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How Advanced Vehicle Technology Impacts Your Car Insurance Rates

WRITTEN BY: Julia Matseikovich

UPDATED: MAY 24, 2022 | 2 MIN READ

Lots of newer cars manufactured come with fancy technology, either as standard or an optional add on. While most of them are designed to make you safer on the road, does this added safety translate into lower car insurance rates? 

Advanced Car Technology Quicklinks

Does New Car Technology Lower or Increase My Car Insurance Rates?

Most studies show that cars with advanced safety systems do make things safer. One study by the Insurance Institute for Highway Safety looked at crashes involving cars with blind spot monitoring. It found that the cars with this tech were 14% less likely to be involved in a crash than those without it. 

It estimated that if every U.S. vehicle in 2015 were equipped with blind spot monitoring, approximately 50,000 crashes and almost 16,000 injuries may have been prevented.

When Does Advanced Vehicle Technology Lower My Car Insurance Rates?

Insurance premium calculations look at the risk of the insurers having to pay out on a claim. If advanced safety systems lower a person’s risk of getting into a car accident, it follows that cars with that tech must be cheaper to insure, right?

Unfortunately, while these systems are still new, it seems that any savings you may make from being able to drive more safely will be offset by the cost of the technology. 

This is likely not to be permanent though. As technology becomes older, it typically becomes cheaper and more accessible. Insurers base their rates on historical data, and as there isn’t much of that relating to advanced vehicle tech yet, they may just need some time to catch up.

When Does Advanced Vehicle Technology Raise My Rates?

Any time advanced safety systems involve making a car part more complicated, it’s likely to raise the cost to insure the car. While you’re likely to drive safer, if anything does go wrong, it’s going to cost your insurance company more money than if you had a standard vehicle.

What about GPS?

Some insurance companies offer a discount to people who have a GPS tracking device installed in their car. Being able to locate your vehicle if it’s stolen means they won’t have to replace the entire thing – anything that can potentially save insurers money is likely to save you money too.

3 Car Technologies That Change the Way You Drive

While tech like GPS makes your car easier to find if it’s stolen, others actually change the way you drive.

Adaptive cruise control

This can reduce stress for drivers on long distance drives by allowing them to focus on other aspects of driving. Where cruise control keeps your car moving at a set speed, adaptive cruise control keeps the car a set distance behind the car in front. It slows down when the car in front slows down and speeds back up when the car in front accelerates.

Rearview cameras

These reduce blind spots when you’re reversing, making it easier for you to park or just maneuver. For some people, these cameras can prevent them getting into accidents but allow them to see in real time exactly how much space they have around them.

Built in sat-nav systems

Gone are the days of fumbling with a map or peering at your phone to check directions. Nowadays, a lot of cars have inbuilt satellite navigation systems. 

New Car Technology That Could Increase Your Car Insurance

With newer tech comes more expense. The are more expensive cars are to buy in the first place, the more your insurance company would have to pay more to replace it if you made a claim. 

The newer systems themselves may also cost more to replace or repair. They may have parts that have to be imported, or that can only be replaced by certain experts. 

Adaptive headlights

Curve-adaptive headlights help improve visibility on curvy roads by moving in the direction of travel. They typically have LED or high-intensity discharge (HID) lamps. Where old fashioned headlights may have cost around two hundred bucks to replace, these newer ones could set you back a couple of thousand.

Blind spot monitoring

This technology uses cameras, radar, or even ultrasonic sensors to let you know when there’s something in your blind spot. If there is something in the blind spot and you use your turn signal ready to change lanes, your car will let you know it’s dangerous.

This tech can be found in the side mirrors and the rear bumper. If either of those need replacing, it becomes a lot more expensive. This is likely to be reflected in your car insurance premium.

FAQs About Vehicle Tech and Car Insurance Rates

What car safety features lower my car insurance rates?

Various safety features can lower the car insurance rates you’re offered. These include collision warning, anti-theft devices, rearview cameras, and parking sensors. 

Are cars with more safety features cheaper to insure?

Unfortunately, these features increase the cost of the car, as well as the cost to carry out repairs should the car be involved in an accident. While they make driving safer, the increased costs counteract any savings you may make.

Do newer cars have higher car insurance rates?

Often, yes. In most cases, new cars typically kitted out with the latest tech, and that can be pricey to replace or repair. They also usually cost more to buy, and the car’s value is considered when insurers offer you a rate.

Are insurance rates higher on electric vehicles?

Most of the time, yes. They typically cost more to buy, and therefore cost more to replace or repair. As they become more affordable, the insurance rates should decrease a bit.

Is it cheaper to insure a new or used car?

Typically, cars that are 5 years old are cheaper to insure than newer cars. That’s because new cars are usually worth more so would cost more to replace. Also, older cars might be valued at low enough that you choose to just get liability insurance, saving money that way.

The Bottom Line on Vehicle Technology and Car Insurance Rates

Advanced vehicle technology could decrease your insurance premiums, but most likely, because of the repair and replacement costs, it will increase your car insurance rates. In some cases the effects may balance each other out and leave you no better or worse off. Overall though, they have been proven to make the roads safer, which is definitely important. Comparing premiums from various insurers gets you the best car insurance rates possible.

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