Ownership. \ https://www.edmunds.com/tco.html

Geico. SR-22 Vehicle Insurance. \ https://www.geico.com/information/sr22-details/

The General. High Risk Auto Insurance. \ https://www.thegeneral.com/car-insurance/basics/high-risk/

Money Talks News. 10 Cities Where Car Insurance is Most Costly in 2019. https://www.moneytalksnews.com/cities-where-car-insurance-is-most-expensive/

Statista. Estimated Annual Car Insurance Premiums in the United States in 2020, by State. https://www.statista.com/statistics/675367/annual-auto-insurance-premiums-usa-by-state/

U.S. News & World Report. 15 Most Reliable Luxury Cars for 2021. https://cars.usnews.com/cars-trucks/most-reliable-luxury-cars

ZipDataMaps. Map of Wealthiest Zip Codes in Metro Detroit Based on Average Adjusted Gross Income. \ https://www.zipdatamaps.com/economics/income/agi/metro/wealthiest-zipcodes-in-metro-detroit