The Impact of the Horsepower of Your Car on Insurance Rates in Germany

As a licensed car insurance agent in Germany with over 10 years of experience and a driver with two decades behind the wheel, I’ve had countless discussions with clients about what truly influences their car insurance premiums. One of the most overlooked yet critical factors when choosing an insurance policy is the horsepower (PS, or Pferdestärke, as we say in Germany) of your car.

Many drivers assume it’s all about their driving record, age, or location. While those do matter, horsepower has a significant effect on how much you’ll pay for coverage. In this article, I’ll break down how it all works, what it means for your wallet, and what kind of vehicles are cheaper—or more expensive—to insure.

What Role Does Horsepower Play in Car Insurance Rates in Germany?

Let’s start with the basics: In Germany, car insurance premiums are based on several key factors:

• Vehicle type and model
• Engine size and horsepower
• Driver profile (age, driving experience, accident history)
• Postcode
• No-claims bonus (SF-Klasse)

Higher horsepower often correlates with more expensive insurance premiums. Why? More powerful engines are statistically involved in more severe accidents and are often driven more aggressively. They also tend to be more expensive to repair or replace.

Example:

If you’re insuring a 150 PS (horsepower) VW Golf, your premium will be considerably lower than for a 300 PS BMW M3.

Insurance Quote Comparison: High-Powered Cars in Germany

Here’s an illustrative table comparing annual comprehensive insurance quotes for different high-powered vehicles (based on a 25-year-old driver with 3 years of claim-free driving):

As you can see, the more powerful the engine, the higher the premium. This is particularly true when the car falls into the luxury or high-performance category.

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What Types of Cars Are Most Expensive to Insure?

Insurance companies in Germany classify cars into vehicle types/classes. The type class is updated annually based on damage statistics.

Cars that fall into the expensive-to-insure category usually include:

• Sports cars and performance models: Porsche, AMG, M-Series
• Luxury vehicles: BMW 7 Series, Audi A8, Mercedes S-Class
• SUVs with large engines: Range Rover, BMW X5 M, Audi SQ7
• Modified or tuned vehicles

Not only do these cars have more horsepower, but parts and repairs also cost more. These cars are more likely to be stolen or involved in high-speed accidents.

The Cheapest Cars to Insure in Germany

On the flip side, some cars are known for their affordability when it comes to insurance. They typically have lower horsepower, are cheaper to repair, and statistically cause less damage in accidents.

Examples of low-cost-insurance cars:

How the Car Insurance Market in Germany Has Changed in the Last 5 Years

The car insurance industry in Germany has seen major shifts recently:

1. Digital Insurers on the Rise
   Companies like HUK24 and Getsafe offer fully digital policies, leading to competitive pricing and user-friendly service.
2. Dynamic Pricing Models
   Usage-based insurance (UBI) and telematics (like ADAC’s Smart Driver) are influencing how premiums are calculated, especially for younger or low-mileage drivers.
3. More Personalization
   Insurers now allow more customization with add-ons like legal protection, breakdown cover, and glass coverage.
4. Stricter Claims Scrutiny
   Insurers have tightened their claim validation processes, especially for high-risk and high-horsepower vehicles.

How to Switch Car Insurance Providers in Germany

Switching your provider is easier than most people think. The main rule is:

You Can Cancel Your Policy:

• Annually (usually by November 30)
• After a claim
• If the insurer increases your premium
• If you sell or de-register your car

Steps to Switch Car Insurance Providers in Germany

Switching car insurance in Germany is straightforward if you know the process. Whether you’re looking for better rates, improved service, or more flexible coverage, here’s how to make the switch:

1. Compare Car Insurance Quotes:

Start by using comparison platforms like Check24, Verivox, or Nafi-Auto. Enter your vehicle’s registration, driver profile, and desired coverage. These tools give you real-time quotes from dozens of insurers.

2. Choose a New Provider:

Look beyond just the price. Consider factors such as customer service, digital claim options, and whether the policy includes extras like roadside assistance or legal protection (Rechtsschutz).

3. Cancel Your Current Policy:

German car insurance contracts typically run for a calendar year. To cancel, send a written notice by November 30 for the following year. In some cases, like after a claim or a price increase, you can terminate mid-year.

4. Get a New eVB Number:

The new insurer will provide an electronic insurance confirmation number (elektronische Versicherungsbestätigung). This is required to update your registration.

5. Inform the Zulassungsstelle:

If you change insurers during a car registration or re-registration, notify the vehicle registration office (Zulassungsstelle) with your new eVB number.

Switching can save hundreds of euros, especially for young or low-risk drivers.

Why Some People Stop Using Their Insurance Providers

There are a few common reasons why drivers in Germany jump ship:

• Unjustified premium increases
• Bad customer service
• Complicated claims processes
• Lack of English support for expats
• Few digital services or outdated platforms

For example, a client of mine switched from a traditional insurer to a newer, fully-digital provider because her old one didn’t support app-based claims reporting. She saved €300 a year in the process.

Additional Factors That Affect Car Insurance Rates in Germany (Beyond Horsepower)

While horsepower is a key driver of insurance costs, several other variables significantly influence your premium in Germany. Insurers use these to assess risk and determine your individual rate.

1. Driver’s Age and Experience:

Young drivers or those with a new license (especially under 25) are statistically more likely to file claims. As a result, they pay higher premiums.

2. No-Claims Bonus (SF-Klasse):

The longer you drive without making a claim, the more discounts you earn. A driver with 5–10 years of claim-free driving (SF5 to SF10) can receive 30% to 60% off.

3. Annual Mileage:

Driving less often reduces your exposure to risk. Most insurers offer discounts to drivers who stay below 9,000–12,000 km per year.

4. Parking Location:

Garaging your vehicle reduces the risk of theft or damage. Street parking in busy urban areas often leads to higher premiums.

5. Car Usage Type:

Is your car for private or commercial use? Business use can result in higher premiums due to increased time on the road.

6. Region (Postleitzahl):

Insurance risk differs by region. Urban areas like Berlin or Hamburg have more traffic and accidents, pushing rates higher than rural zones.

Together, these factors often make more difference than horsepower alone.

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Final Thoughts: What You Should Do

If you’re considering buying a car or changing your insurance, don’t ignore the horsepower. Sure, a 400 PS engine is thrilling—but it could cost you €3,000 a year in insurance alone.

Instead:

• Choose a car with moderate horsepower to reduce your insurance rates in Germany.
• Compare insurance quotes before buying.
• Ask your insurer if your car model has a high Typklasse.
• Opt for additional safety features; some insurers offer discounts for this.

And if you ever feel your current provider is overcharging or not giving you the service you deserve, don’t hesitate to switch.