Exotic Car Insurance

Automobile manufacturers generally make cars in large numbers targeted at a mass audience. The cost of small cars can be in the twenty thousand dollar range on average and mid-sized cars can run up to $40,000. Most cars these days perform very well and fulfill their main job of being a mode of transportation. The next step up from these cars are luxury vehicles. This class of car uses higher-grade material and provides an overall upgraded riding experience. The average luxury car in the U.S. runs between $50 to $60 thousand. Exotic cars are in a whole other price class. Costing anywhere between $100 thousand and up to a million, Exotic cars are constructed of the highest quality materials and have very high-performance capabilities on the road. They are fast, responsive, and take turns easily. Exotics are, more often than not, two-seat sports cars (a Rolls Royce would be an obvious exception to this rule) and they are usually built in limited numbers. There is no set definition of an exotic car but here are the names of some manufacturers generally seen as exotics: Lamborghini, Ferrari, Maserati, and McLaren, among others. Most exotics are manufactured overseas and their foreign origin can be part of their cachet.

Most cars depreciate in value rather quickly. After a few years, they can easily b worth only half as much as their original sticker price. Even luxury cars depreciate in value, albeit at a slower rate than most other cars. Exotic cars not only hold their value well, they often times appreciate at price.

What Is Exotic Car Insurance?

Exotics are high priced, high quality, and high performance driving machines. As you would expect they cost a bit more to insure than your average vehicle. What’s more, not every insurance carrier will provide coverage for exotic vehicles. Their parts are super high quality, precision-made, and usually very hard to find. This makes them much more expensive to repair than the average car. And repairing an exotic is not within the realm of experience or ability of your everyday auto body shop. High-end vehicles need high-end talent to care for them and repair them. Very often you would need to seek out a specialty insurer who serves niche markets for auto and other types of insurance. If you are interested in obtaining an exotic car, talk to dealers to get advice on specialty insurers. See if there is a local club of aficionados in your location who can give you some inside information about insuring these types of supercars.

What’s Different About Exotic Car Insurance?

There are two main ways to look at how you use an exotic car. Some folks will purchase them mainly as showcase items and will drive them on the roadways only occasionally. Other folks will purchase them intending them to be their everyday vehicle. An insurance policy for a showcase exotic car may give a cheaper rate (relatively speaking, of course) as long as you drive it under a few thousand miles every year. An insurance policy for the everyday use of an exotic will cost more. Many insurance policies for exotics may stipulate that you must store your vehicle in a locked garage because the risk of theft is so much greater than for an average vehicle.

How Are Exotic Cars Valued?

First off, exotic vehicles follow the traditional laws of supply and demand. They are usually produced in small numbers made of the highest quality parts and many aspects of their manufacturing are done by hand, as opposed to robotic assembly. So, the sticker price will be high. When you are talking about insuring an exotic car there are commonly two ways to describe its value. One is called the stated value and the other is called the agreed value. The stated value is much like the sticker price less any depreciation value. As we have noted, exotic cars often appreciate in value. It is highly recommended that you have an appraiser evaluate your exotic car in order to come up with an agreed value price. This is the price you will want your insurance to cover in the event of a serious accident.

The Cost of Insurance Premiums

The cost of insuring an exotic car can vary greatly. Get your car appraised and carefully research the niche specialty insurers to find out who covers this particular market segment. But be prepared to pay thousands of dollars to insure your exotic vehicle.

How to Save Money on Exotic Car Insurance

If you intend your exotic to be a showcase car, abide by the mileage limitations set forth in your policy. Showcase cars have strict limits on annual mileage and if you go over it you may open yourself to big increases in costs and even avoiding your policy. These cars make tempting targets for thieves, so be aware that your insurer may require you to store your car in a garage.