Insurance for Luxury Cars
Luxury cars and high-value cars need specific car insurance compared to a basic car. Luxury car insurance is specifically designed to protect high-end vehicles.
Insurance for exotic cars costs more because these high-value luxury cars need more coverage to protect them, but with some planning you should be able to save on your luxury car insurance.
Western Financial Group, a 100% Canadian company, can help you navigate your car, home, boat, and business insurance during this period of economic uncertainty.
What is a luxury car?
Typically, a luxury car is defined by:
- Prestigious brand or model reputation
- Superior comfort and high-end materials
- Advanced technology and safety features
- Higher cost
- Higher horsepower and smooth performance
- Higher speeds
- Distinct design
What are the major luxury car brands?
The following brands are considered luxury car brands: Ferrari, Lamborghini, Bentley, Aston Martin, Maserati, Bugatti, Porsche, and Rolls Royce.
These brands can also fall into the luxury category: BMW, Mercedes-Benz, Audi, Lexus, and Tesla.
What are entry-level luxury cars?
Mercedes-Benz C-Class, BMW 2 Series, Audi A3, Cadillac CT4, Acura Integra
What is luxury car insurance?
Luxury car insurance is a specialized type of car insurance that provides coverage for the unique risks and higher prices that come with owning an exotic vehicle. It’s different from standard car insurance because it offers increased protection, higher coverage limits, and customized options to safeguard the high value of these vehicles.
How can I save on exotic car insurance?
Car insurance for a luxury vehicle is going to cost you more, but you can save on your policy.
Here’s how you can save money on your luxury vehicle auto insurance:
- Pay your policy in full rather than monthly payments
- Increase your deductibles
- Shop around for multiple insurance quotes for your high-end car
- Keep customization of your luxury vehicle to a minimum
- Keep your yearly mileage low
- Keep your driving record clean
- Add vehicle safety features
- Add vehicle anti-theft devices (real-time tracking device) because thieves target high-value cars
Let Western Financial Group protect and personalize insurance for your luxury car. Western is an insurance broker that can help you find quotes from insurance companies that offer specialized coverage for exotic and luxury cars. We can help you save on insurance for your high-value vehicle.
What are some specifics of luxury car insurance coverage?
Luxury car insurance typically can have the following policy options available:
- Higher policy limits
- Agreed upon settlement value if the car is a write-off
- Repairs with original equipment manufacturer parts
- Mechanic and body shop preference for repairs
- More extensive loss of use and rental car coverages
- A limited waiver of depreciation to make sure the luxury car is replaced with a current make/model.
- Limit the number of drivers on your luxury car insurance policy
Why are higher limits needed to protect your high-value car?
Third-party liability coverage covers bodily injury and property damage to others if you are at fault in an accident. It’s mandatory in Canada, but higher coverage limits are strongly recommended for luxury vehicles due to their value. Insurance providers strongly recommend carrying at least $1 million, and often $2 million or more, in liability coverage, especially for luxury vehicles.
Higher limits are also recommended for comprehensive insurance, tailored to the needs and value of an exotic car.
Comprehensive coverage typically includes:
- Theft
- Vandalism
- Fire
- Weather events
- Falling objects like branches or trees.
- Animal damage
Higher limits are also common for collision insurance for high-value vehicles because they have more expensive repair costs due to specialized parts and technology.
Comprehensive and collision coverage are not legally required for luxury cars in Canada. Note that if you are leasing or financing your luxury vehicle, the lender or leasing company will likely require you to have both comprehensive and collision coverage until the car is fully paid off.
Higher limits for accident benefits coverage are often recommended for luxury vehicles due to their higher value and the potential for higher repair costs and medical expenses associated with accidents involving them.
Direct Compensation for Property Damage (DCPD) coverage is generally recommended for luxury vehicles in Canada because it simplifies the claims process and can be more cost-effective than relying solely on collision coverage for repairs when the driver is not at fault. It doesn't cover damages when a driver is at fault, but it streamlines the process for non-fault accidents by allowing the policyholder to deal with their own insurer.
Note that some luxury car insurance policies offer agreed value coverage, which means the insurer and owner agree on the car’s value, ensuring full compensation without depreciation deductions in case of a total loss.
How much does luxury car insurance cost?
The annual cost of insuring a luxury car can typically range from about $2,100 to $3,500 for mainstream luxury brands such as Lexus, Audi, BMW, and Mercedes-Benz. The cost is also going to depend on your location, luxury car brand, age, driving record, and past claims.
Premiums for exotic brands such as Maserati, Aston Martin, or Bentley can be $5,500 to $6,600 per year or more.
Does a luxury car hold its value?
That depends on the brand. Some luxury cars lose as much as 50% of their original value within the first five years. Brands like Lexus, Audi, and Bentley tend to retain more of their value compared to other luxury brands with solid resale values.
Factors like the rising cost of parts and specialized maintenance can contribute to higher depreciation, especially as high-value vehicles age and warranty coverage expires.
To sum it all up
When you buy a luxury car, you’ll need tailored insurance that protects its high value. You can expect to pay more for car insurance and have higher policy limits, but by doing your homework you should be able to find insurance savings for your luxury car.
5 FAQs
Which luxury cars have the slowest depreciation rates in 2025?
Luxury cars with the slowest depreciation rates in 2025 are: Porsche 718 Cayman GT4 RS, Porsche 911, Lamborghini Urus, Mercedes-Benz G-Class, and the Porsche 718 Boxster.
Why is insurance for luxury cars more expensive than for standard vehicles?
Luxury vehicles have a higher market value and the potential payout for the insurer in the event of a total loss is significantly higher. These cars also have expensive parts, advanced technology, and an increased risk of theft.
What role do repair costs play in the higher insurance rates for luxury vehicles?
Luxury cars often require exclusive or specialized parts that are not always readily available, making repairs more costly and time-consuming. Repairs on luxury vehicles can require technicians with specialized training and tools, which raises labor costs compared to standard vehicles.
How do higher theft rates of high-value cars raise insurance premiums?
Higher theft rates of luxury cars contribute to higher insurance premiums because insurers view these vehicles as higher risk for claims, particularly under comprehensive coverage, which protects these vehicles against theft.
Is it possible to save on luxury car insurance?
Yes, shop around and compare insurance quotes with the help of an insurance broker. Increase your deductible, install an anti-theft device, keep a clean driving record, limit your yearly mileage, bundle your car insurance with your home insurance, and review and adjust your coverage yearly.
